Employers face a hike in visa fees for skilled migrant workers, after the government announced substantial rises “to generate revenue and reduce the burden on the UK taxpayer”.
Minister for Immigration Damian Green said that fees for skilled workers, or Tier 2 migrants, will increase by 20 per cent to £480, while employer sponsorship licences will shoot up by 46 per cent to £1,500 for large companies, and by 61 per cent to £500 for small companies.
However, Green said that while the decision to increase fee charges was a deliberate strategy choice, the UK Border Agency had limited the majority of visa increases to about 2 per cent.
Green said: “Given the ongoing need to reduce public spending, we believe it is right that we continue to seek to reduce the burden on UK taxpayers of delivering the border and immigration system by asking migrants to make a greater contribution to the funding of the UK Border Agency.
“Some fees are set above the administrative cost of providing the service to generate the revenue which is used to help fund the UK immigration system and which enables others to be set below cost recovery to support wider government objectives. The revenue generated will contribute towards securing the UK’s border and controlling migration for the benefit of the UK.
"It is only fair that those who use and benefit from the immigration system contribute a higher share of the cost of running it.”
But business organisation the CBI criticised the hikes as a “bitter blow” for firms.
“The shock announcement that some work permit charges will rise between 20 and 60 per cent will come as a bitter blow to businesses,” said Neil Carberry, CBI director for employment and skills policy.
“Firms have yet to see the improvements in customer service they were promised, in return for the last tranche of inflation-busting rises last year.”
Fee changes are expected to come into force in April 2012 but must be agreed by both Houses of Parliament first.
Gerwyn Davies, public policy adviser at the CIPD, said: “I think that the changes to sponsorship licences will cause some concern. Employers often use Tier 2 as a last resort because they cannot find suitably skilled and experienced staff from the domestic workforce, so it’s not optional, it’s often a necessity.
“Increases in fees or licences will be a difficult pill for many employers to swallow when they are facing particular cost pressures.
“It also comes at a time when the number of licences being awarded to employers has been lowered. While it’s indisputable that the demand for labour is the main driver behind this, some employers are also saying that the cost and complexity of applying is also deterring them.”
He said that smaller businesses would be hardest hit by the charge increases, particularly in a time of economic uncertainty.
“SMEs had benefited in particular from the Tier 1 route because they didn’t have to get sponsorship and the talent was readily available because people were already in the workforce or at least in the UK.
"Now that tier has been closed off. Tier 2 is much more formulaic, more complex and more costly, which has, and will, deter some SMEs from applying.”