ALEX BRUMMER: This two-tier trade deal is a shameful missed opportunity and a blunder of the first order

Daily Mail​

06-05-2025

Free trade deals are meant to provide a boon to consumers, enrich the economy – and be fair to both sides.
Keir Starmer 's landmark accord with Indian strongman Narendra Modi is none of the above, at least when it comes to the British people.
At the very moment our economy buckles under the weight of Labour's swingeing increase to employers' National Insurance contributions, the PM has agreed that many Indian workers will be welcomed with open arms into Britain, free from the obligation to pay employment taxes for three years.
Predictably, the move has provoked outrage. As senior Tory Robert Jenrick put it: 'Starmer has hiked National Insurance on Brits while giving an exemption to Indian migrants. British workers come last in Starmer's Britain.'
With their expertise in technology and accounting, their fluency in English and their undeniable work ethic, Indian immigrants have long made a valuable contribution in this country.
But exempting them from paying National Insurance, even temporarily, is unconscionable after Rachel Reeves squeezed an extra £40 billion from British taxpayers – killing consumer and business confidence and bringing the economy screeching to a standstill.
Of course, greater access to India, one of the world's largest and fastest-growing markets, is useful for the Government after Donald Trump's tariff war wreaked havoc on the global economy.
Keir Starmer and Rachel Reeves have, since the US President's so-called 'Liberation Day' on April 2, repeatedly promised a trade deal with the US. Yet despite Reeves holding talks with US Treasury Secretary Scott Bessent, nothing has materialised. (Cruelly, the Americans look closer to forging their own trade deal with India than they do with the UK.)
After three years of negotiations, the Government has boasted that the new
deal with India will eventually be worth £4.8 billion in extra trade to Britain over ten years. That is frankly pitiful from an economy the size of India – one to which Britain already has centuries-old ties. Tory leader Kemi Badenoch, a former business secretary, has declared she would never have signed the new agreement.
Why? Because, in her view, it breached three red lines.
It allows for tax rebates to Indian residents in the UK not available to people already in the country; it allows too many visas for Indian incomers; and it penalises British industries that are already under pressure, from aluminium to ceramics. Yes, it is
welcome that barriers against UK car exports, whisky and other goods sold into India will fall. Similarly, levies charged on India's exports of shoes and clothing to Britain will be cut, lowering prices in shops here.
But the focus of this trade deal is on physical trade.
The cornerstone of the British economy is services – financial, legal, and business. And these appear to have been given short shrift. The Law Society claimed that the deal's failure to include legal services, a powerhouse of what economists call our 'invisible exports', was a shameful missed opportunity.
Also anxious are British farmers. The Business Department has claimed that the new deal will 'lock in' reductions in agricultural goods, but experts fear that Indian farming practices, including the use of pesticides banned in Britain, will undermine this country's high food standards and pose health risks to customers. It seems extraordinary that Britain should be lowering the barriers to Indian farm products while holding firm against allowing 'chlorinated chicken' and hormone-enhanced beef from the United States.
Starmer's critics – Tesla billionaire Elon Musk among them – like to call him 'two-tier Keir' given his apparent fondness for the unequal treatment of different groups in Britain.
To me, Labour's decision to offer Indian employees a break on National Insurance is only the latest and most brazen example of this unedifying nickname.
It is also explosive in the current political climate, for obvious reasons.
Overall, this deal is a blunder of the first order – and Starmer may yet pay a serious price for it.