UK business urges Rishi Sunak not to increase visa fees for skilled workers

Business groups are calling on Rishi Sunak to reconsider a planned rise in visa fees for migrants. They argue that the increased levies would harm the UK’s competitiveness and hinder efforts to fill labour shortages.

In July, the British Prime Minister announced that he was going to increase fees for all migrants, including students and workers, as a way of funding pay increases in the public sector.

John Dickie of BusinessLDN urged the prime minister in a letter last week to “reevaluate this measure and take into account the impact of proposed changes on the UK’s business and economy”.

British businesses are struggling to find staff on a tight labour marketplace. Dickie also said that UK visas for work were among the most costly in the world.

According to the plan of the government, the cost for a skilled worker’s visa that is valid for more than 3 years will increase from £1,235 up to £1,480. The annual immigration surcharge, a mandatory levy that funds NHS access for migrants and has been frozen since 2020, would rise 66 percent to £1,035.

According to a letter by BusinessLDN (formerly known as London First), the total cost of bringing in a skilled worker, including other expenses, is close to PS10,000. This is before dependant costs are taken into account.

Dickie said: “At this time, when businesses are facing a challenging economic outlook and struggling to fill significant skills gaps in comparison to other countries, the measure undercuts our ability to attract top talent.”

BusinessLDN represents approximately 175 companies including some of UK’s biggest employers such as Lloyds Bank Legal & General J Sainsbury Unilever Deloitte PwC, PwC, Deloitte, and Legal & General.

Jonathan Haseldine is the policy manager of the British Chambers of Commerce. He expressed his concern over the planned increase in immigration levies.

He said that the rise in energy prices, interest rates and inflationary pressures are all causing problems for firms. There is a limit on how much extra cost businesses can bear.

Haseldine reiterated BCC’s call that the government expand its “shortage occupational list” so as to make it easier to hire overseas for more sectors.

Jeremy Hunt, the chancellor of the United Kingdom, is determined to implement the new fees for migrant workers despite the Treasury delaying certain government plans which would increase business costs or cause inflation.

Hunt stated last month that these fees would help fund pay increases in the public sector of between 5 to 7 percent. He also said that £1.4bn over two years could be raised by increasing visa fees, as well as the NHS annual “surcharge”.

The Home Office announced that the increased visa fee would be introduced this autumn, while the higher surcharge for health insurance would take effect at the end of the year or early in 2024.

Hunt’s ally said that there would be no delay. We need it to fund public sector pay awards.

Sunak stated last month that he “was not prepared to raise people’s taxes” in order to fund pay increases for the public sector and that financing the increases by borrowing more money would be “unresponsible”.