A recent report proposes that the Welsh Government cover specific expenses for immigrants, aiming to encourage their settlement in Wales and address the skills gap in the region.
Published by Cardiff University’s Wales Governance Centre, the report thoroughly analyzes migration patterns of skilled workers in Wales and urges the Welsh Government to entice highly skilled professionals and their families to remain in Wales by considering reimbursements for the Immigration Health Surcharge (IHS).
The IHS, imposed on immigrants entering the UK, has undergone multiple increases above inflation since its introduction in 2015, currently set at £1,035 for most applicants. The funds collected are channeled to the NHS, amounting to 0.4% of the Welsh NHS budget in 2022-23.
With 37 occupation codes listed on the UK’s post-Brexit skills shortage inventory, the report highlights Wales having the highest vacancy rate in crucial sectors compared to other UK nations, with 25% of positions remaining unfilled.
Emphasising that 215,429 individuals born overseas have made Wales their home, contributing to the economy and shaping future demographics in a nation facing an aging population, the report notes that newcomers to Wales primarily belong to the 20-44 age group, possess higher education levels, and tend to have more children compared to the UK-born population.
However, since immigration isn’t devolved, influencing this domain poses challenges for decision-makers in Cardiff Bay. Nonetheless, there are devolved responsibilities pertinent to this policy area, including crafting economic policies that intricately address immigration, skill shortages, and the aging population.
Following the pandemic, care workers and their dependents have been excluded from the Immigration Health Surcharge (IHS). Nonetheless, the report contends that due to the conclusion of EU freedom of movement, the significant number of GPs nearing retirement, and the global scarcity of healthcare workers, this exemption would have become necessary regardless.
The report proposes that the Welsh Government contemplate alleviating skills shortages and addressing demographic aging by repurposing funds generated from the IHS through refunding surcharge payments for applicants. Dr. Larissa Peixoto Gomes, the lead author of the report, remarked, “Rebating the IHS could cost the equivalent of 0.4% of the Welsh NHS budget. In the context of the overall Welsh budget the amount of money to be rebated would be small, but incentivising more skilled migration into Wales would help the future health of the Welsh tax base and the sustainability of public services.
“The report demonstrates that highly skilled migration is filling skills gaps in the Welsh economy, but that vacancies on the UK Government’s skills shortage list remain very high. Rebating the IHS has not been considered to date, but deserves further exploration as a policy option. Wales has the potential to be an attractive home to many workers and families, and this could show goodwill from Welsh Government in removing another financial obstacle from foreign-born taxpayers who want to contribute to Wales”.