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Immigration (Health Charge) (Amendment) Order 2016

Volume 769: debated on Wednesday 2 March 2016

Motion to Consider

Moved by

My Lords, the Committee will be aware that the immigration health charge was introduced in April last year by the Immigration (Health Charge) Order 2015, with the aim of ensuring that temporary migrants make a fair and proportionate contribution to the NHS services available to them in a manner in line with their immigration status. The charge is paid by non-European Economic Area temporary migrants who apply for a visa for more than six months or who apply to extend their stay in the UK, and is set at a competitive level of £200 per annum and at a discounted rate of £150 per annum for students. The charge is refunded where an immigration application is refused, rejected or withdrawn.

The Government estimate that the charge could raise as much as £1.7 billion at present value over 10 years. This represents an important new source of income for the NHS, income that is shared between the NHS in England, Scotland, Wales and Northern Ireland, and spent as they see fit. The charge has already been shown to be highly successful, collecting more than £100 million in its first six months of operation for the NHS.

Those who pay the charge and who are subsequently granted entry clearance or leave to remain receive NHS care in the same way as a permanent resident, subject to the same clinical need and waiting times, as long as their leave is still valid. They pay only charges that a UK resident would also be expected to pay, such as dentistry and prescription charges in England. The exemptions to the charge are listed in Schedule 2 to the Immigration (Health Charge) Order 2015 and include visitors and certain vulnerable groups. Also exempted are nationals of Australia and New Zealand, which leads us to the purpose of today’s debate.

The Immigration (Health Charge) (Amendment) Order removes the exemption from the charge for Australian and New Zealand nationals. It also reduces the amount of the charge for youth mobility scheme applicants from £200 to £150 per annum, in line with students. It also makes a minor and technical change that updates the reference in the 2015 order to the part of the Immigration Rules that relate to visitors. Australian and New Zealand nationals have benefited from a one-year exemption from the charge, and this order ensures that there will be equal treatment for all non-EEA nationals.

The UK, Australia and New Zealand all face the challenges of increasing healthcare costs and the management of migration flows. We regularly discuss these challenges with Australia and New Zealand, and have held consultations with them on the charge since 2013. The Secretary of State for Health confirmed our intention to introduce the charge with his Australian and New Zealand counterparts in December.

We greatly value our close relationships with Australia and New Zealand, and remain committed to strengthening the relations between our countries. For this reason we are retaining the reciprocal healthcare agreements for short-term migrants from Australia and New Zealand coming to the UK for a period of less than six months. These agreements provide that short-term migrants to the UK from Australia and New Zealand are entitled to some NHS treatment free of charge. In turn, this is broadly reciprocated when our citizens go there.

The application of the health charge to nationals of Australia and New Zealand is compatible with the terms of our reciprocal healthcare agreements, as these reciprocal agreements do not apply to the longer-term, temporary migrants who will fall within the scope of the charge.

I will also comment on the application of the health charge to Australian and New Zealand nationals. First, the health charge is set well below the true cost to the NHS of treating temporary migrants. For example, non-EEA temporary workers who are here for more than 12 months have a weighted average cost to the NHS of just over £800 per head per year.

Secondly, Australian and New Zealand migrants who come to the UK for a short stay, including tourists, will not pay the health charge. In 2014, nearly 70% of the total number of Australian and New Zealand nationals who came to the UK came as visitors. This group will continue to benefit from the reciprocal healthcare agreements we hold with these countries, which entitle them to free-of-charge NHS care for health conditions that arise during their stay and which require immediate or prompt attention.

Thirdly, and outside the terms of our reciprocal healthcare agreements, we do not charge Australian and New Zealand nationals for the use of any NHS primary care services such as GP or nurse consultations; nor do we charge for treatment in an accident and emergency department. The NHS also provides free-of-charge care to those with certain infectious diseases and, in England, to victims of certain types of violence.

Fourthly, and in recognition of the UK’s close and important links with Australia and New Zealand, we are reducing the amount of the health charge that applies to the youth mobility scheme from £200 to £150. The youth mobility scheme is a cultural exchange programme which allows young people aged 18 to 30 from participating countries and territories to experience life in the UK for up to two years. This is the category used by more than half of Australian and New Zealand nationals applying to come to the UK for more than six months, who would consequently be liable to pay the health charge. Young people of all nationalities eligible to enter the UK under the youth mobility scheme will benefit from this reduced health charge rate, not just those from Australia and New Zealand.

We place great value on the strong relationships that we have with Australia and New Zealand, but the UK, like New Zealand and Australia, faces the challenges of increasing healthcare costs and managing migration flows. It is therefore right that temporary migrants from these two countries should now contribute to the extensive and high-quality range of NHS services available to them, in line with temporary migrants from all other non-European Economic Area countries. We estimate that the changes set out in the order will result in additional income of £41 million for the NHS in present value over five years, in 2016-17 prices. The Governments of Australia and New Zealand have been fully consulted on the charge and I commend the order to the Committee.

I thank the Minister for his introduction and explanation of the purpose of the order. I suppose that neither of us this evening will have to go through the experience of having to address a packed meeting of the Committee.

The Immigration Act 2014, as the noble Lord said, enabled the Secretary of State to provide by order for an immigration health charge to be applied to those seeking leave to enter or remain in the UK for a limited period. The charge was introduced in April last year through an order. This order now amends that order—the Immigration (Health Charge) Order 2015—by reducing from £200 to £150 the immigration health charge payable by youth mobility scheme applicants and it removes the exemption from the immigration health charge available to nationals of Australia and New Zealand. The changes are intended to take effect from early next month.

As the Minister said, the immigration health charge of £200 annually and £150 for students is payable by non-EEA nationals who enter the UK for more than six months in a temporary capacity or who apply to extend their stay in the UK. Those who pay the charge can access NHS services free of charge to the same extent as UK residents. Nationals from Australia and New Zealand were exempt from paying the charge pending further consideration of reciprocal healthcare arrangements, and it has now been agreed that the immigration health charge should be applied to nationals of Australia and New Zealand to bring them into line with other non-European Economic Area nationals. We will not oppose that amendment to the 2015 order, but I have a couple of points to raise.

First, can the Minister say whether these amendments will have any impact on present charges for healthcare paid, or not having to be paid, by UK citizens in Australia and New Zealand, and, if so, in what way? I raise this point in the context of the Government’s statement in the Commons debate on this order that the Department of Health has entered into discussion with Australia and New Zealand on the scope of reciprocal healthcare agreements.

The Minister referred to the fact that the £200 did not cover the NHS costs incurred in respect of those paying the charge. While we agree with the principle that people should make a fair contribution to the costs, we asked in the Commons debate what proportion of people paying the immigration health charge levy were in fact in work and making a contribution to the NHS through the taxes and national insurance that they pay. For people in this category, what is the net cost of their use of the NHS once their taxes and national insurance payments are taken into account? I do not think that the answer to that question is contained within the Explanatory Memorandum, although I say that with some hesitation, as I cannot say that I have necessarily understood all the figures in that document. That is not a criticism of it, by the way. It would be helpful if the Minister could, either now or subsequently, provide a response to the questions that I have raised.

My Lords, I am very grateful to the noble Lord for indicating his support, as did the Opposition in the other place a couple of days ago. I am also grateful for his questions. The noble Lord asked whether there were any new charges within the reciprocal arrangement as a result of the immigration health charge that has been brought in. The answer is no, to my knowledge. However, as the noble Lord mentioned, the reciprocal health charge is being reviewed partly as a result of this charge. It is not so much a direct causal link, but in negotiating and discussing the immigration health charge with the relevant two countries, it was decided that, in view of the fact that the reciprocal health charge is 30 years old, it would be suitable to look at it again. The Department of Health is currently doing that.

There are charges within the reciprocal health agreement. There are different charges for Australians and New Zealanders here as opposed to UK citizens in Australia and New Zealand. For example, Australia levies a health charge for certain categories of visa applicants, including older migrants applying to become permanent residents. Students are required to have health insurance while in Australia. There is a consultation fee for anyone in New Zealand accessing GP care. These things will be reviewed in the next few months. The Department of Health intends to work with both countries over the next year to clarify those terms.

The noble Lord also asked about the number of migrants who work here, pay taxes here and contribute to the NHS. He also asked, as did the Opposition spokesman in the other place, about the net cost to the NHS once those taxes are taken into account. I do not have the details to hand, but I will write to him with them. However, I point out that, of the Australians and New Zealanders who come here, 70% come as visitors, so the charge does not apply to them anyway. I can tell him that for Australians, in the year to September 2015—this is not the net figure but in terms of those working—22,333 visas were issued, of which 15,284 were work visas, tier 5 or tier 2, which is about 68%. For New Zealanders, it is roughly 69%. There were 8,104 visas issued, of which 5,606 were working visas. This includes the youth mobility scheme, which allows young people to work for up to two years. However, I will look at the figures in detail and write to him.

I think that I have covered most of the questions that the noble Lord asked, and I stress once again that we greatly value our relationships with Australia and New Zealand, which is one reason why we maintain the reciprocal healthcare arrangements. We have no intention of removing them. In fact, they will be the only ones left by the end of the year. On that basis, I commend the orders to the Committee.

Motion agreed.

Committee adjourned at 5.59 pm.