All the recent action with the Brexit White Paper, parliamentary votes, and the beginning of Trump’s presidency causing ripples from overseas, make is easy to lose sight of other issues affecting UK immigration. One of the most significant is the update to UK Visa Fees 2017. New rules are set for April of this year, and it is fair to say that some people will be less than reassured.

Whether the increases and changes that are being brought in are supposed to generate more income for the Home Office or to try and curb immigration is impossible to tell. However, it is clear that some element of “border control” is being applied in order to appease the millions who voted Brexit on the back of that issue. When looking at the changes it is very easy to see them as completely oppressive and unfair, but that depends how you look at them.

So what are the new changes in UK Visa Fees 2017?

The first stage of the minimum salary increase took place in November 2016 as an interim arrangement leading up the changes due this April:

  • Tier 2 visa applicants will need to have a basic salary of £30,000 (as opposed to the previous minimum of £20,800).
  • Immigration Skills Charge*: £1000 per person, per year
  • Immigration Skills Charge* – Small Business and Charities: £364 per person, per year
  • The Tier 2 (ICT – Short Term Staff) visa will be closed to new applications.
  • The minimum salary threshold for Tier 2 (ICT) higher earners who are able to work in the UK between five and nine years will be reduced to £120,000 (from £155,300)
  • One year prior experience will no longer apply to those earning £73,900
  • The minimum annual salary threshold for Tier 2 (ICT) applicants to be exempt from the one year prior experience requirement will be decreased to £73,900.

What does this mean for the shape of UK immigration and employment?

There are pros and cons with these changes and it all depends on your perspective. If all you care about is reducing immigration you might feel vindicated as the result could be a reduction in skilled workers. However, that doesn’t affect non-skilled employment levels in the UK, which is the lower end of the market, and equates most likely to those who would be in more need of social housing. Therefore, it wouldn’t address the housing problems, or the issues with over crowding in hospitals, and so on.

But if the minimum salary required from 2016 to 2017 has risen by 44%, how are smaller or medium businesses supposed to manage that increase in salary output? Add to that an annual charge of between £364 and £1000 for every skilled migrant worker it is hard to imagine a smaller company, or a medium company coping with those charges.

One of the main arguments in favour for the charges has always been to prevent employers recruiting solely outside the UK for jobs that could be employed with skilled people inside the UK, and saving money by offering lower wages. There is a very good logic to this because the average person in the UK has higher expectations of salary than people from, for example, Eastern European countries. By forcing the UK company to spend more on their non-UK workers means that their only viable option is to search harder in the UK first.

But is there a possible backlash to this?

I might not be a Master of Economics, but I am pretty good at maths, and with my own experience in work and unemployment I have a pretty good idea of the workforce in the country looks like. Having worked in education for many years I could very easily explain exactly why our developing workforce is so deskilled (but I won’t bore you with that just yet). Employers have been complaining for some time that young people – indeed, too many people – simply lack the basic skills to manage in the working world. Especially when any real level of skill is needed.

So here is my concern. Could these new UK visa fees 2017 present us with substantial rises in costs and open up the possibility of a long term crisis in Higher Education funding? Here’s the thought process:

  • UK workers not having the skills to do the job (poor education or priced out of training);
  • Employers forced to employ from outside the UK, especially to fulfil the higher level jobs;
  • Employers incur the additional charges and are required to offset the costs;
  • They do this by investing far less on lower level workers, recruiting them from inside the UK, possibly using zero-hour contracts, or contract worker employment status to reduce costs;
  • This results in more UK HE students falling below the student loan repayment threshold;
  • The knock on effect is a reduction in education funding for FE and HE as so few loans are being paid back;
  • Further deskilling the UK employment market;
  • So the cycle continues.

A matter of “wait and see”

With the onset of Brexit and all the changes that will bring, as well as needing to see how such new rules and charges, we will have to wait and see what the long term effect is. But the UK visa fees 2017 are a certainty. They will be happening. What we have to do is find other ways to support our industries, especially the small and medium businesses.

From an immigration perspective, it is clear that the UK needs immigration and regardless of the UK visa fees 2017 we are still going to need to think wider and more creatively that just controlling immigration numbers.

*There are some exceptions to the skills charge

To find out more about Tier 2 Visas please click HERE.