Labour’s crackdown on foreign workers could cost the UK economy millions, Sir Keir Starmer has been warned.
Plans to increase the salary threshold for workers seeking to come to Britain, as part of wider changes to bring down immigration numbers, would cost between £520-710m because thousands fewer people would be contributing to the UK economy, an independent watchdog has found.
The Migration Advisory Committee (MAC), which advises the government on immigration, has recommended that the salary threshold for the skilled worker route remain at £41,700.
The warning comes after then-home secretary, Yvette Cooper, commissioned the committee in July to examine salary requirements for foreign workers over fears that people on low pay were undercutting British workers. She insisted that the salary bar “must rise”.
But in its report released on Wednesday, MAC warned ministers that if the threshold was raised to £52,000, and Tory measures to raise salary thresholds for certain occupations were kept in place, then between £520-710m would be wiped off the UK economy.
It said a hike in salary thresholds for some jobs should be reversed, because they were “an inefficient way to reduce net migration”.
Sir Keir unveiled tough new immigration changes in a speech in May, claiming that the number of people entering the country was causing “incalculable damage”.
The crackdown included proposals to ensure that people coming to the UK on skilled worker visas would need degree-level qualifications to apply.
Among the measures announced were a ban on the recruitment of care workers from overseas, increased English language requirements for immigrants and the tightening of access to skilled worker visas.
The MAC has also raised concerns about the “stark” contrast in English proficiency between men and women of certain nationalities in the UK. They warned that 30 per cent of female migrants from Afghanistan, Bangladesh, Turkey and Syria do not speak English well or at all.
Their research concluded that migrants with lower levels of English have worse employment and earnings, and are less engaged in civic life – although local neighbourhood engagement and belonging seem to be unaffected.
Academics also warned that the current status quo of occupation-specific requirements, brought in under the Conservative government in April 2024, was barring some high earners from coming to work in the UK.
Currently, an IT director earning £85,000 a year would not qualify for a visa because this is below the median salary for this type of job, the report warned – whereas a librarian earning £41,700 would be allowed in, as this is higher than the median salary for librarians.
The MAC said this approach “makes little sense” and said it should be scrapped.
Under further radical reforms announced by home secretary Shabana Mahmood, migrants who arrived in the UK from 2021 must have stayed in the UK for at least 10 years to be considered for permanent settlement.
Low-paid employees, such as the hundreds of thousands of workers and dependents who came on health and social care visas in recent years, will have to wait 15 years.
However, migrants can slash the amount of time they need to wait if they are high-earning. Those who earn £125,140 in the three years prior to applying for settlement can reduce the wait to three years, and this is reduced to five years for anyone earning £50,270.
The Independent has previously reported that Labour’s immigration crackdown could leave the UK £4.4bn worse off. A Home Office impact assessment of the sweeping reforms predicted that the UK will likely be £1.2bn worse off over the next five years – with the possibility that the negative financial hit could be as much as £4.4bn.
The best-case scenario was that the UK made £800m through the changes. The assessment considered the move to make it harder for foreign students to stay in Britain, and the English language requirement for those on the skilled worker visa.
Chair of the MAC, Professor Brian Bell, said the skilled worker visa route was “crucial” in “enabling firms to employ migrants who also make positive fiscal contributions to the UK”.
He added: “Salary thresholds are, however, essential to prevent undercutting of the wages of domestic workers and ensure fair pay while maximising fiscal benefits to the UK. However, the government is clear that the use of the immigration system should not be a substitute for training the domestic workforce.”
