The Government have said that the £1,000 per year immigration skills charge will be paid by employers who sponsor tier 2 migrants, with a reduced rate of £364 per annum applying to small businesses and charities as set out in the Immigration Rules. There will be an exemption in respect of migrants undertaking occupations skilled to PhD level, primarily science and research roles. An exemption will also be applied for graduates who switch from tier 4 to tier 2 for the purpose of taking up a position in the UK. As far as other areas, organisations and categories are concerned, the Department for Business, Innovation and Skills is apparently continuing to consult, including with devolved Administrations and other government departments.
In their letter of 7 April, on Ministry of Defence headed paper, the Government said that they intend to introduce the charge from April 2017 rather than from a somewhat earlier date provided for in the Bill. As they have also said that they are looking at phasing in the charge, can the Minister say what the intention to introduce the charge from April 2017 means as far as timescales are concerned?
The Government have confirmed that secondary legislation will be needed before the charge can be introduced. They expect to lay regulations in the autumn and to publish a draft before they are laid, with interested parties being given an opportunity to comment. There are difficulties with potentially significant issues being dealt with by secondary legislation because such proposed legislation cannot be amended, only accepted or rejected in its entirety.
There appears to have been little analysis provided on the impact of the immigration skills charge. Can the Minister say how much money will be raised by the charge; what percentage of existing training budgets that will represent; and for how many will this additional money provide the training envisaged? What analysis have the Government undertaken to show that the introduction of the charge will achieve the stated objective, as set out in the letter of 7 April, of encouraging employers to think differently about their recruitment so that, where possible, they recruit and train up resident workers and reduce the need to recruit skilled labour from outside the European Economic Area? Has an impact assessment been undertaken and, if so,
what did it indicate? By how many is it expected that the charge will reduce the need to recruit skilled labour from outside the European Economic Area?
The Government also ought at least to give a commitment that they will listen to and take into account the views of interested parties when the draft regulations are published prior to being laid; and also that interested parties will be given sufficient time to respond, bearing in mind that the draft could be published in the middle of the holiday season.
In looking at where, to whom and from when the charge will apply, what are the criteria against which the Government are determining and making their proposals? Against what criteria, for example, will proposals on the extent to which the charge should or should not apply in the National Health Service be formulated? While the decision not to apply the immigration skills charge to those switching from a tier 4 student visa to a tier 2 visa is a positive move for the health service, it will not as I understand it exempt overseas doctors recruited by the NHS on tier 2 visas to fill medical vacancies in hard-to-recruit medical specialties and areas.
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The Government have said that they will review the operation and impact of the immigration skills charge after a suitable period of operation. Within what kind of timescale does that actually mean? They have also said in their letter of 7 April that income raised through the immigration skills charge will be used to fund training in order to reduce the UK’s reliance on imported skills, and that further details will be set out in due course in advance of the draft regulations. Is that in advance of the draft of the regulations being published prior to being laid? Is the money raised from the charge going to be ring-fenced, and if so, in what way? Will it be ring-fenced in relation to the type of training on which it has to be spent, or in relation to the sector, organisation or organisations in which it has to be spent? Will money raised from the health service, if it is not exempt, have to be spent within the health service on training? If it is not going to be ring-fenced, what guarantees are there that the money raised will be used to fund training rather than for some totally unrelated purpose, and that the money will be additional money spent on training and not used to finance existing training commitments?
As far as the amendment is concerned, we do not share the view that the skills charge should not be introduced at all in the private or public sector until the end of March 2018, provided that it will be used to fund additional training, and neither do we consider that there necessarily has to be transitional provision for all institutions in the public sector, although we have along with others raised our concerns about the impact and necessity of the charge, for example, in the health service and the education sector.
I hope that the Minister will be able to respond to at least some of the questions and issues that I and other noble Lords have raised, since I share the concerns that have been expressed by the noble Lord, Lord Wallace of Saltaire, about the way this matter has been handled and the late stage at which it has been
brought forward into the proceedings on the Bill, and what appears, frankly, to be a lack of information about the charge, with the Government saying that we will have to wait until later on to find out what their intentions actually are.