Draft Immigration Skills Charge (Amendment) Regulations 2022

Stephen Kinnock Excerpts

Wednesday 16th November 2022 General Committees

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairship, Ms Fovargue.

We are somewhat surprised that the Government are introducing this statutory instrument, because it appears to utterly contradict the Home Secretary’s stated objective of reducing immigration. She seems to recognise that the public have been expecting net migration to decrease post Brexit, but as the latest migration figures indicate, this year’s net migration is set to pass 300,000, matching the highs seen in the year of the EU referendum. Today, however, we see attempts by the Government to increase migration even further by creating a further exemption from the immigration skills for sponsored workers on the scale-up route, as well as for EU national intra-corporate transferees who take the route of getting a global business mobility visa for senior or specialist workers.

We are not opposed, in principle, to recognising that in specific areas of our economy, removing the red tape involved in bringing in overseas workers can benefit Britain, but we are opposed to the Government lurching from one extreme to the other, using dog-whistle, anti-immigration rhetoric one day and throwing the doors wide open the next. The Labour party is taking a more balanced, nuanced approach by ensuring that immigration works for our economy and communities. We support the principle of a points-based system for migrant workers. It was, of course, the Labour Government of 2008 that introduced the points-based system for immigration from outside the European Union.

We are clear that there will be no return to the freedom of movement that there was when we were in the EU, but we will build on and make much-needed improvements to the points-based system that is in place. Our long-term ambition is to ensure that all businesses in every sector, and indeed our public services, recruit and train more home-grown talent to fill vacancies before looking overseas. For instance, we need to train up more home-grown doctors; hence our shadow Health Secretary’s commitment to doubling the number of clinical placements, and to setting out a five-to-10-year workforce plan for the NHS in due course.

We recognise that if we simply turn off the tap of migrant labour without putting in place appropriate workforce structures, training and recruitment strategies, our public services will deteriorate and our businesses will struggle to meet our wider economic ambition to make, buy and sell more in Britain. As a result, more jobs could well disappear overseas. There would be other consequences; we cannot continue with the situation in the farming sector. In the past year, 30,000 pigs have been slaughtered and £60 million of crops have been burned. We recognise that we need to attract talent to help us to drive growth, but we are clear that when businesses are supported in recruiting from abroad, that should come with a commitment to increasing UK-based recruitment and training, so that we reduce long-term dependency on overseas labour.

Five years ago, when the first set of regulations on the immigration skills charge were made, the Government were clear about its intended purposes. Introducing the charge would, we were told, incentivise employers to invest in training and upskilling the resident workforce, thus reducing reliance on migrant workers. The skills charge would essentially be a tax on the recruitment of foreign workers, and the proceeds would be reinvested in skills training via the Department for Education. There was a related change: the resident labour market test would make it necessary for employers recruiting from overseas to demonstrate that they had first tried to recruit from within the UK. That test was scrapped by the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) when he was Prime Minister, and the skills charge, while still in place, does not appear to be delivering its intended results, as is illustrated by this statutory instrument.

The regulations would exempt some sponsoring employers from having to pay the skills charge for migrant workers under the scale-up route, as well as some intra-corporate transferees. That implies that the Government are aiming to make it easier to recruit overseas workers, which is the exact opposite of what Ministers claimed was the purpose of introducing the skills charge. Does the Minister recognise this contradiction? Perhaps she could say whether this is a deliberate policy U-turn or just the result of incompetence.

It would have been helpful if an impact assessment had been published alongside the regulations. The scale-up route exemption could have far-reaching consequences. To qualify for the scale-up licence, a business simply has to show that it has increased either its profits or staff headcount by 20% on average each year for the past three years, and that it had more than 10 staff working for it at the beginning of that first year. How many businesses is that expected to draw in? It could be a really large number, could it not?

Since no such impact assessment has been provided, will the Minister answer the following questions? What exactly is the purpose of providing those exemptions, and what are the Government hoping to achieve in their overall immigration policy and strategy? What was the rationale for providing exemptions under the scale-up and global mobility schemes, but not for other skills-based routes? The explanatory note states that the reason no impact assessment was made is that

“no, or no significant, impact on the private, voluntary or public sector is foreseen.”

How can that possibly be, given how low the threshold is that I mentioned earlier?

Given the Government’s previous commitment to using revenue from the skills charge to invest in skills training for the UK workforce, and their previous estimate that the charge would raise £100 million in its first year, what on earth leads the Minister to believe that reducing the number of employers who have to pay the charge will have no significant impact? Has the Department done any work at all to assess what losses in Government revenue might result from those changes? Can the Minister guarantee that any reductions in funding for skills training will be made up from elsewhere in the budget?

Finally, if the Government are trying to support the growth of UK businesses, that is certainly welcome, but what has happened to the commitment to invest in skills training, so that growing businesses do not have to recruit from overseas? Have the Government just given up on those objectives? I look forward to the Minister’s response.

--- Later in debate ---

[Miss Dines]

I am grateful for the hon. Lady’s speech, although it may not be on the point of this technical change. I try my best not to be negative. This country is a magnet for businesses from across the world, and those who come under the skills schemes have very high-level skills. It is only right that the company sponsoring them pays into the kitty to promote our home development and training, which is exactly what the schemes will do. It is positives all round.

I know that the hon. Member for Glasgow North East would not want to be seen to be playing party politics on this matter. On Scotland moving away from the United Kingdom and becoming independent, she knows that the Government are committed to the Union. Although I am impressed by her fortitude in trying to make independence relevant to almost any issue, this is a technical regulation change. None the less, I thank her for her support, in that she is not opposing the regulations.

[Stephen Kinnock]

Will the Minister give way?

[Miss Dines]

Of course, although we really must conclude, rather than having a wide-ranging debate on everything to do with immigration. The regulations are about two exemptions that allow us to fulfil our legal obligations under our treaty with the EU.

--- Later in debate ---

[Stephen Kinnock]

I thank the Minister for giving way. My intervention is absolutely related to the regulations. I asked why there was no impact assessment. For the record, will she confirm that she does not think that there should be one, because she does not believe that the regulations could have a significant impact on the labour market? On cost, we are clearly reducing the number of employers that will pay the surcharge, so the changes will not increase revenue to the Exchequer as she says they will; they will do precisely the opposite. What will the cost to the Exchequer be? If there is to be no impact assessment, may I urge her to agree to keep the impact of this legislation under review, and will the Government make a statement on it within 12 months, so we can assess its impact on opportunities for our home-grown talent?

[Miss Dines]

I admire the hon. Gentleman’s ingenuity in asking for impact assessments; he has asked for one on almost everything that I have heard him speak about. However, the immigration skills charge is a tax, so an impact assessment is not required. If we had all the impact assessments that he has asked for, there would not be time in government to do much else.

I will conclude; the hon. Gentleman is always at liberty to write to me. The immigration skills charge is a financial tax through which the Government provide employers with vital funding that supports them in recruiting and training domestically. The regulations will not fundamentally change the operation of the charge; they simply create additional limited exemptions for highly skilled international workers recruited by UK scale-ups, and allow us to fulfil our legal obligations under our trade agreement with the EU relating to EU workers undertaking intra-company assignments in the UK. The exemptions will support our country’s economic recovery by supporting high-growth business in the UK and strengthening trade and investment to and from Europe. I commend the regulations to the Committee.

Question put and agreed to.