Business secretary says critics of UK-India trade deal ‘confused' and ‘British workers are not being undercut'

The Guardian

07-05-2025

Good morning. Yesterday the government was able to announce some good news – a major trade deal with India.
There is cross-party consensus that trade deals are a good thing, the last Conservative government was working on a trade deal with India too, and at least some Tories were happy to welcome the deal. Oliver Dowden, the former deputy PM, posted this on social media.
Welcome progress with conclusion of UK-India FTA. I remember firsthand Jonathan Reynolds's commitment to the relationship from our cross-party delegation to India!
Builds on significant progress made by previous Conservative government.
Free trade is a win-win for both nations
And Jacob Rees-Mogg, the former business secretary who is on the opposite wing of the party to Dowden, posted this.
Cheaper food and drink including rice and tea, footwear and clothing thanks to a welcome trade deal with India. Exactly what Brexit promised.
But Dowden and Rees-Mogg did not get the memo about the official opposition line. As reported on the blog yesterday afternoon, Kemi Badenoch decided to attack the deal on the grounds that it includes a double contribution convention, which means that Indian workers temporarily living in the UK will not have to pay national insurance contributions for three years – with British workers in India benefiting in the same way. Crucially, Badenoch found an effective means of putting a negative spin on this relatively niche feature of the deal – she described it as 'two-tier' taxation, involving 'tax refunds for Indians not available to us'. Nigel Farage, the Reform UK leader, was quickly making the same argument too, claiming the government was making it 20% cheaper to employ an Indian worker than a British worker. In a video he said the deal was 'appalling', and claimed it showed Labour had 'in a big, big way betrayed working Britain'.
Badenoch has certainly been successful at landing her message with the rightwing papers. Here are some of today's front pages. Telegraph splash Photograph: Telegraph Mail splash Photograph: Daily Mail Times splash Photograph: The Times
Jonathan Reynolds, the business secretary, has been giving interviews this morning. His main task was to counter the Tory/Reform UK claims and he insisted that this was a routine feature of trade deals, applying to just a sub-category of workers (employees from firms with operations in both the UK and India, seconded temporarily from one country to another), and the British workers were not being undercut. The Tories and Reform UK were 'confused', he said.
He told the Today programme:
There is no situation where I would ever tolerate British workers being undercut through any trade agreement we would sign. That is not part of this deal.
What the Conservatives are confused about, and Reform as well, is a situation where a business in India seconds someone for a short period of time to the UK, or a UK business seconds a worker to India for a short period of time, where you don't pay in simultaneously now to both social security systems …
This is exactly the sort of deal we have with 50 countries already, with the US, Canada, Japan, South Korea, New Zealand.
The Conservatives recently, well a few years ago when they were in government, signed one with Chile for five years. So no, British workers are not being undercut.
Asked whether the agreement meant Indian workers paying less tax than British counterparts doing the same job, Reynolds told the programme: 'No.'
In an interview with Sky News, Reynolds said that the trade deal would generate more than £1bn in extra tax revenues for the Treasury. He said the double contribution convention would cost 'less than a tenth of that'.
Here is the agenda for the day.
8.30am: Rhun ap Iorwerth, the Plaid Cymru leader, gives a speech in Cardiff marking one year to go until the next Senedd elections.
9.45am: Pat McFadden, the Cabinet Office minister, gives a speech to the CyberUK conference in Manchester.
10.30am: John Swinney, Scotland's first minister, gives a speech in Edinburgh on SNP strategy running into next year's Holyrood elections. Anas Sarwar, the Scottish Labour leader, is also giving a speech this morning, at 10.45am, as is the Scottish Consevative leader, Russel Findley, at 12.30pm.
10.55am: Lindsay Hoyle, the Speaker, attends a 'Turning of the Page Ceremony' in the Commons, with the book of remembrance naming MPs killed in both world wars, as part of the VE Day 80th anniversary celebrations.
Noon: Keir Starmer faces Kemi Badenoch at PMQs.
Lunchtime: Rachel Reeves, the chancellor is visiting a Scotch whisky distillery near Edinburgh to promote the UK-India trade deal (which cuts tariffs on whisky exports to India).
2.30pm: Nick Thomas-Symonds, the Cabinet Office minister, gives evidence to an infected blood inquiry hearing about compensation payment arrangements.
If you want to contact me, please post a message below the line when comments are open (normally between 10am and 3pm at the moment), or message me on social media. I can't read all the messages BTL, but if you put 'Andrew' in a message aimed at me, I am more likely to see it because I search for posts containing that word.
If you want to flag something up urgently, it is best to use social media. You can reach me on Bluesky at @andrewsparrowgdn.bsky.social. The Guardian has given up posting from its official accounts on X but individual Guardian journalists are there, I still have my account, and if you message me there at @AndrewSparrow, I will see it and respond if necessary.
I find it very helpful when readers point out mistakes, even minor typos. No error is too small to correct. And I find your questions very interesting too. I can't promise to reply to them all, but I will try to reply to as many as I can, either BTL or sometimes in the blog. Share