Joan Walmsley writes…Taxing patience and taxing patients

In order to “incentivise employers to think differently about their recruitment and skills decisions and the balance between investing in UK skills and overseas recruitment” (Lord Nash in the Lords on Tuesday) the government has decided to introduce an Immigration Skills Charge, a tax of £1000 per employee, per year, paid in advance by an employer wishing to recruit a skilled worker from outside the European Economic Area.

It does not apply to everyone, of course. Exceptions have been made for a variety of post-graduate scientists (including social and humanities scientists), research and development managers, and higher education teaching professionals.

Two groups that have not been exempted are professionals in health and social care. We know that both of these sectors are heavily dependent upon recruiting professionals from all over the world. We know only too well, from report after report, of the dire financial straits of the NHS: three quarters of NHS trusts are in deficit; nearly every A&E has limped from crisis to crisis this winter; we are short of nurses and retention is awful; hospital doctors’ rosters are unfilled; and GP practices can’t replace retiring doctors. The staff have become the shock-absorber for the NHS.

It is in this climate that the Government has decided to tax health and care employers for every worker from outside the EEA who is on a tier 2 visa. Because it is a tax, the Government does not have to calculate the cost and has chosen not to do so. The British Medical Association (BMA) and the Royal College of Nurses (RCN) have done the government’s sums for it – and it’s over £7m a year. A £7m disincentive to hospitals desperate to recruit staff, who are unable to fill essential posts from within the UK and the EU. £7 m less to spend on front line services. You couldn’t make it up!

And so where will this money go? Into the Consolidated Fund, from where an unspecified amount will go to the Department for Education and the Devolved Administrations to help fill our skills gap. There is only a hint that some of it might find its way to upskill the health workforce – but no guarantee that it will go to training health professionals.

The Government refuses to grant an exemption to health and social care, but seems to believe there is a more acute need for research and development managers. Few, if any, of them will be helping to save lives in hospital or caring for those in need of social care.

The NHS is not a business. Unlike big commercial employers, a hospital cannot pay the tax out of its profits, it will simply increase the deficit. And, of course, the NHS and care employers already put enormous resources into the clinical training of their own workforce, so this is a double charge.

Lord Nash told the House of Lords that the government had not done a formal impact assessment because it didn’t have to. I think they didn’t do so because it would be politically embarrassing.

* Joan Walmsley is a Liberal Democrat member of the House of Lords

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2 Comments

  • Little Jackie Paper 24th Mar '17 - 2:21pm

    [Declaration – I used to work in medical recruitment]

    There is however a big problem with this. For many years there was a very generous (some might say overgenerous) arrangement on immigration for medics. And despite the generous deal we still had posts that weren’t filled and wards in crisis.

    Put another way, there may well be a need for doctors and nurses in unfashionable specialties on the Sunday night round in places that are not salubrious. That is not the same thing as a shortage of doctors and nurses per se.

    If we are going to have schemes to encourage (for example) medical immigration to fill gaps, isn’t it only right that we make sure that the people getting the benefit of the scheme do actually fill the gaps? It was never clear to me in the past that was happening.

    How to do all this is another question – and may well not be entirely liberal. My wife’s brother is a nurse and in his country all state-trained nurses spend the first three years in work doing pretty much what nursing and where the government in that country says.

    So yes – immigration is a valid way to fill gaps. But the aim here is to actually fill gaps because anything else skates close to virtue-signalling.

  • “In order to “incentivise employers to think differently about their recruitment and skills decisions and the balance between investing in UK skills and overseas recruitment” (Lord Nash in the Lords on Tuesday) the government has decided to introduce an Immigration Skills Charge, a tax of £1000 per employee, per year, paid in advance by an employer wishing to recruit a skilled worker from outside the European Economic Area.

    Too low, the charge needs to be significantly higher than the “graduate tax”/student loan repayment ie. the greater of £1000 or 5% of gross salary, to have any real effect, if anything it needs to be a duty set at 25~35% of gross salary, ie. wiping out much of the cost savings accruing to a business of employing non-UK residents. Only then will businesses truly start to think differently; plus HMRC will have an incentive to police these arrangements.

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