UK-India Free Trade Agreement
Debate between Iqbal Mohamed and Katie Lam(1 month, 1 week ago)
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Katie Lam (Weald of Kent) (Con)
The Indian Government are highly unusual in their approach to trade agreements. Unlike most other countries, India has a long-standing policy of using trade deals to try to secure favourable treatment in the immigration system. This deal, unfortunately, is no different. Under the terms of the agreement, Indian companies will be able to transfer their workers to this country far more easily and, once they are here, those workers will be able to avoid national insurance for up to three years, needing only to pay into the Indian social security system—payments that are, unsurprisingly, much lower than here in the UK. This national insurance holiday will make it much cheaper to hire Indian workers, especially in fields such as IT and engineering, than domestic talent.
Imagine a British IT firm is set to hire a computer programmer for £60,000 a year. On top of that, an employer must pay £8,250 in national insurance. That totals £68,250. To hire someone on the same salary, their Indian competitor would only need to pay about £1,470 to the Indian employee provident fund, to which mandatory contributions are capped at 15,000 rupees a month—about £120. That totals £61,470. Under the Government’s deal, it would, therefore, be at least 10% cheaper to hire an Indian worker than a British one. That is absurd.
Iqbal Mohamed
Does the hon. Member agree that employees of Indian companies who are sent here to work for three years and who then may stay on would normally not be paid the British salary level and would be happy to accept a lower salary? As well as saving on national insurance, these companies will be saving a lot more money by underpaying their employees.
Katie Lam
That is an important point because, as I am about to talk about, we have double contribution conventions with other countries, but not with other countries with economies like India’s where so many people—well north of a billion people—would be happy to do these jobs for much lower salaries than our workers at home would expect.
As I say, it is true that we have double contribution conventions with other countries. These aim to simplify intracompany transfers for international businesses. However, these agreements are usually struck with countries that have compatible economies, similar educational outcomes and comparable social security systems, such as Japan or Canada. India stands alone as by far the largest and least wealthy country on the list. In exchange for a deal with India, this Government have chosen to sell out skilled British workers who have worked hard to get where they are by allowing Indian firms to undercut them. We will see highly skilled British workers in cutting-edge fields, such as engineering, priced out by Indian workers. Given the relative markets and educational systems in the UK and India, we should not expect that always to be a like-for-like swap in terms of talent.
We have already seen this model take hold in the United States. There, Indian consultancy firms lease their workers to American companies, who are then able to pay an Indian worker far less than they would need to pay an American. The result has been a massive expansion in the number of lower-cost Indian workers at the expense of American workers. Most other countries are perfectly happy to strike trade deals without forcing us to undercut our own workforce. This Government should have expected India to do the same.
Budget Resolutions
Debate between Iqbal Mohamed and Katie Lam(3 months, 2 weeks ago)
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Iqbal Mohamed (Dewsbury and Batley) (Ind)
Does the hon. Lady agree that it is the linking of electricity prices and of renewable energy prices to gas that is creating these high energy prices, and that de-linking them would immediately cut prices for the consumer?
Katie Lam
That is not the immediate problem. The energy prices currently being baked in by the prices the Government are agreeing at the moment will see energy prices sky high for years and years regardless of what happens to the price of gas.
The Conservatives’ cheap energy plan will save households hundreds of pounds and offers a much-needed lifeline to British industry. I very much hope that the Secretary of State for Energy Security and Net Zero will adopt at least some of its measures.