Keir Starmer accused of two tier taxes for Indian migrants

Key Accusations

Keir Starmer faces criticism for allegedly creating a two-tier tax system that benefits Indian migrants while raising National Insurance for British workers. The Tory shadow justice secretary, Robert Jenrick, highlights this perceived disparity as unfair to British citizens.

The Trade Deal

The UK-India trade deal includes reductions in tariffs on various goods, boosting the UK economy by an estimated £4.8 billion by 2040. A "double contribution convention" prevents double taxation on National Insurance for Indian workers temporarily in the UK for three years. This provision, however, is contested, with critics arguing it incentivizes hiring Indian workers over British ones.

While the government claims the impact will be limited to a small number of workers, they have not released detailed data on the number of affected individuals. The number of work visas issued to Indians in 2024 was 81,000, but it is unclear how many of these individuals will benefit from the tax exemption.

Further Points of Contention

• Labour counters the accusations, calling them a distraction tactic from the government's failures in local elections.
• The government highlights that the deal includes no changes to broader migration rules.
• The deal offers benefits to both countries, with India reducing tariffs on UK whisky, gin, and automotive products, while the UK lowers tariffs on Indian clothes, footwear, and food.
• Potential future trade deals with the US are also discussed, which could shield British car makers from Trump-era tariffs.

Ongoing Scrutiny

The trade deal is currently undergoing parliamentary scrutiny and is not expected to come into effect for another year. The government's refusal to release data on the number of Indian migrants who will benefit from the tax concession remains a point of contention.