Critics slam the new UK-India trade deal, expressing concerns that it may undercut British workers. A key component of the free trade agreement is the extension of an exemption on national insurance contributions (Nics) from one to three years. This arrangement, known as the double contribution convention, allows individuals on short-term visas to avoid making social security payments in both the country they work in and their home country while working abroad.
Various opposition parties, including the Conservatives, Liberal Democrats, and Reform, have raised objections, suggesting that this provision could potentially make Indian workers more affordable to hire compared to British workers. This concern is amplified following the recent increase in UK employer Nics. The Indian government has lauded the exemption as a significant victory that will enhance the competitiveness of Indian service providers in the UK.
Business Secretary Jonathan Reynolds defended the trade deal, emphasizing that the exemption primarily applies to inter-company transfers of professionals between the UK and India. He highlighted that the arrangement is limited in scope and that individuals would still be subject to income tax, the NHS immigration surcharge, and ineligible for benefits from the National Insurance system. Despite criticisms from Conservative leader Kemi Badenoch regarding potential costs to the UK Treasury, Reynolds expressed confidence that the double contribution convention would yield a net positive outcome for the country.
Opposition leaders have voiced their concerns, with Liberal Democrat deputy leader Daisy Cooper labeling the National Insurance plans as “half-baked” and potentially harmful to UK businesses’ competitiveness, especially amidst global trade uncertainties. Nigel Farage of Reform UK criticized the deal as “truly appalling,” accusing the government of neglecting the interests of working people. In response, a Labour Party spokesperson clarified that Indian nationals seeking employment in the UK would not benefit from the convention, ensuring that the tax break does not disadvantage UK workers. The spokesperson also asserted that the trade deal would bring significant economic benefits to British businesses and individuals
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