In July, U.K. Prime Minister Rishi Sunak made an announcement that he was going to increase immigration fees by at least 15-20%.
The reasoning for the increase was to partially fund the public sector pay rises, including for health-care professionals. Leaving aside that our public sector workers do an amazing job and deserve a pay rise, you may ask: Why should migrants pay for public sector pay rises such as for National Health Service (NHS) staff?
As recent research from The Migration Observatory has shown, the NHS has increasingly relied upon the immigration system to recruit vital staff from overseas. The report notes that “the health and care sector has never admitted such large numbers of work visa holders as in the immediate post-pandemic period under the post-Brexit immigration system.”
The government knows full well the NHS has experienced massive staff shortages, and it created a Health and Care Worker visa to help recruit more staff. Yet across all sectors, the government is happy to levy increased visa application fees on migrant workers—who already pay income tax plus normally an extra payment toward the NHS in the form of the Immigration Health Surcharge (IHS). On 4 October, the main immigration visa costs will increase. In addition, at the end of this year or the start of next, the IHS will increase from £624 to £1,035 per person per year.
To put this in context, if you hold a Skilled Worker sponsor license and want to sponsor someone with a partner and, say, three children to come to the U.K. for five years, it’s going to cost you, the employer/sponsor, in the region of nearly £30,000 (before the IHS fees go up) and the costs need to be paid upfront. Post-Brexit, the number of Skilled Worker visas has skyrocketed as employers struggle to find onshore the skills and experience they need. Is this really the right way to cover health care workers’ and teachers’ salary increases?
The immediate impact of the announcement was that many businesses have already implemented their budgets for the year. Having the additional costs is unlikely to impact large corporates, as they will bear the costs as part of the process. The true effect will be on the smaller companies who simply can’t cater to the additional financial burden that sponsoring talent to the U.K. will bring. Rather bizarrely, the U.K. government often talks about wanting the U.K. to become the next Silicon Valley, and some might even say we are already, but with such increased immigration costs, many tech startups may look elsewhere, as the increases will be seen as insurmountable. We have also noticed that many employers are seeking to include clawback clauses in employment contracts so that they are able to recover the majority of costs from the sponsored employee if they leave before the visa expires.
It is often the case that the immigration costs should increase along with inflation, but to have the reason as being to use that income to pay our public sector workers more feels rather uncomfortable. Our public sector workers are very important to the country, and I absolutely advocate that they most definitely should be paid more, but to use the increase in immigration costs as the way to do it? The problem is: Will the government provide clear evidence that the income from the immigration increases has been passed on? The Home Office accounts show that only a fraction of fee income from both the IHS and the Immigration Skills Charge are transferred to the government’s central consolidated fund. In the next few months, we propose to file a Freedom of Information request and shall ask these questions.