Lord Sandhurst (Con)

My Lords, I am grateful to the Minister for introducing these regulations and setting out their purpose. These regulations increase the immigration skills charge, or ISC, for the first time since its introduction eight years ago in 2017, and they align it with inflation. This is a sensible measure, and we are pleased to support it. As has been noted, the ISC raises revenue to support skills funding, and, in the words of the Migration Advisory Committee, it also encourages employers to invest in the development of domestic workers rather than relying on migrant labour. We welcome the Government’s recognition that the charge should reflect the rising cost of living and their continued focus on linking skills, migration and wider labour market policies. By increasing the charge by 32%, it is estimated that the ISC could raise an additional £180 million. This could contribute to funding skills development in priority sectors and, over the medium term, reduce reliance on migration. We also observe that, while this measure is straightforward and proportionate, it is important to consider its impact on businesses. We recognise that the charge is lower for certain sponsors, such as charities and small businesses, which helps to mitigate any disproportionate effect. None the less, we encourage the Government to continue monitoring the balance between supporting skills investment and avoiding undue burdens on employers. We also take the opportunity to underline that the original purpose of the ISC is to support skills development in the United Kingdom. While the income raised is not hypothecated, it does contribute to maintaining the Department for Education’s skills budgets, which, in turn, supports apprenticeships and workforce development. We hope that the Government will continue to ensure that this connection between the charge and skills investment remains robust and effective. In conclusion, we welcome the increase in the immigration skills charge. We recognise its potential to help upskill the domestic workforce and encourage employers to invest in British talent, while also contributing to the broader objective of aligning skills and migration policy.