Immigration Skills Charge (Amendment) Regulations 2020

Lord Rosser Excerpts

Wednesday 7th October 2020 Lords Chamber

[Lord Rosser (Lab) [V]]

I too thank the Minister for her explanation of the content and purpose of this provision, which amends the Immigration Skills Charge Regulations 2017. The 2017 order set out the details for the payment of the immigration skills charge, which is levied on employers who sponsor a skilled migrant worker. This order amends the 2017 regulations by changing the definition of a skilled worker to whom the immigration skills charge applies to reflect the changes the Government are making to the Immigration Rules. At the moment, the definition of a skilled worker includes that they must have been the subject of a resident labour market test and have a certain level of qualification, namely level 4 and above of the Regulated Qualifications Framework.

The Government are scrapping the resident labour market test and reducing the qualifications needed to access the skilled worker route to include, as I understand it, the equivalent of A-levels—level 3 and above—of the Regulated Qualifications Framework. As the Minister said, both these changes were recommended by the Migration Advisory Committee. Thus the SI will redefine a skilled worker as someone who reaches a skills and a salary threshold, is sponsored by an employer and is applying on a route that permits stays of over two years, regardless of the length of stay of the particular individual. As has been said already, it also maintains the existing exemptions from the charge for sports people and ministers of religion.

Can the Minister say what impact the Government expect the changes made by this provision to have on the number of employers and the number of migrant workers accessing the skilled worker route after the end of the transition period, compared with the respective numbers who would have been expected had the changes in this provision not been made?

Can the Minister also say whether there is any limit on the number of migrant workers who can access the skilled worker route each year if they are sponsored by an employer and meet the qualification criteria? Is there any cap on the number? Can she indicate what overall increase in revenue from the immigration skills charge the Government expect as a result of the change in the definition of a skilled worker and the end of free movement?

The Minister has already told us how much has been raised by the immigration skills charge since it was introduced, but what percentage of the annual skills budget of the Department for Education does the income from the immigration skills charge represent? I await with interest the response of the Government to the concerns and questions of my noble friend Lady Goudie, the noble Baronesses, Lady Wheatcroft and Lady Ritchie of Downpatrick, and the noble Lord, Lord Paddick, who all raised very interesting points.

While we are not opposed to these regulations, they represent another wasted opportunity to improve the immigration system and support our NHS, because they do not exempt NHS employers from paying this charge. Paragraph 12.3 of the Explanatory Memorandum says:

“An Impact Assessment has not been prepared for this instrument. The charge is classified as a tax and is therefore out of scope of the new Better Regulation Framework.”


The immigration skills charge is thus, the Government agree, a tax, paid by employers who recruited from overseas instead of from the domestic workforce, and is intended to act as a disincentive and to promote local recruitment. In the context of the NHS, however, it punishes trusts and indeed taxes them, as they have to fill clinical skills shortage gaps by recruiting badly needed skilled staff, including specialists from abroad, with the Government simply taking back through this tax much-needed money from a sorely stretched NHS—money the Government provided to the NHS in the first place on the basis that it was needed to provide front-line hospital services. They are taking this money back through a tax from a health service even more sorely stretched during Covid-19 and facing the certainty that in less than three months’ time, with the ending of free movement, an even greater proportion of skilled migrant staff will attract the skills tax.

A recent freedom of information request showed that the quarter of NHS trusts responding had in total paid over £15 million pounds through the charge, or tax, since 2017. Local NHS trusts requiring specialists from overseas are being penalised and taxed for a failure by the Government to implement a skills strategy that provides sufficient available home-grown skilled staff for the NHS. The Government were forced into a U-turn on their policy of charging health and care workers from overseas to use the NHS they work in and support through the immigration health surcharge. However, the Government continue to insist on their employer paying the immigration skills tax and continue to claw back funds from already stretched hospital budgets. It does not make sense, and these regulations are another lost opportunity to rectify an inexplicable policy that will be further expanded to cover those coming from EU countries in less than three months’ time. The deficiency in these regulations is not in what they say but in what they do not say.