Immigration (Health Charge) (Amendment) Order 2023

Baroness Brinton Excerpts

Tuesday 12th December 2023 Grand Committee

The health charge is designed to benefit the NHS and support its long-term sustainability. The government manifesto committed to increasing this charge to NHS cost recovery levels. The order delivers that commitment, and I commend it to the Committee and beg to move.

[Baroness Brinton (LD)]

My Lords, I am grateful for the Minister’s introduction to this statutory instrument, but he raises more rather than fewer questions for me. First, I point out that it would perhaps have been helpful to have debated together this SI and the Immigration and Nationality (Fees) (Amendment) (No. 2) Regulations 2023, debated on Monday 4 December, as many of the arguments raised by the noble Baroness, Lady Lister of Burtersett, and others in her regret Motion debate also apply here. The Home Office may see them as separate but, for the migrant, it is part of a large increase in the visa taxes that they and their dependants have to pay up front.

This SI, alongside all the other legislation that the Government are introducing in relation to immigration, shows that, frankly, the current system is broken. These damaging new rules mean that British employers cannot recruit people they need; more families will be separated by unfair and complex visa requirements; and public confidence in the system has, frankly, been shattered.

One sector particularly severely affected will be our universities and research councils—I declare an interest, as I worked in that sector for 20 years. They will struggle to recruit the best international students because the cost for students, whether undergraduate or graduate students, post-docs or even senior research associates, will rise, because the fees charged by this Government are becoming a real barrier.

This week, Times Higher Education quoted Shashi Singh, who obtained his PhD at the prestigious Indian Institutes of Technology, which is on a par with the absolute best in the world—fewer than 4% of applications to study there are accepted. He is now a senior research associate in molecular biology at the University of Glasgow School of Infection and Immunity, and exactly the sort of world-leading scientist we should be encouraging to stay. He said:

“Last month, I paid £6,000 for settlement of my wife and daughter. When postdocs’ salaries are around £40,000 a year … that’s a huge strain on your family budget”.


He explains that the family cannot afford a car or taxis, because that

“money is needed to buy food or has already been used to pay for visas”.

This year, he, his wife and daughter would have paid a total of £1,718 for their annual health charge. Next year, with the 66% increase, it rises to a total £2,846.

I noticed in his introduction that the Minister said very clearly that the fee was separate to the visa fee. The problem is that those being charged do not feel that it is separate. The graph in the Explanatory Memorandum shows that in fact hardly any fee waivers were granted over the past three years.

In 2021-22, international students contributed £41 billion to our economy. That means that every 11 non-EU students generate £1 million-worth of net economic impact for the UK economy. This covers fees and payments for living costs such as rent and food. The problem is that post-docs such as Shashi will consider not coming to the UK at all. This is exactly the target group whom the Government should be supporting, not trying to deter. Their contribution to their university and their local community, the quality of their research and paying taxes are everything that this Government should aim for with their repeated mantras about “world-beating research”, yet it seems that the current Prime Minister has already forgotten Boris Johnson’s global talent scheme. Will the Minister explain how we will attract and retain the brightest of academics, whether students or post-docs, to deliver world-beating research when the Government are charging them these very large sums for a number of visa taxes?

Frankly, the increase in the health charge is the most extraordinary this year. The Secondary Legislation Scrutiny Committee’s fifth report sets out a range of concerns relating to it. It states that the Government’s methodology is “unconvincing” and does not explain with evidence the justification for this large increase. A more cynical person might feel that “made up on the back of an envelope” would be more appropriate. Certainly, if you read the detail of the Explanatory Memorandum, it is extremely difficult to find the method. The Home Office’s explanation is that there are three elements to the calculation: the overall cost of the NHS, the total population and then a “factor” that adjusts for the fact that migrants tend to use the NHS less than the average person because they are younger on average. So you divide overall cost by the population then multiply by the migrant costs factor to provide an estimate of the cost of the average migrant to the NHS.

The SLSC reiterates the point that the reason the amount has increased so much is because on one of those three data points the Home Office has substantially increased the migrant cost factor, but with no evidence. It is no good turning to the Explanatory Memorandum to the instrument because that provides no details on why the charge is to be increased at a rate well in excess of national health spending. The latter has increased by 25% since the last increase in the health charge, whereas the health charge is increasing by more than two-thirds, as I said earlier. Will the Government undertake to publish the full methodology before this SI is enacted and certainly before it is implemented?

Worse, the impact assessment on page 5 of the SI bundle states:

“Baseline volumes of visa applications are based on Home Office internal planning assumptions. The volumes used are highly uncertain and may not match actual numbers in future published statistics. The impact of increased IHS on volumes is based on assumptions of price elasticity of demand for visas”.


Will the Minister say what “price elasticity” means and how it has helped the Government come to the proposed increase? Surely it must not mean an excuse for charging whatever sum the Government want to increase it by a year, but without that empirical evidence of the background data, it is almost impossible to determine this.

There is a place for immigration and nationality visa fees but they should remain affordable, and if they have to go up, the increase must not be higher than inflationary levels. It is vital for our economy that British employers must be able to hire the workers they need, and those who choose to come to the UK to work or study should be welcomed for the skills and contributions that they bring, no matter how short a time they are here for. Most do not stay; they remain for a limited period only. Everyone should be able to have confidence that the immigration system is functioning properly. Our Benches would make migration work for the UK with merit-based work visas instead of an arbitrary salary threshold, which is a further problem.

At the moment, however, the real issue is how many of our migrants are going to face this enormous surcharge in the NHS fee, which has not been justified in any of the documentation provided by the Home Office.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

The noble Lord makes a very strong case for footnotes, and I hope that my officials are paying attention to that.

On the questions raised by the noble Baroness, Lady Brinton, about the deterrent effect on migrants, the UK continues to welcome talented individuals from around the world who want to study and work here. It is difficult to isolate the impact of the health charge increase on visa demand, due to the 2020 increase coinciding with the Covid pandemic and EU exit, but evidence from visa applications over the period following the increase to £624 does not suggest any significant impact on application volumes. Visa application volumes are monitored and there remains a substantial demand for visas across the majority of the immigration routes. All fee levels across the immigration system, including the health charge, are kept under review and evaluated where appropriate.

The Government’s science and technology framework sets out 10 key actions to achieve the goal of becoming a science and technology superpower by 2030. The global race for science research, technology and innovation is becoming increasingly competitive. The Government are committed to making the UK the best place in the world to work for top scientists, researchers and innovators, and we are delivering the biggest increase in public R&D investment, including training our next generation of doctoral and post-doctoral RDI talent, having already committed to investing £20 billion in R&D in 2024 and 2025.

[Baroness Brinton (LD)]

I know that we are not discussing this today, but I referred to the increase in the income threshold to £38,500. If that is the case, why was it set at that level, when post-doc salaries start at £35,000, immediately making that important group of people unable to come here?

[Lord Sharpe of Epsom (Con)]

I was about to say that the Government launched the global talent network in 2022 to support recruitment of exceptional talent in priority areas, such as artificial intelligence, with direct support and information on attractive opportunities in the UK. The noble Baroness is right that this question is not germane to this instrument. We dealt with the increase in salary levels last week. I cannot remember the precise exemption for doctoral students, but there was a PhD exemption.

[Baroness Brinton (LD)]

Was that for post-doctoral students?

[Lord Sharpe of Epsom (Con)]

I will have to come back to the noble Baroness—I cannot remember.

[Baroness Brinton (LD)]

Perhaps the Minister could write to me afterwards. I am talking about post-docs, who arrive with a PhD on a salary of £35,000. They now have a problem because of the level at which this has been set. The point I was making is that this large increase and the other visa fee increases make the whole thing impossible. That is the real worry of universities.

[Lord Sharpe of Epsom (Con)]

As I said, I will write, because I cannot remember the precise details and I do not want to say anything that I will have to correct.

It is also important to highlight that, although current comparisons can be made, other countries do not have healthcare systems that are directly comparable to the NHS. However, when comparing the total healthcare costs and the costs as a proportion of salary, analysis shows that the health charge at its new rate is broadly equivalent to that in Germany.

We are not trying to deter migrants and reduce net migration by increasing these charges. The health charge simply reflects the cost to the NHS of providing health- care to health charge payers. It supports the sustainability of the NHS. It is not a tool to reduce net migration. It is a public sector fee and cannot exceed the cost of providing treatment for health charge payers. The health charge cannot be used for any purpose other than to fund healthcare for health charge payers.

Migration volumes have increased since the current health charge rates were introduced in 2020. The direct impact that the health charge increases have had on migration are difficult to determine due to the factors that I mentioned earlier and the impact of the Covid pandemic coinciding with the recent increases, but they certainly do not appear to be statistically significant, although that is probably over-egging it a little.

Regarding the Government’s assessment of the impact of the current rates of health charges on visa volumes, no formal review has been undertaken to assess their impact on immigration. That is partly due to the 2020 increase having coincided with the pandemic and EU exit. However, we monitor visa application volumes, which have been at record highs, as noble Lords will be aware, across the majority of immigration routes. All fee levels across the immigration system, including the health charge, are kept under review and evaluated where appropriate. To answer the specific question about price elasticity, it is basically about migrants’ willingness to apply for a given visa given an increase in price. This is derived from published academic research. I can provide links as required.

In terms of impact assessments, we have considered this; a full regulatory impact assessment estimating the impact of the IHS increase was published alongside the legislation. The Government have considered the impact that increases to the health charge will have on visa volumes, as I said. The regulatory impact assessment published alongside this estimates the potential impact on visa volumes using different scenarios. The Government have considered the impact that the health charge increases will have on specific types of immigration. The regulatory impact assessment estimates the impact on migrants and visa volumes for each individual liable route. As I said, the immigration health surcharge is not a net migration policy. The published regulatory impact assessment provides estimates for the potential impact on visa demand under different scenarios.

I think I have answered most of the questions asked of me. I will write on those that I have not answered and the specific points raised during the debate. I finish by saying that the NHS was founded to care for every citizen in their time of need. We have to cherish and preserve that principle, but it is right that migrants granted temporary permission to be in the UK make a financial contribution to the running of NHS services available to them during their stay. On that basis, I commend the order to the Committee.