This is so insane. Britain just signed a trade deal with India that includes making Indians working in the Britain exempt from paying national insurance.
A two-tier tax system where natives pay more. pic.twitter.com/QbxYNUx8ah
— Keith Woods (@KeithWoodsYT) May 6, 2025
The Labour government, led by Sir Keir Starmer, has signed a new trade deal with India, granting Indian workers and businesses exemptions from paying National Insurance in the UK for three years. This exemption has sparked backlash, with critics accusing Starmer of prioritizing foreign workers over British taxpayers, who are now facing higher costs under recent tax hikes.
National Insurance is a mandatory contribution paid by employees, employers, and the self-employed in the UK. It funds state benefits such as pensions, unemployment support, and healthcare through the National Health Service (NHS). Although it functions similarly to a tax, it is distinct from Income Tax, which funds general government spending.
Under the new trade deal, Indian workers in the UK will not pay National Insurance, while British workers and businesses must cover higher costs following Chancellor Rachel Reeves’ decision to raise National Insurance contributions to fill a £22 billion financial gap. The timing of this exemption has fueled accusations of a two-tier tax system, where UK citizens are forced to shoulder the burden while foreign workers enjoy special privileges.
Indian negotiators pushed for this exemption as a key condition of the trade agreement, calling it a “win” for Indian businesses seeking to expand into Britain. The Indian government believes the tax break will boost job opportunities for its citizens, but many in the UK question why British taxpayers are left footing the bill.
Labour officials argue that similar exemptions exist in trade deals with the US, EU, and Japan, yet critics say this policy is especially harmful given the recent National Insurance hike. Kemi Badenoch, the former Conservative Trade Secretary, rejected this proposal outright, citing concerns about unfair tax advantages, excessive visa allowances, and negative impacts on British industries. Nigel Farage has also condemned the policy, calling it a “betrayal of British workers”.
The long-term effects of this exemption remain unclear. Labour insists it will strengthen economic ties with India, but opponents warn it sets a dangerous precedent for future trade agreements. British citizens are now questioning whether their government is looking out for their interests or selling out domestic workers to score diplomatic victories.
Sources:
https://www.express.co.uk/news/politics/2051443/labour-india-uk-trade-national-insurance