Germany is set to tighten its laws to crack down on gangs smuggling migrants to the UK by the end of the year, Downing Street has said.

The announcement comes alongside a new agreement between the UK and Germany covering areas including migration, business and defence, which will be signed during Friedrich Merz's first official visit to the UK as German chancellor on Thursday.

The changes will make it illegal in Germany to facilitate illegal migration to the UK.

Facilitating people-smuggling is not technically illegal in Germany currently, if it is to a country outside the European Union, which, following Brexit, includes the UK.

Downing Street said the move will make it easier for German authorities to investigate and take action against warehouses and storage facilities used by smugglers to conceal small boats intended for illegal Channel crossings to the UK.

Berlin agreed to tighten its legislation in December under the previous government but the new chancellor is now expected to commit to changing the law by the end of the year.

A BBC investigation last year exposed the significant German connection to small boat crossings, with the country becoming a central location for the storage of boats and engines.

Sir Keir said: "Chancellor Merz's commitment to make necessary changes to German law to disrupt the supply lines of the dangerous vessels which carry illegal migrants across the Channel is hugely welcome."

The German agreement comes a week after the UK announced a new pilot returns scheme with France, during President Emmanuel Macron's state visit.

Under the "one in, one out" deal, some small boat arrivals would be returned to France in exchange for the UK accepting an equivalent number of asylum seekers with connections to the UK.

Prime Minister Sir Keir Starmer is under pressure to tackle the number of people crossing the Channel in small boats.

More than 21,000 people have made the dangerous journey so far this year - a 56% increase on the same period in 2024.

The Conservatives' shadow home secretary Chris Philp claimed the figures showed " the crisis in the Channel continues to spiral".

"This is just more of the same tired, headline-chasing from Keir Starmer," he said.

"He's scrambling to stay relevant with yet another gimmick, but this latest press release is not a plan but a distraction...

"This government has clearly lost control of our borders and left the country exposed when they cancelled our return deterrent."

Defence and security is also on the agenda for the visit, with the leaders set to discuss support for Ukraine.

The pair will unveil a new agreement to boost UK defence exports such as Boxer armoured vehicles and Typhoon jets, through joint export campaigns for co-produced equipment.

Downing Street said the agreement was likely to lead to billions of pounds of additional defence exports in the coming years, boosting the economy and jobs.

A cooperation treaty will also establish a new UK-Germany Business Forum to facilitate investment in the two countries.

A series of commercial investments in the UK are being announced to coincide with the visit, worth more than £200m and creating more than 600 new jobs.

Among the companies involved are defence tech firm STARK, which will create 100 jobs through a new facility in Swindon - marking the company's first expansion outside of Germany.