Why is the UK Government using immigration application fees to fund pay increases for public-sector workers?

By Amer Zaman

on August 22, 2023

Read Time: 10 Minutes

When, on 13th July 2023, Chief Secretary to the Treasury, John Glen stepped forward in the House of Commons to announce that the Government would be hiking the immigration health surcharge (IHS) and immigration application fees to help pay for increased wages for public-sector workers, there was more than a little head-scratching.

That head-scratching was not in response to the notion of those in the public sector being deserving of a pay rise; that particular development was widely welcomed when Prime Minister Rishi Sunak announced it at the lectern that same day.

Instead, the questions being asked were in relation to the decision to specifically connect rises in immigration fees to the salaries of those in the NHS and the police – including the political, practical, and even legal implications of such a move.

How did the Government justify the fee increases of as much as 66%?

We recently covered the topic of the bumper rises in another news update here at Cranbrook Legal. For those who didn’t read that article, the changes can be summarised as follows:

  • A massive increase in the IHS, from £624 to £1,035 per person, per year, in the case of most main applicants; a whopping 66% jump. There will also be a big rise in the discounted rate for children, students, and holders of the Youth Mobility Scheme visa, from £470 to £770 per year.
  • A 15% rise in the cost of applying for a work or visit visa to the UK, and increases of no lower than 20% in the fees for those applying for study visas, Certificates of Sponsorship (CoS), settlement, citizenship, wider entry clearance, leave to remain, and priority visas.
  • The fees for students and those using a priority service are also set to be equalised, with the effect that, whether someone is applying from within the UK or outside the UK, they will pay the same amount.

However, what provoked much comment – largely negative – among many observers, was how explicitly the minister linked these immigration fee rises to the public-sector pay increases that had been announced the same day.

In his announcement of the hiked IHS rates, Mr Glen said that putting the surcharge up would “ensure that it covers the full healthcare costs of those who pay it… that increase to the surcharge will help to fund the pay rise for doctors.”

After his explanation of the decision to heighten fees “across a range of immigration and nationality routes”, and to equalise costs for those applying from inside and outside the UK, the minister commented: “That will help to cover more of the cost of the migration and border system, allowing the Home Secretary to divert more funding to police forces to help fund the pay rise for the police.”

Why do I need to pay the immigration health surcharge?

The immigration healthcare surcharge, or IHS, usually needs to be paid by anyone who is making a UK visa or immigration application. Its ostensible purpose is to help pay for the costs of UK healthcare that a migrant may require during their time in the country.

If you are one of the people who are subject to the need to pay the IHS, any failure to do so will mean that the Home Office rejects your application and does not process it. So, if you wish to apply for a visa in order to move to the UK, or to extend your stay in the country if you are already in the UK, you can expect to need to pay the IHS.

You will normally be required to pay the healthcare surcharge if you’re submitting a UK immigration or visa application:

  • For a stay in the UK for more than six months, if you’re applying outside the UK
  • For a stay in the UK for any length of time, if you’re applying inside the UK

Not everyone who makes a UK immigration application will necessarily need to pay the IHS; the situation for you will largely depend on the specific immigration status that you apply for.

If you are unsure whether you will need to pay the IHS as part of your own immigration application for the UK, please feel free to contact our award-winning solicitors for advice and guidance. You can call our central London-based team on 0208 215 0053.

How did public-sector and migrant representatives respond to the Government’s move on immigration fees?

From a political perspective, it isn’t too difficult to understand why the Government chose to present its immigration fee hikes in such a way.

There was a clear implication that if the Government had not put up the IHS and immigration fees to help fund the public-sector pay rises, they would have needed to find another method of affording them. Doubtless, the notion of increasing taxes in order to raise more money, or putting the already-strained NHS or other parts of the public sector under further pressure with even more cuts in spending, would hardly have been politically popular, either.

Indeed, in his statement in the Commons confirming that the Government “have accepted the headline recommendations of the independent pay review bodies in full,” the minister said it was “doing this while abiding by sound money, which… is our number one focus.”

However, it is also fair to say that many observers were distinctly underwhelmed by the Government so squarely using the situation in public sector pay as a justification for upping the IHS and other immigration charges.

It didn’t go without notice that the Government’s framing seemed to be designed to pit sections of society in the UK against each other. The Joint Council for the Welfare of Immigrants (JWCI) described it as a “blatant attempt to pit worker against worker and divide our communities”.

The JCWI also pointed out, from a practical perspective, that “the UK already effectively taxes migrants twice for healthcare”.

This point was echoed by Doctors in Unite, which represents junior doctors, general practitioners, and hospital consultants. It stated that “just like other workers, migrants contribute to NHS funding through general taxation… migrants are effectively ‘taxed twice’ to access the same service”, and described the Government’s positioning of the change as “immoral and divisive”.

Do migrants pay for the NHS?

If you are among the migrants who are required to pay the immigration healthcare surcharge (IHS) when they submit a UK visa or immigration application, you will be effectively paying for the cost of UK healthcare when you pay the IHS (putting aside the point, as made above, that any migrant who pays general UK tax is actually already “paying for the NHS”).

However, certain groups of migrants are exempt from paying the surcharge. These include people who:

  • Are seeking asylum or applying for humanitarian protection (or their dependants)
  • Are identified as a victim of human trafficking (or their dependants)
  • Are applying for indefinite leave to remain
  • The Home Office’s domestic violence concession applies to (or their dependants)
  • Would be having their human rights violated under the European Convention of Human Rights, Article 3, in the event that they were made to leave the UK (or their dependants)

Even if you are exempt from paying the IHS, you will still be able to access healthcare from the NHS. But on the other hand, if you are required to pay the IHS, this will still be the case even if you have a private medical insurance policy.

If you are in the UK on a visitor visa, or a visa that lasts for less than six months, and you need to access healthcare in the UK, you will need to pay for it at the point of use, unless you are exempt from the IHS.

In practical and legal terms, does the Government’s framing even make sense?

From quite a few different angles, the Government’s presentation of the increases in the IHS and immigration fees as a way of making improved public-sector pay affordable, seems dubious.

It has been questioned, for example, whether current law gives the Government the right to increase immigration fees for this reason. It is the Immigration Act 2014 that confers on the Home Secretary the power to set immigration and nationality fees. The considerations to which the Home Secretary may have regard are outlined in Section 68 of that Act:

In setting the amount of any fee, or rate or other factor, in fees regulations, the Secretary of State may have regard only to—

  • the costs of exercising the function;
  • benefits that the Secretary of State thinks are likely to accrue to any person in connection with the exercise of the function;
  • the costs of exercising any other function in connection with immigration or nationality;
  • the promotion of economic growth;
  • fees charged by or on behalf of governments of other countries in respect of comparable functions;
  • any international agreement.

Presumably, the Government believes – and would argue – that it is permissible to reshuffle Home Office resources in order to ensure that fees make a bigger contribution to the costs of the other immigration and nationality functions.

Such a list of restrictions doesn’t really exist in law with regard to the Government’s right to alter the immigration health surcharge.

It is also interesting to note, however, that in his statement announcing the fee increases, John Glen made much of the importance of “cutting high, persistent inflation.” He reiterated the Prime Minister’s previously announced goal of halving inflation during 2023, and said that the Government “must take responsible decisions on the public finances, because borrowing is itself inflationary.”

Naturally, here at Cranbrook Legal, we are specialists in UK immigration law; we are not economists or accountants, so we will not dwell for too long on this aspect of how the changes have been justified. However, it seems far from certain whether putting so much additional financial burden on UK migrants would be effective in keeping inflation down.

After all, UK employers that seek to obtain a sponsor licence from the Home Office so that they can recruit workers from abroad, typically do so because – in light of the well-documented shortages of certain skills in the UK population – they need to do this in order to hire workers with the skills they need. If such employers were able to hire suitable candidates within the UK instead, they would do that, not least as it would enable them to avoid the Home Office’s sponsor licence fees.

For the same reasons of a lack of skills within the existing UK workforce, many such employers continue to pay the IHS for the workers they do recruit from overseas. If, then, these employers need to pay an IHS that is now 66% more expensive, they are likely to need to pass on those costs to their customers.

This could have implications for the cost of all manner of goods and services, ranging from restaurant meals to care home fees, thereby furthering the very inflationary pressure the Government has claimed it is trying to avoid.

Could now be the time to move quickly to submit your immigration application?

Putting all such matters about the justification – or otherwise – of the immigration fee increases to one side, the fact remains that the Government is pressing ahead with them.

At the time of typing, we do not yet know exactly when the fee hikes are set to take effect. However, the timing of the announcement has led many observers to conclude that they could be in place as soon as the autumn. This, in turn, could have certain implications for any UK immigration or visa application that you were intending to make over the coming months.

Our advice, then, is simple: if you are in a position to submit your immigration application now rather than later, it could be an exceedingly good idea to consider doing so, especially if you are already on a tight budget that would make it difficult for you to afford the increased fees.

Call our team of professionals in UK immigration law today, on 0208 215 0053, or send us an email, and we will be pleased to arrange a free consultation with you. From there, we will be able to discuss with you how we could work together to help ensure the success of your application for a visa, leave to remain, or citizenship in the UK.

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