Labour Government: What does this mean for immigration policy?

We started 2024 with new proposals to reduce net migration to the United Kingdom and April brought policy changes that significantly reformed salary thresholds for employers sponsoring overseas workers. The Labour government’s manifesto on immigration was nebulous to say the least, promising a “fair immigration system” with the same commitment as the previous government, to reduce net migration. What can we really expect for economic migration in the future?

Skilled Workers

While it remains unclear how the Labour government intends to reform the skilled worker route, they do recognise the skilled worker route facilitates access to a global talent pool for UK employers so they do not intend to introduce any formal caps.

However they do promise to introduce appropriate restrictions on work visa to end the reliance on overseas worker with a commitment to upskill and train settled workers. In the short term this will not address the sector specific skills shortage in the UK particularly for sectors such as healthcare. We expect reform of the points based immigration system, once more, with a review of the impact of the skilled worker salary threshold to £38,700 on the horizon but we still need clarity on what reforms will take place, how this will benefit the UK economy and exactly how immigration policy will be implemented moving forward.

Sponsor Licence Compliance

There has been reference by the Labour government to increase penalties for “rogue employers” who fail to comply with the immigration rules and wider employment laws. It is expected there will be a focus on sponsor licence holders and right to work checks with an added proposal to lengthen the period an employer can apply for a sponsor licence, where enforcement action to revoke a sponsor licence has occurred.

It is imperative for employers who hold a sponsor licence to ensure continued compliance of their responsibilities, especially today, where there are more UK businesses who recruit overseas workers than ever. 

UKVI Fees

In addition to salary threshold increases, one of the major restraints for UK employers is the costs associated with sponsoring overseas workers. Last autumn introduced increases to Home Office visa fees and in February 2024 the mandatory immigration health surcharge was significantly increased from £624 to £1,035 per year, making sponsorship much less affordable for employers and employees, particularly for graduates at the early stage of their career.

The Labour government has made no indication of whether costs associated with visas will be kept at their current level or whether we can expect reductions or further uplifts over the next year. It is clear there needs to be a full evaluation of the impact of the recent changes ahead of any plans for further change. We can only remain optimistic that the future of immigration policy will welcome skilled migration to the UK to meet our labour needs, with fair restrictions while ending what is described as a ‘hostile environment’.

Recent policy changes may support the government’s aims to reduce net migration, but it will also continue to exacerbate the skills shortage in sectors such as construction and hospitality. In any event there needs to be a more focused approach rather than applying a blanket policy, that will restrict employers in certain sectors and regions, that the Labour government needs to meticulously consider.