UK immigration changes employers and families can expect from the new Labour government

21 August 2024

Employers hit by recent hikes in salary thresholds for sponsoring workers will be eager to find out what the new Labour government holds in store for them. – As will those settled in the UK who now face higher salary thresholds to bring a non-resident spouse or partner to the UK.

James Cleverly’s tenure as Home Secretary saw minimum salary thresholds for Skilled Worker visas raised and the 20% discount for shortage occupations eliminated, on top of visa fee and immigration health surcharge hikes making the UK one of the most expensive countries to move staff to. The minimum income requirement for British and resident people to sponsor a partner on a family visa leapt up too, with more increases promised.

The Conservative election manifesto included promises to make UK immigration even more expensive and reduce immigration further, with ever-decreasing annual caps.

A seemingly more pragmatic Labour government should be a relief for employers, but their election manifesto contained a clear promise to bring UK net migration down from a recent post-pandemic spike. So, what changes can we expect over the next few months?

Keeping the last government’s changes

Home Secretary Yvette Cooper has delivered a statement to the House of Commons which promised to keep most of the last government’s five-point plan to reduce UK immigration.

The last government restricted the ability of staff sponsored on care worker and senior care worker visas to bring dependants with them and required all care providers sponsoring immigrant staff to register with the Care Quality Commission.

The other main measures were raising the general salary threshold those arriving on skilled worker visas must be paid by 48% from £26,200 gross to £38,700 per year. On top of that the minimum hourly rate rose from £10.75 to £15.88 per hour and crucially, the minimum going rate for skilled worker occupations rose sharply. Since April it is now based on the median wage for an occupation, rather than a minimum fixed just above the bottom 25%. The Shortage Occupation List for employers filling UK skills shortages was abolished too, along with its 20% discount to the minimum going rate sponsors must pay.

The new Home Secretary told parliament the Labour government is not planning to change such Conservative immigration measures.

Employers still have a few categories of skilled worker that they can sponsor on lower salaries. These include new entrants, hires with relevant PhD’s and health and care workers. There are also other alternatives to the skilled worker visa that may work out more cost effective, such as the Scale Up visa, Global Talent visas, High Potential Individual and Global Business Mobility visas.

Family visas

The minimum income requirement for British and resident people to sponsor a partner on a family visa leapt up under the previous government from £18,600 to £29,000 for applications made on or after 11 April 2024. The previous Home Secretary James Cleverly announced a further rise to take place this Autumn to £34,500 and then up to at least £38,700 in Spring 2025. £38,700 would put the minimum income threshold out of reach of 70% of British workers so the new Home Secretary has announced that the level will now remain at £29,000 while the Migration Advisory Committee (MAC) reviews the financial requirements in the family immigration rules.

IT and engineering roles review

The UK’s new Home Secretary has also tasked the MAC with reviewing employers’ reliance on international recruitment for engineering, IT and telecommunications roles. The independent expert committee’s report is due in nine months’ time to allow for stakeholder input. We would advise affected sectors to contribute to the expected call for evidence.

This is expected to be the first of a number of reviews by the MAC on different sectors that rely massively on work immigration for new hires.

The new Labour government’s focus on reducing migration is evident in Home Secretary Yvette Cooper’s letter commissioning the review. She writes that the UK has become very reliant on international recruitment to source information technology, telecommunications and engineering professionals and asks the committee to investigate why and suggest solutions.

Skills shortages

The previous government replaced the Shortage Occupation List (SOL) with an Immigration Salary List (ISL) last April, removing the 20% discount on the going rate of pay that must be paid to sponsor immigrants to the UK for shortage roles on the list. At the same time the minimum going rates for different professions were raised as well as the general salary threshold to sponsor a skilled worker.

The ISL will still allow employers to pay lower application fees and a lower general salary threshold – £30,960 instead of the new minimum general salary threshold of £38,700 for most new Skilled Worker visas. However, as there is no longer a 20% discount on the going rates of pay for the shortage occupations on the list, very few shortage roles are left on the new list, as most pay above £38,700.

So, for example, there is a current shortage of programmers and software developers in the UK. Up to April as they were on the SOL, they could be sponsored on a skilled worker visa on a £27,200 salary (based on a 37.5 hour week). Since 4 April, they must be paid a minimum of the new higher going rate for that occupation code of £49,400 (based on a 37.5-hour week). As this figure is higher than the new £38,700 general skilled worker salary threshold, there is no point in this occupation being on the new ISL – which now includes a vanishingly small list of shortage roles that pay under that amount. This is why Yvette Cooper has asked the MAC to examine what is the point of the ISL “in its current form.”

Skills England

King Charles unveiled a “Skills England Bill” in his King’s Speech introducing the main primary legislation agenda for Labour’s first session in power after a 14-year hiatus. Skills England, Labour’s general election manifesto explained, will be a new body which would “formally work with the Migration Advisory Committee to make sure training in England accounts for the overall needs of the labour market.” The manifesto promised “linking immigration and skills policy” and ending “long-term reliance on overseas workers.” How this would work in practice remains to be seen, but Labour’s election manifesto promise to “reform the points-based immigration system” is unlikely to entail any major changes for the duration of their first session of parliament over the next 11 months.

The MAC will collaborate with the new Skills England body, the Industrial Strategy Council, and the Department of Work and Pensions in the above-mentioned tech jobs immigration review as well as future reviews of skills shortages. We expect that sectors affected will be able to contribute to calls for evidence.

Regional differences

The Home Secretary has also asked the MAC to explore regional immigration approaches in its new review.

The current national salary thresholds for sponsoring skilled migrants are much easier to meet for companies paying London wages. While fully devolved independent immigration systems for Scotland, Wales and Northern Ireland are improbable, it is interesting to note that the new Home Secretary is open to considering MAC recommendations on regional differences for work immigration to ease skills shortages, as this is something the previous government rejected.

Enforcement and compliance

In the run up to the general election, Labour talked of “bad bosses” who they said abuse the visa system or breach employment laws, promising stricter enforcement. Employers who “abuse the visa system” will be barred from hiring workers from abroad, the Labour manifesto said. However, we do not envisage any major massive changes to sponsor compliance obligations as they already include requirements to ensure that the immigration system is not abused, compliance with wider UK law (including employment and equality law) and not behaving in a manner not conducive to the public good.

Recent increases in civil penalties and compliance visits indicate a trend that the new Labour government may continue. In the first quarter of this year the Home Office suspended 309 Skilled Worker sponsor licences and revoked 210: a much higher level than at any point since Brexit. Employers should ensure robust compliance systems and stay informed of any upcoming changes to Home Office guidance, seeking legal advice and conducting regular audits to maintain their sponsor licences, whatever changes are on the horizon. Please do not hesitate to contact us if you would like any assistance.