Impact of increasing the Immigration Skills Charge in the UK

As the CEO and Founder of an international business, I feel the need to comment on the current policy of the party likely to be elected to government in the forthcoming general election, the Conservatives, on the way that businesses will be able to hire skilled migrants from abroad.

The proposal, as stated in the manifesto released today, is as follows:

“we will double the Immigration Skills Charge levied on companies employing migrant workers, to £2,000 a year by the end of the parliament”

This is effectively a tax to deter companies from hiring skilled migrants from outside the UK. Migrants usually require a visa for at least five years, meaning that a company would need to pay £10,000 to the government to hire a skilled individual from outside the UK, an increase of £5,000 from the current level.

It’s important to remember that UK companies can only hire skilled individuals from other countries if a number of conditions are met – the most important condition being that the skills are not already available in the UK workforce. Jobs need to be advertised in the UK for at least 6 months before the position could be open to a skilled individual from abroad.

This policy will result in less skilled individuals coming to the UK. As the CEO of a business that operates within the global economy, this decision does not make sense. Skilled migrants are valuable to the economy and offer a net gain to the countries finances. Other countries are fighting hard to attract the brightest and best individuals to work within, and boost their economies. A direct result of this policy will be that UK businesses will lose out to their competitors from other countries, who can more easily attract skilled workers. Sadly, the impact will be felt more by small and medium sized businesses who will struggle to afford this increase. This policy will ultimately result in slower UK economic growth and loss of business to other parts of the world.

More details can be found in the following articles (and I am glad to read that I am not the only person who finds this policy unhelpful):

https://www.ft.com/content/b8be47e0-3ba0-11e7-821a-6027b8a20f23

http://diginomica.com/2017/05/18/election-2017-doubling-skills-levy-bad-news-uk-digital-economy/