The right’s attack on the India trade deal is opportunistic, envious fakery

The India-UK trade agreement is a good deal that will promote growth by a small amount – every little helps – but it is being attacked by the Conservatives, Reform and the right-wing press in a welter of hypocritical opportunism.

The deal’s critics know perfectly well that it contains a sensible tax measure that will not increase the number of visas issued to Indians, but they have seized on the chance to put “national insurance contributions” and “cut” in the same sentence to pretend that this is favourable tax treatment for immigrants.

It is no such thing. The deal includes a clause that will extend protection from being taxed twice for Indian workers temporarily posted to the UK and for British workers temporarily posted to India.

These arrangements to prevent “double taxation” are standard and already exist between Britain and many other countries. Indeed, one already exists between Britain and India, but it allows only one year of protection; that will now be increased to three years.

It means that Indian workers on short-term contracts who are posted to the UK and who continue to pay social security contributions in India will be exempt from paying national insurance contributions here for up to three years. And vice versa.

It does not mean that more Indian workers will come to Britain because the visa regime is unchanged. It does not mean that Indians will be treated more favourably than British workers because they will still be paying the equivalent of national insurance contributions at home.

It is a good deal for the taxpayer because it will make the UK more attractive to highly paid Indians who will pay more tax here as a result.

Kemi Badenoch knows all this because she was trade secretary 10 months ago, leading the British negotiations on the deal. She says that she refused to agree to this tax change, which she would have done only on the grounds that it could look bad if it were misrepresented by political opponents.

Nigel Farage may not be so well versed in the detail but he too knows that the deal is a reasonable one. He also sees an opportunity, and the incentive structure of current politics means that he cannot allow Badenoch to outflank him.

As for Badenoch and Farage’s cheerleaders in the press, they also know exactly what they are doing, but the temptations of headlines of “tax cuts for immigrants” are too strong to resist.

One of the reasons that Badenoch and Farage advocated leaving the European Union was so that Britain could negotiate its own free-trade deals with countries around the world. Yet when the Labour government succeeds in a complex negotiation that protects the British national interest, especially on the sensitive subject of visa numbers, they pretend it is something it is not. “I think what frustrates them is we’ve done a deal that they couldn’t deliver on,” Jonathan Reynolds, the trade secretary, said this morning.

Reynolds can be faulted, possibly, for failing to prepare the ground with the British media; he appeared to have been taken by surprise by Narendra Modi, the Indian prime minister, suddenly announcing on Tuesday that the deal was done.

The attacks on “two-tier tax” were already all around the world on social media before the Labour Party’s rebuttal machine had got its boots on.

The bottom line is that this is a good deal and its critics ought to be ashamed of themselves. Are Badenoch and Farage now going to demand to scrap double taxation agreements with 50 other countries? Of course not. They ought to join principled free-trade Brexiteers such as Daniel Hannan, the Tory peer, in welcoming the deal. He said on Tuesday: “A comprehensive deal in goods and services is a win-win. A pity to see so much misinformation about it tonight.”

Then they should congratulate Keir Starmer and Jonathan Reynolds on securing a trade deal with the US, which, according to the Financial Times, might be announced this week, and then another with the EU, which will be unveiled at a summit at Lancaster House in a fortnight.