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Sunak announced that the Immigration Health Surcharge would be hiked from 400 pounds to 624 pounds.
The UK Budget tabled by Indian-origin Finance Minister Rishi Sunak is set to make the cost of long-term visas to Britain higher with a major hike in the compulsory health fee charged on migrants from countries, including India.
Sunak, born in the UK to a general practitioner father and pharmacist mother, announced that the Immigration Health Surcharge (IHS) would be hiked from 400 pounds to 624 pounds.
"Migrants benefit from our NHS (National Health Service). And we all want them to do so – but it's right that what people get out, they also put in," the 39-year-old Chancellor of the Exchequer said in his Budget statement in the House of Commons on Wednesday.
"There is a surcharge already, but it doesn't properly reflect the benefits people receive. So, as we promised in our manifesto, we are increasing the Immigration Health Surcharge to 624 pounds, with a discounted rate for children," he said.
The hike was expected as it was in the December 2019 General Election manifesto of the Boris Johnson-led government, but its timing is now confirmed as this year.
A new discounted rate of 470 pounds has been incorporated for children aged under 18, but the lower rate for international students is also set for a rise -- from 300 pounds to 470 pounds.
The IHS was introduced in April 2015 and from December 2018 it was hiked from 200 pounds to 400 pounds per year.
It is imposed on anyone in the UK on a work, study or family visa for longer than six months in order to raise additional funds for the country's state-funded NHS.
The British Association of Physicians of Indian Origin (BAPIO), the UK's largest representative body for Indian-origin doctors, has been lobbying the UK Home Office for a rethink over the charge as it would have an adverse impact on their attempt to recruit more healthcare professionals from India to meet staff shortages in the NHS.
Indian industry warned that the further hike would mean an added burden on already high visa fees.
"The increase in the health surcharge to 620 pounds will add to the already expensive visa fees for overseas skilled workers.
“This will be an additional burden on Indian businesses operating in the UK," said Baroness Usha Prashar, Chair of the UK Council of the Federation of Indian Chambers of Commerce and Industry (FICCI).
FICCI described the overall Budget as a "balanced and pragmatic" one against the backdrop of the global outbreak of COVID-19.
"Increased investment in R&D (Research and Development) to 22 billion pounds a year and the announcement of 130 million pounds of new funding to extend Startup Loans will give a major boost to innovation and entrepreneurship," Prashar said.
Referring to the Bank of England's decision to cut interest rates, Loknath Mishra, Chair of the Financial Services Committee of FICCI's UK Council and MD and CEO of ICICI Bank UK Plc, said it was a "timely and proportionate response" to the current crisis posed by the coronavirus crisis.
"This announcement will support businesses in these turbulent times to manage their credit flows and better manage their cash flows," he said.
The Bank of England cut its key interest rate by 0.5 per cent to 0.25 per cent on Wednesday, as an emergency measure in response to the outbreak of COVID-19.