What is the Tories’ ‘Immigration Skills Charge’ and how will it impact the NHS?

Britain’s National Health Service (NHS) played a central role in the debate over whether to leave the European Union, and has now become a central campaign issue in the General Election. The parties nearly unanimously offer policies to bolster the NHS, calling for more funding, better training, and more positions open for doctors and nurses. But only one party – the Conservatives- have called for doubling a tax on hiring non-British workers. What exactly is the Immigration Skills Charge and what does it have to do with the debate over the NHS?

The Immigration Skills Charge

The Immigration Skills Charge came into effect in April 2017 as part of a revamp of the Immigration Act. Under the Act, employers who hire a skilled worker from a country outside the EU or Switzerland must pay £1000 per year per employee at the outset, when applying for each visa. The charge may not be passed on to the employee, and if the visa is rejected the employer is entitled to a full refund. The reasoning behind the legislation is clear: to discourage the hiring of non-British, non-European workers. This is laid out in an explanatory memo prepared by the Department of Education:

ISC report

As the policy memo lays out, the inconvenience of paying the Immigration Skills Charge (in addition to other fees and fines) discourages employers from looking outside the UK and Europe for high-skilled employees- instead, they should consider training people within the country for positions.

While this regulation seems logically aimed at achieving its stated goal in some circumstances, there’s a potential problem here. What about jobs where the level of skills required are so cost-intensive that training costs would outweigh fines? Or, in cases where the skills are urgently required, yet take significant amounts of time to develop? Doctors and nurses for the NHS would appear to fall under both categories. 

 

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The British Medical Association (BMA) has lobbied against the charge, writing in a letter together with the Royal College of Nursing that it would cost the NHS millions and not provide alternative, UK trained staff in time for replacing people from abroad.

It cannot be appropriate to divert funding away from the budget for front-line health services and the training of health professionals in this way. While the government has suggested that funds raised from the charge would be reinvested back into the UK workforce and health system, we have been given no guarantees to that effect…. [t]he UK’s health and social care system is not a business which has unlimited access to training places in the UK. Both nursing and medicine are highly skilled professions and long-term UK workforce planning for both is determined by the finite number of places available at UK medical schools and on nursing degree courses as well as on practice training capacity within the health system.

What would doubling the charge do to the NHS?

In their manifesto, Tories promise to double down (literally) on the Immigration Skills Charge by the end of the year.

However, skilled immigration should not be a way for government or business to avoid their obligations to improve the skills of the British workforce. So we will double the Immigration Skills Charge levied on companies employing migrant workers, to £2,000 a year by the end of the parliament, using the revenue generated to invest in higher level skills training for workers in the UK.

(Presumably, people from the EU or Switzerland would still be excluded from the charge, since the manifesto says nothing to the contrary.)

The NHS is Britain’s largest employer and applies for thousands of visas for its workforce every year. Undoubtedly the doubled Immigration Skills Charge will have a significant impact. But just how much of an impact?

Using numbers obtained through a Freedom of Information Act request published in The Guardian, we can see where recent figures stand. In 2015, there were 87,280 applications filed for tier-two visas for people coming from outside of the EU or Switzerland (the only ones the charge currently applies to.) Of these, over 6,000 were for NHS employees: 3,705 for doctors and 2,535 for nurses.

If next year had a similar number of applications and the double charge applied, the NHS would have to pay £12.1 million for the first year alone. Given that charges are levied for the entire period of the visa application up front, the real number could be much higher, depending on the length of the visa. For instance, if all of those persons applied for a three year visa, the costs to the NHS would be £36.3 million over one year of visa applicants- not counting the other types of fees that apply. With similar employment needs, and potential reduced entry by people from the EU to fill positions, this could eat up a significant chunk of the £8.6 billion the Tories are promising to fund the NHS with over the next five years.

What about Brexit?

The number of workers from outside the EU working in the NHS is relatively small compared to the staff from EU countries currently employed. The Tories have promised to prioritize these workers during Brexit negotiations:

We will make it a priority in our negotiations with the European Union that the 140,000 staff from EU countries can carry on making their vital contribution to our health and care system.

However, what kind of solution negotiations will land on remains completely unclear. Will people from EU countries working in the NHS have special rights to remain, with special visas? Will EU citizens wanting to work in Britain in the future continue to be excluded from the Immigration Skills Charge? Will they be included in net migration figures? If not, will this incentivize a preference for European employees over people from outside of Europe for long after Brexit?

Even with such a preference, the NHS could be headed for major staffing issues because of Brexit. A survey conducted by the BMA found that 42% of doctors from the EU considered leaving Britain after Brexit.

If doctors and nurses from Europe leave or decide not to come in the first place, while doctors and nurses from outside of Europe are prohibitively expensive to bring to Britain, how will the NHS meet staffing needs in the immediate future?

As with our discussion on international students, it appears that migration issues are seeping into other areas, potentially having a massive impact on the lives of British citizens for years to come. As Britain heads to the polls, it should be interesting to see how voters weigh the costs of allowing continued migration versus facing possibly dramatic changes to their health and educations systems.


Sources and Further Reading
The Immigration Skills Charge Regulation, Legislation.gov.uk
The Immigration Act of 2016, Legislation.gov.uk
Explanatory Memorandum to the Immigration Skills Charge Regulation, Department of Education, Legislation.gov.uk
BMA and RCN write to the Home Secretary over Immigration Skills Charge, BMA, April 2017
Conservative Party Manifesto 
Immigration Skills Charge Could Hit Health Funding for Years, The Guardian, April 2017
The Immigration Skills Charge, BMA
Brexit Dawns on the NHS, Tim Tonkin for BMA
Cover image via Iker Merodio on Flickr, (CC by-NC-ND 2.0) http://bit.ly/2rwwFlY

 

migrationvoter

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