The Minister of State, Home Office (Lord Hanson of Flint) (Lab)

My Lords, these regulations were laid before Parliament on 15 October 2025. The immigration skills charge was introduced in April 2017. Its aim is to incentivise UK-based employers to take a long-term view of investment and training. It is designed to address historic underinvestment in the training of domestic workers by UK employers and to deter some from turning to immigration as a cheaper alternative. The skills charge is currently paid by employers looking to sponsor skilled workers for visas lasting more than six months; it also applies if they wish to extend the employment for a further limited period. Senior and specialist workers also pay the charge unless they are an EU national coming to work in the UK for less than three years. The increase will not prevent service supply by intra-corporate transferees continuing as it does currently, in line with our international trade commitments. The charge, which is paid up front by employers, has raised approximately £2.7 billion since it was introduced. That income is providing financial support to help maintain existing skills budgets across the whole of the United Kingdom, which is important for a range of reasons, including ensuring that immigration is not seen as the sole solution to deal with skills shortages. As education and skills are devolved, the income raised is helping to maintain funding levels for each of the devolved nations; it is distributed between England, Scotland, Wales and Northern Ireland under the Barnett formula. These regulations give effect to a government commitment in the immigration White Paper, published on 12 May, to increase the immigration skills charge by 32%. That is in line with inflation and takes into account the period since the charge was introduced, when no increases have been effected. This will mean that, from 16 December 2025— a few days from now—medium and large employers will need to pay £1,320 per person whom they sponsor per year. There will continue to be a reduced rate for small and charitable organisations of £480 per person per year. As I mentioned, the money raised will continue to support skills programmes across the country. Upskilling workers already here in the UK will also help us fill future jobs in our country. It will reduce the need for businesses and organisations to rely on recruiting international workers. The Government have been clear that the levels of net migration have been too high and must come down. As is currently the case, there will continue to be exemptions from the charge, such as where an employer is seeking to recruit people into PhD-level occupations; where they are recruiting a person who is switching from the student route; or where the person is being recruited for less than six months. These regulations also make a minor update to the list of exempt occupations to reflect the latest occupational codes from the Office for National Statistics. Crucially, they do not add to or remove any occupations that are currently exempt, but, in some cases, they reflect where occupations have been separated from groups. We have set out a comprehensive plan to restore order to our broken immigration system. We must ensure that the system strikes the right balance. The immigration skills charge is designed to ensure that employers contribute to our continued investment in skills. These regulations support the Government’s ambition to reduce overall net migration and to aid our resident workforce in finding high-quality jobs through skills training. I commend them to the Grand Committee and beg to move.