Kemi Badenoch has become embroiled in a war of words with India over the country’s trade deal with the UK.
The Tory leader has criticised tax breaks for Indian workers in the UK which are a key part of the agreement brokered by Keir Starmer’s government.
Under the arrangement, workers seconded to the UK from India-based companies will be exempt from paying National Insurance for three years.
The same arrangement will be put in place for British employees in India.
Badenoch has described it as a “two-tier” tax arrangement which will harm British workers by making it cheaper to employ those from India.
But the Financial Times reported that Badenoch agreed to a similar arrangement when she was trade secretary in the last Tory government, although a final deal was never agreed.
One Indian official told the paper: “The Tories offered us two years but we said it wasn’t enough. They put it on the table. We wanted more than three, but the principle had already been conceded in return for some gives on our sides on services.”
Another said: “It’s amazing. It was on the table when she was trade secretary.”
Responding on X, Badenoch described the story as “fake news”.
She said: “This is total and utter rubbish. I never agreed to any such tax deal. The evidence couldn’t be clearer — I refused to sign the deal. As I have always said – No Deal is Better Than a Bad Deal.”
Downing Street has insisted that similar tax arrangements are included in trade deals the UK has with around 50 other countries.
Despite the row, Badenoch did not raise the issue at prime minister’s questions today.
Defending the trade deal, which will see tariffs slashed on a range of UK exports to India, Starmer accused the government’s critics of talking “incoherent nonsense”.
He said: “It’s a benefit to working people. It’s in the agreements that we’ve already got with 50 other countries.
“And if [Nigel Farage] or the leader of the opposition is seriously suggesting that they’re going to tear up agreements with 50 other countries create a massive hole in our economy, they should get up, and they should say so.”
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