New government begins review of legal economic migration

Now the dust has begun to settle following the recent general election, the new Home Secretary has kicked off her review of legal migration to the UK. So, what do we know so far and how might this impact employers?

During the general election, Labour’s plans for legal migration were vague but it was clear they shared the broad political consensus that net migration figures are too high and need tackled. Yvette Cooper (Home Secretary) has now confirmed in a ministerial statement the direction they intend to go in.

• The government wants net migration to come down, whilst recognising the benefit international skills and talent bring to the UK. They are looking to tackle skills shortages in the UK to reduce reliance of international workers. So, we can expect to see the UK’s immigration policies increasing linked to skills and labour market policies.

• Sectors and occupations typically more reliant on international workers, and so which we anticipate being in the spotlight, tend to include construction/engineering, the care sector and IT/digital.

• Employers have been anxiously waiting to see if they would roll back on some of the previous government’s visa changes. At the moment, the previous government’s five-point plan is to be retained (Government 'five-point plan' announced to cut net migration from Spring 2024 - TLT LLP), including the significant salary increases imposed on those seeking skilled worker visas. The only exception to that is there has been a pause on the further salary requirement increases due to come into force for those seeking partner visas, pending further review.

• The Migration Advisory Committee (MAC) is to be strengthened and given a greater role in informing policy. The MAC is an independent non-governmental public body that advises the government on migration issues, to inform immigration policy.

Not wasting any time, on 7 August the Home Secretary formally commissioned the MAC to conduct a review of IT, telecommunications and engineering roles. The MAC has been given 9 months to review such roles and sectors to understand the reasons behind reliance on international recruitment to fill them. Further such MAC reviews are expected in the future, looking at sectors which are high users of international labour (we would expect the care sector to be a key area of focus in due course). We shall wait to see if the historically overlooked hospitality sector is reviewed, to consider whether the UK’s immigration policies could be utilised to support it in the face of ongoing recruitment challenges. There may be low enthusiasm for broadening the roles eligible for sponsored work visas, however, amid a focus on grassroots growth within the domestic labour market.

Within its immediate review, the MAC has been asked to consider:

• The types of roles in shortage;

• The drivers of such shortages (including training, pay and conditions in the sectors);

• How sectors have so far sought to respond and adapt to those shortages (other than recruiting from overseas);

• Any impact being on the previous shortage occupation list had for those roles; and

• The policy levers within the immigration system which could be used to incentivise employers to focus on recruiting from the domestic workforce.

Interestingly, the MAC has been invited to consider a range of options, including the potential pros or cons of a differentiated approach – for example based on region, role or other factors. Previous calls for differing rules for particular sectors or regions have largely been ignored by the former government. It is undoubtedly the case that the skilled worker salary increases introduced earlier this year have hit hardest outside of London and are perhaps out of step with typical local going rates for many roles. Further, the demographic profile varies quite significantly across different regions of the UK, which is likely to impact recruitment needs and shortages. Age old challenges will remain, such as how to police and restrict differing rules to ensure they are not abused, but perhaps this new government will be more open to a more flexible and responsive immigration system, as opposed to blanket rules for all? We must watch this space for further developments.

In the meantime, the tone is clear – employers and sectors as a whole will be expected to tackle skills shortages from grassroots up. However, until such issues are resolved, those lacking the skills needed in the UK may have to consider international recruitment if they can get past the eligibility criteria applicable. Those using sponsor licences must keep a keen eye on their ongoing compliance duties, with a recent run of licence revocations across the UK suggesting increasing focus on such issues. Those choosing to recruit locally despite being licensed, perhaps on the basis of cost and process, must also be careful to navigate discrimination risks arising from such decisions.

The MAC is expected to launch a call for evidence, seeking representations from stakeholders in affected sectors. Employers who typically struggle to fill affected roles should take the opportunity to make their views known, to help the MAC collate evidence and shape its recommendations. Details of such a consultation will be published by the MAC - Migration Advisory Committee - GOV.UK (www.gov.uk).

Our expert business immigration team is on hand for businesses need support on these issues.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2024. Specific advice should be sought for specific cases. For more information see our terms & conditions.