The real bravery behind the India trade deal

The UK and India have finally inked a trade deal. This is, in principle, a good thing. Free trade can generate wealth, raise wages, and widen the skills market available to the signatories’ respective economies. As well as winners, however, free trade also creates losers. 

An obvious loser from this deal is the British worker. Fresh from having his employer’s national insurance contributions (NICs) hiked, and perhaps out of a job as a result, he will now have to compete in the labour market with Indians who will be exempted from personal and employer NICs for three years. If Candidate A, a UK national, and Candidate B, an Indian migrant, go for the same job, with the same skills, same qualifications, and same length of experience, it will be cheaper to hire Candidate B. Purely because they are Indian rather than British. 

The same government that is telling the long-term economically inactive to get off their backsides and go find work is making it more expensive for employers to hire them. This might make sense on a macroeconomic level – ministers say it will contribute £4.8 billion annually to the economy by 2040 – but as political messaging it sounds tin-eared and even capricious. ​When Kemi Badenoch calls it ‘two-tier taxes from two-tier Keir’, it’s a cheap shot, but one the Prime Minister must surely have foreseen. 

Jawad Iqbal says Keir Starmer ‘should be given his due in getting the deal with India over the line’. Insofar as the PM has succeeded where the Tories failed, that is fair enough, but if he did so only or in large part because he was willing to concede the NICs moratorium, it seems more likely that he’s pulled off an elite-facing victory while saddling himself with a punter-facing problem. The public already dislikes the man, and came to do so remarkably early in his premiership, but most of all it distrusts him. He’s the guy who took away the pensioners’ winter fuel payments after an election in which he failed to mention these plans. He’s shifty, lawyerly, and you don’t know where you stand with him. 

You never want to be called ‘courageous’ in politics because it’s generally a synonym for ‘the voters are going to welcome this like a toothache on a bank holiday weekend’. Springing the news that he’s making it cheaper to hire Indians, given what the voters already think of him, given that he’s recently made it more expensive to employ those voters, given that the latest YouGov tracker shows immigration is a key issue for 48 per cent of voters, may be the most politically courageous thing Keir Starmer has done so far.