Minister tells Commons today's trade deal only expands existing business mobility routes and does not impact points-based immigration system
The Government of India has announced that a major trade deal signed with the UK today will provide "greater global mobility for aspirational young Indians" and expand opportunities in Britain.
Image credit: WikipediaThe UK Government described the landmark agreement as a key step in its mission to grow the economy, raise living standards, and put more money in people's pockets.
Addressing the House of Commons, Douglas Alexander, Minister of State at the Department for Business and Trade, said in a statement that the deal ensures the UK's points-based immigration system remains unaffected. He later emphasised that the agreement covers temporary business mobility, not immigration, and is aligned with existing UK practices.
A key feature of the Free Trade Agreement (FTA) highlighted by the Indian government is a provision exempting Indian workers temporarily posted in the UK from paying UK social security contributions for up to three years.
The Indian government said in a press release on the free trade agreement (FTA): "In an unprecedented achievement, India has secured an exemption for Indian workers who are temporarily in the UK and their employers from paying social security contributions in the UK for a period of three years under the Double Contribution Convention. This will make Indian service providers significantly more competitive in the UK."
The press release further stated: "The FTA eases mobility for professionals including Contractual Service Suppliers; Business Visitors; Investors; Intra-Corporate Transferees; partners and dependent children of Intra-Corporate Transferees with right to work; and Independent Professionals like yoga instructors, musicians and chefs."
According to the Indian government, the FTA will open up immense opportunities in the UK for talented and skilled young Indians.
Speaking for the Opposition in the House of Commons today, Conservative MP Harriett Baldwin said she was "shocked" that details of the Double Contribution Convention had been left out of the Minister's statement and had not been mentioned in the UK Government's press releases about the deal. She said this agreement will come at a significant cost to the British taxpayer, and she asked the Minister whether it really means it will be 20% cheaper for companies in the UK to hire Indian workers over British workers.
"Will the convention really mean that, for example, an Indian-owned restaurant chain in the UK could pay no national insurance here for its chef, while the British pub next door pays full national insurance for its curry chef? […] This government is literally putting up taxes for British workers but cutting them for Indian workers. […] As it stands, this deal looks like it is subsidising Indian labour while undercutting British workers," Baldwin said.
The Minister responded with the assurance that the Double Contribution Convention was a reciprocal arrangement that will also benefit British workers in India. Douglas Alexander said the arrangement will only cover a specific and limited group of Indian businesspeople for a period of three years, and these workers will still be required to pay the Immigration Health Surcharge. He further noted that the UK already has similar social security agreements with a range of countries and trading blocs, including the EU and the US.
The Minister again emphasised that the trade deal does not affect the points-based system and it only covers business mobility. He stated: "On the broader immigration issue that the hon. Lady raised, I can assure her that the deal does not affect the points-based system. The points-based system is not affected by the agreement that we struck today. The deal only covers business mobility, which is different from immigration, as it is about travel for specific and temporary business purposes. As a result, UK businesses will benefit from additional business mobility routes supporting them as they expand into India. Student visas remained off the table."
Douglas Alexander later clarified in response to a further question by a Conservative MP that the UK has not given away visas or created new routes as part of the trade deal. He added: "Existing business mobility routes have been expanded for highly skilled and experienced professionals to cover additional sectors, but to qualify for these routes professionals must demonstrate that they meet the strict criteria for professional experience and qualifications."