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Sunak's proposed visa fee hike sparks outcry

The UK government's proposed increase in visa fees for migrant workers is facing criticism from business groups. Rishi Sunak, the British prime minister, had announced plans to raise the levies, stating that it would contribute to funding public sector pay rises.

However, lobby group BusinessLDN's CEO, John Dickie, sent a letter to the prime minister expressing concern about the impact of the proposed changes on UK businesses and the economy. With the current tight labour market, UK work visas are already among the most expensive globally.

The government's plan includes raising the cost of a skilled worker visa for more than three years from £1,235 to £1,480. The annual immigration health surcharge, which funds NHS access for migrants and has been frozen since 2020, would increase by 66% to £1,035.

BusinessLDN argues that when combined with other expenses like the immigration skills charge, bringing in one skilled worker would cost nearly £10,000, even before accounting for costs for dependants. This increase in fees could hinder the country's ability to attract top talent compared to other nations, especially when businesses already face significant skills gaps.

BusinessLDN represents approximately 175 companies, including major UK employers such as Lloyds Bank, Legal & General, J Sainsbury, Unilever, Deloitte, and PwC.

Jonathan Haseldine, policy manager at the British Chambers of Commerce, also expressed concerns about the planned rise in immigration levies. He believes that wage inflation is one of the significant challenges for businesses, especially when they are already grappling with rising interest rates, energy costs, and broader inflationary pressures.

Haseldine called for an expansion of the government's "shortage occupation list" to make it easier for sectors affected by labour shortages to hire from overseas.

Despite some delays in other plans that could impact business costs or fuel inflation, Chancellor Jeremy Hunt is determined to proceed with the new fees for migrant workers.

Hunt stated that these fees are necessary to fund public sector pay rises, aiming to raise £1.4bn over two years from the increased visa fees and annual NHS surcharge.

The Home Office plans to introduce the higher visa charge in the autumn, while the higher health surcharge will come into effect either at the end of this year or in early 2024.

Sunak had previously mentioned that he would not increase taxes to fund public sector pay rises and that funding the increases through higher borrowing would not be responsible.


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