What could proposed Labour policies mean for Business Immigration?

We look at what we know so far about the Labour government’s plans for immigration law and how they will affect employers.

Over the years, governments have repeatedly pledged to “reduce net migration”, though the effectiveness of some changes introduced over the years has been questionable. The reduction of the skills threshold for Skilled Workers from RQF Level 6 to RQF Level 3, the abolition of the Resident Labour Market Test (advertising roles in a compliant fashion to determine if there is a suitable worker from the local workforce), re-introduction of the Graduate Visa as a successor to the Post Study Worker category etc. are all changes which have increased net migration by simplifying the recruitment of non-Settled Workers.

The new Home Secretary, Yvette Cooper, has made a Written Ministerial Statement on Immigration. The plan is for the new approach to immigration to be “one that links migration policy and visa controls to skills and labour market policies – so immigration is not used as an alternative to training or tackling workforce problems here at home”. The Immigration Skills Charge (£1,000 per year for “large” sponsors) was introduced in 2017 specifically to encourage the investment in training and development of the local (UK) workforce and thereby reducing the reliance on the international workforce. We await further details of the measures planned. 

In terms of some highlights in the statement that may be relevant for businesses:

• The Migration Advisory Committee (MAC) (an independent, non-departmental public body that advises the government on migration issues) has been instructed to review the reliance of key sectors on international recruitment, particularly IT and engineering. A request has been made for the MAC’s review to be carried out within a nine-month timescale so we can expect an update by Spring 2025.
• Whilst some Sponsors may have hoped the new government would re-visit the recent 43% salary increase for new Skilled Workers from £26,200 to £38,700, Labour has confirmed it will continue to implement this as well as the abolishment of the 20% “Going Rate” salary discount for UK workers in shortage occupations, albeit lower salary thresholds will continue to apply to some applicants, for example those applying under the “New Entrant” sub-category.

We will have to wait and see how the new government delivers on its Net Migration pledge. They have not at this time indicated that they will reintroduce the annual Quota or reinstate the higher Skills threshold, RQF 6, for Skilled Worker applications, both of which would reduce net migration. With all that being said, in sectors where roles are highly skilled and remunerated, such as financial services, insurance, etc. recruitment from the international workforce will still be possible.

Realistically, we expect closer relations between the UK and EU under the Labour government and whilst a short to medium return to full Freedom of Movement is unlikely, we could see some reciprocal relaxation of Work Visa requirements. Of itself this would increase Net Migration but would be welcome news for UK employers currently bearing the substantial additional costs associated with the UK employment of EU Nationals.

If you have any queries on recent changes in the Immigration Rules or general Immigration queries, please contact Nisha Gulzar, Jonathan Chaimovic or any other member of the Immigration Team at Clyde & Co LLP.