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UK Immigration and Labour Market Reform 2025: What the White Paper Means for Employers & Sponsors

Written by Thal Vasishta | May 13, 2025 5:33:01 PM

 

The Government’s Key Drivers        

  1. Record High Net Migration

  • Net migration peaked at +906,000 in June 2023, four times the 2019 level, and stood at +728,000 in June 2024.

  • Historically, net migration ranged from 200,000 to 300,000 (2010–2019).

  1. Key Drivers of Increased Migration

  • Rise in non-EU migrants for work, study, and humanitarian reasons (e.g., Ukraine, Hong Kong).

  • Policy changes post-Brexit reduced skill and salary thresholds, increasing migration below degree level (RQF 3).

  • Expansion of the Health & Care visa route and increase in international students, especially to lower-ranked institutions.

  • Surge in dependants:

    • Health & Care visas: 55% issued to dependants (2021–23), rising to 75% in 2024.

    • Study visas: dependants rose from 5% in 2019 to 20% in 2023, now back to 5%.

  1. Increased Stay Rates

  • More migrants (especially students and workers) are remaining in the UK longer, contributing to persistently high net migration.

  1. Illegal Migration and Asylum

  • From 2018–2024, 220,000 irregular arrivals, mostly small boat crossings.

  • Additional asylum claims from people entering legally via other visa routes (e.g., 40,000 in 2024).

  1. Economic and Social Impact

  • Migration has outpaced housing supply, increased pressure on public services, and impacted social cohesion.

  • GDP per capita has declined every quarter since 2022; as of Q2 2024, it's 0.6% below pre-COVID levels.

  • Migrant-heavy sectors (e.g., hospitality, care) have seen UK employment decline.

  1. Skills and Workforce Gaps

  • Decline in UK-based training and apprenticeships (e.g., engineering apprenticeships fell by 30% from 2021 to 2025).

  • Employers relied on low-wage foreign labour, often at the expense of investing in domestic skills.

  • Noted exploitation in care sector and legal breaches.

  1. Government's New Strategy

  • Aims to reduce net migration further and re-balance the immigration system by:

    • Raising the skill threshold for visas (from RQF 3 back towards RQF 6).

    • Limiting the Shortage Occupation List and making it temporary.

    • Closing the social care visa route.

    • Restricting and raising income thresholds for dependants.

    • Tightening English language requirements.

    • Extend qualifying period for settlement and citizenship (exceptions will apply – see below).

  1. Reform Objectives

  • Align immigration with training, skills development, and industrial strategy.

  • Require workforce plans and employer commitments to training.

  • Create a Labour Market Evidence Group to coordinate data and policy.

  • Establish Skills England to drive national and devolved coordination.

  1. Long-Term Goals

  • Reduce reliance on foreign labour.

  • Boost domestic participation, especially among youth and economically inactive people.

  • Shift growth from labour market expansion to productivity and skills-based growth.