Immigration – what can businesses expect from the new government?

Posted: 10/07/2024

The Labour Party has won the 2024 UK election with a large majority, ending 14 years of a Conservative government in which immigration had increasingly become a political football. As ministers bed into their new roles and Yvette Cooper becomes the new Home Secretary (having served as Shadow Home Secretary since 2021, and chair of the Home Affairs Select Committee prior to that), this article looks at what changes to legal migration businesses can expect from the incoming Labour government. Labour has committed to linking immigration and skills policy more closely and placing ‘appropriate restrictions on visas’.

Reducing net migration figures 

Labour’s stated plan for immigration has included reducing net migration, without setting a target. Following the recent changes introduced by the Conservatives, net migration figures have already started to fall. This means that Labour could achieve its aim without bringing in any further drastic immigration rule changes. Caution, however, needs to be exercised if further changes are planned as Labour has committed to kickstarting the economy. To achieve this, the right skills will be needed across all sectors. In the interim, businesses will need assurances that immigration hurdles will not hinder them in hiring to fill their current vacancies. 

Address home grown skills shortages 

While Labour says it will focus on skills growth in the UK to tackle the need for immigration with a cross-department skills strategy, there needs to be a clear plan for investment in skills. Any plan will need to be evidence based with appropriate investment, which will take time. In some sectors such as tech, the experience of those who are experts in new age technologies, such as AI and machine learning, is needed to help the UK remain at the forefront of innovation. 

Reform the points based system 

Whilst in opposition, Labour backed the Conservative government’s most recent changes to the UK’s points based system, which saw the disappearance of many roles from the Shortage Occupation List and the increase in minimum salary thresholds, both of which were introduced without proper sector  consultation.

Labour’s manifesto stated that it will reform the points based system through ‘appropriate restrictions on visas’. No further detail has been provided on these reforms, other than to reduce the dependency on overseas workers, and impose new conditions on employers to draw up ‘skills improvement plans’ to train UK-based workers in sectors applying for high numbers of skilled worker visas. Again, caution needs to be exercised as the majority of businesses sponsor overseas workers due to skills shortages and the need to scale. 

Greater enforcement 

Labour has stated that it plans to increase enforcement activity by strengthening bans preventing 'rogue employers' who breach employment or immigration laws. It is expected that such measures will be designed to tackle worker exploitation and impose visa penalties on those who abuse the immigration system. However, even the most diligent business which holds a sponsor licence can fall foul to compliance issues, which could result in enforcement activity being taken by the Home Office. Sponsors will therefore need to prepare for increased audits and compliance checks. 

Youth Mobility Scheme 

The Youth Mobility Scheme visa is for young adults from participating countries and territories who wish to experience life in the United Kingdom for a period of up to two years (or three years for Australian, Canadian and New Zealand citizens). The route is often used by young people for gaining work experience and is a route used by businesses to fill temporary roles. 

Earlier this year the European Commission laid out proposals to open mobility to millions of 18- to 30-year-olds from the EU and UK, allowing them to work, study and live in respective states for up to four years. The Conservative government swifty rejected the proposals. Labour backed the rejection, as both parties clearly feared that the move would be seen as a form of free movement within the EU. Labour’s manifesto is silent on the Youth Mobility Scheme. 

Given that such a scheme operates with other non-EU countries, businesses would welcome such a scheme for EU nationals, as it could help fill some temporary job vacancies in key sectors, while at the same time allowing British nationals to gain work experience in EU countries. 

Commentary 

Due to Reform’s vote share and the current immigration rhetoric remaining at the forefront of the news, including former PM Sir Tony Blair calling for the introduction of ID cards, it seems that immigration is going to remain at the top of the new government’s agenda. It is hoped that the new government will stick to its evidence-based approach, however, further announcements may be likely in the upcoming King’s speech. 

The UK clearly needs overseas workers to do the jobs that UK nationals are either not able to do, due to not having the right skills, or simply not prepared to do. It is therefore crucial that this new government approaches the topic sensitively, without making decisions that could hinder the ability of UK businesses to meet their hiring needs, and at the same time attracting investors and entrepreneurs to bring their innovative business ideas to the UK. 

Return to news headlines