I took part in the Draft Immigration (Health Charge) (amendment) Order 2023 (First sitting) committee. See my full speech below:
It is a pleasure to serve under your chairship, Mr Pritchard. The immigration health surcharge, or IHS, was introduced in April 2015, at which point it was set at £200 per year. The stated purpose of the policy was to
“ensure that migrants make a proper financial contribution to the cost of their NHS care.”
Well, we have come quite a long way since then. The level of the charge first rose from the initial £200 to £400 per year in 2019, and then to £624 in 2020. Now, thanks to this statutory instrument, the main rate is set to rise further still to £1,035 per year. That represents an increase of 66% from the current charge, and more than 400% compared with five years ago.
While Government revenues from the IHS have increased massively since its introduction—far in excess of increases in health spending, by the way—the intent of the policy seems to have shifted significantly. While the IHS has, to date, primarily served as a means of topping up health spending—according to Ministers—the increase provided for in this SI is explicitly linked to the Government’s commitments on public sector pay.
To be clear, that amounts to a massive cross-subsidy from the Home Office to other Government Departments, with the IHS now raising money for pay increases across the public sector, including for police and prison officers, teachers and members of the armed forces, as well as doctors and nurses.
Labour supports the planned pay rises for hard-working and hard-pressed public servants. However, it would be remiss of me not to ask questions of the Minister about what could be wide-ranging consequences of raising the IHS to the level set out in this order.
The impact assessment acknowledges that the higher charges
“could deter some potential migrants from applying to enter or remain in the UK.”
However, there simply is not enough evidence for the Government to be able to produce reliable forecasts of how such effects will play out in practice. The Government have already been warned by some of our leading universities that they could face tuition fee losses in the hundreds of millions of pounds if, as they expect, the increasing costs of studying in the UK become prohibitive for many international students and academics, who may simply vote with their feet and choose to study elsewhere.
The Government themselves acknowledge that risk in their own impact assessment, but they offer very little in the way of plans to mitigate any such impacts, or to reassure universities and employers that the actual effects of this order will be closely monitored by Ministers, with appropriate steps taken to mitigate any unintended consequences of which they may become aware in the coming months.