Draft Immigration Skills Charge (Amendment) Regulations 2025
(1 day, 7 hours ago)
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The Chair
I declare an interest: my wife sits as an immigration tribunal appeal judge in the Bradford Tribunal Hearing Centre.
The Parliamentary Under-Secretary of State for the Home Department (Mike Tapp)
I beg to move,
That the Committee has considered the draft Immigration Skills Charge (Amendment) Regulations 2025.
It is a pleasure to serve under your chairmanship, Mr Turner. The immigration skills charge was introduced in April 2017. Its aim is to incentivise UK-based employers, including the UK branches and subsidiaries of overseas businesses, to take a long-term view of investment and training. It is designed to address historical under-investment in training domestic workers by UK employers and to deter some from turning to immigration as a cheaper alternative.
The skills charge is paid by employers looking to sponsor skilled workers for visas lasting more than six months. It also applies if they wish to extend the employment for a further limited period. Senior and specialist workers also pay the charge, unless they are an EU national coming to work in the UK for less than three years. The increase will not prevent service supply by intra-corporate transferees from continuing, as it does now in line with our international trade commitments. The charge is paid up front when the employer assigns a certificate of sponsorship to a migrant worker and is calculated automatically based on dates provided by the employer as part of the sponsorship process.
The charge has raised approximately £2.7 billion since it was introduced. The income provides financial support to help maintain existing skills budgets across the United Kingdom, which is important for a range of reasons, such as ensuring that immigration is not seen as the sole solution to dealing with the skills needs in our economy. As education and skills are devolved, the income raised helps to maintain funding levels for each of the devolved nations. It is distributed between England, Scotland, Wales and Northern Ireland using the formula devised by Lord Barnett.
The draft regulations give effect to the commitment in the Government’s immigration White Paper, published on 12 May, to raise the cost of the immigration skills charge by 32% in line with inflation. From 16 December 2025, therefore, medium-sized and large employers will need to pay £1,320 per person they sponsor per year. There will continue to be a reduced rate for small and charitable organisations of £480 per person per year.
The money raised will continue to support skills programmes and give those already in the UK the opportunity to fill high-quality jobs needed for the future growth of the country. Upskilling workers already here in the UK will also help us to fill future jobs from within our country. That will reduce the need for businesses and organisations to rely on recruiting international workers, in turn helping to bring down overall levels of net migration. The Government have been clear that the levels of net migration have been too high and must continue to come down.
As is the case now, there will continue to be exemptions from the charge, such as employers seeking to recruit people into PhD-level occupations or to recruit a person who is switching from the student route, or where the person is being recruited for less than six months. The draft regulations make a minor update to the list of exempt occupations to reflect the latest occupational codes from the Office for National Statistics. They do not add or remove any occupations that are currently exempt, but in some cases reflect where occupations have been separated from groups.
The immigration White Paper set out a comprehensive plan to restore order to our broken immigration system. We must ensure that the immigration system strikes the right balance between bringing in workers who can fill skills gaps and investing in our domestic workforce. The immigration skills charge is designed to ensure that employers contribute to our continued investment in developing the skills that the country needs, sending the clear message that immigration should not be relied on as an easy alternative. The draft regulations support the Government’s ambitions to reduce overall levels of net migration and to aid our resident workforce in finding high-quality jobs through skills training. I commend them to the Committee.
Nick Timothy (West Suffolk) (Con)
It is a pleasure to serve under you, Mr Turner, and I am pleased to respond to the regulations on behalf of the Opposition.
Increasing the immigration skills charge is a welcome move, and my party has no objection to the legislation. Our priority must be to ensure that every British citizen has the opportunity to gain the right skills and find good work. When an employer hires from abroad, it is only fair that they should pay their share towards investing in our own people. That sound principle was established by my party in government. However, the regulations alone will not achieve the transformation that we need in our immigration system.
The Home Secretary has said that the Government
“will do whatever it takes to secure our borders”,
and the Minister said just now that net migration remains too high and must come down, but tough words have not led to a real plan for cutting immigration yet. Ministers have tried to claim some credit for the almost 50% fall in net migration triggered by the visa changes introduced at the end of the last Parliament. I want to be clear that my party believes that even that leaves immigration unacceptably high. The Government’s impact assessment forecast an absurdly tiny reduction—of only 14,000—in net migration through the measures in the immigration White Paper, which the immigration Minister mentioned.
Where the Government have acted, they have announced several proposals to make it easier for people—such as Afghan dependants—to come to the country and even to create a new scheme for Gazans and their dependants. The Government said that they would “smash the gangs” and stop the crossings, but the deal with France has already failed. It is not even one in, one out and back again. Ninety-four people have been sent back to France but more than 12,000 have come here since the deal came into effect. On the training of British workers, the Government have defunded level 7 apprenticeships for anybody over the age of 22.
Pumping the economy with cheap foreign workers has harmed our productivity, undercut wages and changed the social fabric of our country. We have a short-termist economic model that prioritises consumption over investment and imported labour over British workers. My party’s position is clear: net migration must be brought down drastically, but we must also have a robust and ambitious post-16 education system that gives young people in this country the chance to thrive in the trades and industries of the future.
Mr Will Forster (Woking) (LD)
After years of mismanagement by the Conservatives, our immigration system is a mess. Public trust has been shattered, and it is up to this Government to restore that confidence and rebuild our broken immigration and asylum system. It is right for the Government to increase the immigration skills charge in line with the rate of inflation, and it is right that it was introduced in the first place to ensure that we invest in our domestic workforce. However, the Liberal Democrats believe that increasing this charge for those in the health and social care sector is a mistake. It makes zero sense to penalise hospitals and care homes that are trying to hire the staff they desperately need. It transfers money from the NHS to the Home Office at a time when our GPs, hospitals and hospices desperately need money, so please will the Minister consider putting the health and social care sector on the reduced rate?
Mike Tapp
I am grateful to hon. Members for their contributions. I am pleased that the hon. Member for West Suffolk agrees with this policy. There is endless amusement for me in being lectured by the Conservatives on the immigration system. I hope that continues, because we need some amusement in this place.
Nick Timothy
Is the number of channel crossings up or down in the last year?
Mike Tapp
The crossing rates are very similar to those of 2022. In 2018, 400 crossed; more than 150,000 have crossed since then. There is no doubt that we inherited open borders from the Conservatives, and that is why the amusement continues. We have said that we will do whatever it takes. By that we mean that there is more to come. I am not going to ruin the party with policy announcements in this Committee.
Regarding the Gazan refugees, we are a firm but fair Government. Where we need to help people, we will. It is a shame that that view is not shared by the Opposition. I will touch on the pilot scheme with France, which was criticised. It is what it says on the tin: a pilot. The Conservatives were begging for that pilot from the French, but obviously could not strike the deal. The scheme will grow and as it grows, it will form more of a deterrent to those sitting in Calais. We look forward to that.
I welcome the questions of the hon. Member for Woking about the NHS. His points are valid. However, we are clear that we need to ensure that the public sector, as well as the private sector, recruits from the British workforce. There are plenty of young people, and elderly people, who would love to—and could—work in the NHS. The measures will encourage that.
Mr Forster
Will the Government agree to study the impact on the health and social care sector of increasing this charge?
Mike Tapp
When we froze the social care visa route, lots of consultation was conducted to ensure that we fully understood the implications. We fully understand that to go in the right direction for this country we need to incentivise the public sector and the private sector to recruit from the skills that we have here. We are the sixth richest nation on Earth: there is a lot of talent here; we did not get there by accident. We must continue to encourage all companies and the public sector to recruit from within.
Question put and agreed to.