Why studying and working in the UK may get costlier from 2024

By Yash Dubal

Buried deep in an unassuming UK government document is a startling figure that will have an impact on many thousands of Indians. Document HO 0459, otherwise known as Increasing the Immigration Health Surcharge, 2023, has caused quite a stir.

Not only does it provide a rationale for a massive fee hike that most Indians planning on studying and working in the UK after January next year will have to shoulder, it also predicts that many of the tens of thousands of Indians currently in the UK studying or living as dependents of other visa holders will eventually get work permits and stay in Britain.

The 41-page report published on October 6 explains in great detail the implications of a proposal to raise the health surcharge that many migrants are required to pay when they enter the UK to work or study.

The Immigration Health Surcharge (IHS) is a fee which helps fund the UK’s National Health Service (NHS) and allows visa holders to access healthcare while they are in the UK. Tens of thousands of Indians in the UK pay it and will have to pay more when the fee rises in January next year.

Document HO 0459 sets out the rationale for the rise, which is considerable. It will increase from the current £624 per annum to £1035 per annum with reductions for students and their dependents. The analysis in the document argues that the current rate was set in 2020 and that since then healthcare costs have risen for the whole population.

This is not the only rise in fees that migrants face. From 4 October this year, the government in the UK increased the cost of other visa fees, in some cases by as much as 35%. This could lead to a reduction in the number of people who apply for skilled worker visas in the UK as they look elsewhere to countries where fees are lower. This would not be good news for the UK economy which relies on migrant labour to fill high job vacancy rates.

In the UK there is little pushback to the visa fee rises, however. The NHS is a sacred cow that many feel must be protected at all costs and one of the common accusations frequently levelled against migrants by those critical of migration is that they access the health service without paying their fair share into it. This is untrue, but any policy that appears to redress this perceived injustice is unlikely to be scrutinized too much. Hence the proposal to increase the IHS has been accepted with little friction.

Whether the IHS rise will have any significant effect on NHS service provision is debatable. The surcharge generated over £1.7 billion of NHS revenue for the UK in 2022/23, which sounds like a lot of money until you consider the Department’s spending in 2022/23 was £181.7 billion.

These rise in fees will affect most Indians applying to come to the UK to work, study or join family for more than six months or those already in the UK legally seeking to regularise or extend their stay with the exception of certain immigration routes and categories of migrant.

The exemptions from the charge include asylum seekers, victims of human trafficking and stateless individuals. Migrants applying to enter the UK for six months or less do not pay the HIS and those applying for Indefinite Leave to Remain are also exempt as they are deemed resident within the UK and can access NHS treatment on the same basis as UK residents.

While the IHS rise has been mostly welcomed, another part of the report has created controversy.

According to the Home Office number crunchers who compiled the document, the number of ‘in-country’ visas granted to foreign skilled workers is expected to more than double from 204,000 in 2023/24 to 584,000 in 2028/29.

It is thought that the majority of these visas will be granted to international students studying in the country whose studies end and who then elect to switch to other visa routes. The majority of student visas last year were issued to Indian nationals and so this projected rise will mainly be driven by Indians.

The forecast rise in in-country visa grants is in addition to a further 200,000 skilled workers visas granted to applicants coming into the UK in 2028/29, a similar number to the 205,000 in 2023/24. That would mean an overall annual increase in foreign skilled workers from 409,000 to 784,000.

In order to understand why this projection is proving contentious, the figures need to be seen within the context of the current political debate about immigration in the UK.

Net migration is at an all-time high, and the ruling Conservative Party has made it an election promise to reduce numbers of migrants coming to the UK.

Those who advocate for less migration argue that mass migration takes jobs away from native workers, places a strain on the UK’s resources and creates a reliance on cheap foreign labour which stifles investment and keeps wages low.

The forecast within document HO 0459 suggests that no matter what policies the government introduces in order to reduce migration from outside the UK, the number of migrants legally working in the UK will still increase and remain high because thousands are already in the country and can simply switch between visa routes.

One Conservative MP told The Daily Telegraph the figures highlighted a loophole in the system, saying: “Our manifesto committed to reducing net migration, so it is very concerning Home Office officials expect the exact opposite over the next few years, with loopholes in our visa system allowing those who have come to the UK for one reason to stay here for another.

Unless we close these loopholes, the UK will not escape the chronic low productivity rates that result from our dependence on workers from abroad. There is little incentive for employers to train up British young people or invest in technology when work visas are being handed out like sweets.”

Whether the Government has time to do anything about this latest migration embarrassment before the general next year remains to be seen, but it does illustrate there is truth in the British saying that the devil is in the details. Sometimes the most mundane documents can be surprisingly illuminating.

(The author is the Director & a Senior Immigration Associate at A Y & J Solicitors, London, United Kingdom and the views expressed are his own)