Business Secretary Jonathan Reynolds faced intense questioning on GB News yesterday over the newly unveiled UK-India trade deal.The questioning came after accusations that the deal creates a "two-tier tax system" that "betrays British workers."READ THE FULL STORY HERE
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00:00Good morning to you, Mr. Reynolds. Let's stay on India, Pakistan, shall
00:03we, and that escalating tension between the two countries, obviously very
00:07concerning. Were you aware of India's plans to strike Pakistan? No, they
00:15don't share that kind of information with us. You will understand we have
00:18been monitoring the situation after the appalling terrorist attack in
00:23Kashmir some days ago and might have anticipated some kind of response, but
00:27we wouldn't expect the details of that to be shared with us, no. Could you
00:30share the details of the trade deal with the Secretary of State? I want to
00:37understand it. I'm just not sure I see the full benefits of it. Could you
00:41explain to me why we're doing or why you believe we're doing so well out of
00:45this? I could and I'm delighted to. So this is a massive deal that will benefit
00:53every part of the UK. It's the biggest trade deal we've done since
00:57Brexit. It's the best trade deal India has ever offered anybody. India is
01:02obviously a major economy, but it's growing so fast. It's the fastest growing
01:05major economy. And some examples of how this will benefit every part of the UK.
01:09So India is the biggest whisky market in the world. We're pretty good at making
01:13that. The tariff at the minute is 150 percent. That halves immediately, then it
01:16falls to 40 percent in time. On electric vehicles, again, something we're very good at
01:20making, 110 percent tariff becomes 10 percent over time for the high-end
01:25vehicles that we specialize in. For lamb and salmon, iconic British products,
01:29it's a 33 percent tariff and that goes to zero. And for services, even more exciting.
01:34So we get access to something no other country in the world has access to, which
01:38is Indian government procurement worth nearly 40 billion pounds a year. Our own
01:42businesses can compete alongside domestic businesses in India. So for every part of
01:47the UK, this means more growth, higher wages, more jobs, more tax revenue, exactly the kind
01:53of things that will make a difference to people's lives and make them better off.
01:56It has emerged, though, that Indian nationals that are moving here will no longer need to pay
02:01national insurance contributions for three years. So you have been accused
02:05of two-tiered tax for Indian migrants. Are you betraying British workers with this deal?
02:12No, absolutely not. And I'm delighted to be able to clear this up unequivocally.
02:19So let's be clear. If you were an Indian national in the UK and you applied for a job and a British
02:24person applied for the same job, you pay exactly the same tax. This is a very specific situation
02:29that we already have for 50 other countries where if you are an Indian national temporarily seconded to
02:35the UK or a UK national temporarily seconded to India, you don't pay both countries tax systems.
02:41If you're a UK citizen, you pay into ours. If you're an Indian national, you pay into theirs. It just makes
02:46it easier to move people between companies for a short period of time. But we would never do any deal.
02:52That undercuts British workers that leads to any sort of two-tier tax system. I say again,
02:57we have this with 50 other countries and I don't hear many complaints about that. I think what this is
03:02about, frankly, is people not being able to accept this is a major benefit. Well, the biggest trade
03:08deal we've done, as I say, since Brexit, everyone's going to benefit. We should all be getting behind
03:12this, these things that we can do together to make every bit of the UK better off.
03:16Yeah. But for British businesses with no
03:18national insurance, it's going to be cheaper, isn't it, to hire Indian workers rather than British
03:24workers. And this is at a time when the Labour government is obviously trying to get more
03:28people into work. It just seems counterintuitive, doesn't it?
03:33No, it wouldn't be the case. Just again, I say no one is being undercut by an arrangement of this
03:37kind. It means our people pay our tax system. Indian nationals pay theirs if they're temporarily
03:42for business mobility purposes seconded to each other's country. If you were recruiting someone,
03:47you pay the same taxes that are on it. Of course, even if you were transferring someone within a
03:52business, a multinational to the UK, you still have to pay the NHS surcharge. You still have to pay the
03:56higher costs of relocating people. And it's only temporary. If you want long-term staff,
04:00you've got to recruit them in the UK and pay that. I say again, there is no impact whatsoever
04:05on the immigration system from this deal. No changes to the points-based immigration system.
04:09There are no guarantees of post-study visas that was in the public domain at one point as an ask.
04:15There's no changes in terms of visas for healthcare workers. There's a very modest change where a capped
04:20number of yoga teachers can apply for an existing visa in a way they couldn't before. I don't think
04:24we're going to be swamped, frankly, by Indian yoga instructors as a result of this. It doesn't
04:30impact the immigration system. It does impact jobs, growth, wages in every part of the UK,
04:35with a particular benefit for Scotland, the north of England and the Midlands. It's frankly exactly
04:40what we need. How are you going to deal with people who are overstaying their visas, though? Because
04:44the last set of data that we have, which is actually from 2020 from the Home Office, Indian nationals
04:49were the largest group of overstayers by nationality at the time and concerned that that is still the case.
04:57Well, the point about people overstaying their visas and becoming illegal migrants rather than
05:02part of legal migration is a massive issue. You've seen a significant increase, actually,
05:06in deportations of people overstaying since the change of government. The Home Office cracking on
05:12with that job. So you're right to say you cannot allow a situation where legal migrants become
05:16illegal migrants. But the kind of people we're talking about, highly skilled people coming for
05:21short-term business mobility, to be frank, that is not the problem I think we're talking about
05:25in this area. I think what we have to do more broadly is bring the immigration numbers down. They've
05:29come down a fifth since the change of government, but they're still too high. And we've got to think
05:34about who is coming. We've got a lot of low-skilled people relatively coming to the UK. I welcome
05:39talent coming to the UK, but we've got to orientate that much more to the highly skilled sectors that we
05:44need. And that is part of our plans as a government. But totally recognise public concern is high on
05:49immigration. What we inherited is not a good situation or a sustainable one. We've got to bring
05:53those numbers down in a way that works with business. That's exactly what we're doing.
05:56And Jonathan, when would we begin to see changes being implemented because of this agreement? How soon
06:05would that be?
06:06Yeah, look, it takes about a year, 12 months on either side to put fully in place the measures
06:14that the trade deal covers. That's because we've got to put through parliament here the changes in
06:18our tariffs. We'll have, for instance, cheaper clothing, cheaper footwear from India as part of
06:23things that we have offered to India but benefit our consumers. And the same on the Indian side.
06:27Slightly different system there. And then for some of the tariffs, if you take that whiskey tariff,
06:31it halves immediately. And then there is a process over time where it goes down from 75%, the half
06:37rate to 40%. Some things are removed immediately. The salmon and lamb tariff is removed immediately.
06:42Access to procurement. So as soon as we implement the deal on either side, you start to get some of
06:47those benefits. We will see, for instance, immediately on ratification, a reduction in our
06:51tariffs paid to India of about ÂŁ400 million. That rises to over ÂŁ900 million over 10 years.
06:58India gets slightly less from that because our tariffs are already lower. That's why they're
07:02seeing some other parts of the deal to make sure it's fair and balanced. But look, good trade deals
07:06are good for both sides. This is great for the UK, for every bit of the UK. But I think it is good
07:10for both sides. Again, something we absolutely should celebrate and need more of. Well, look,
07:15great to see you so enthusiastic about this. I hope it lives up to everything that you think it will.
07:21And I appreciate your time this morning. We've got to leave it there. Thank you very much.
07:25Thank you so much. Thank you.