The Skilled Worker Visa and Shortage Occupation List are affected by the Home Secretary’s announcement.
Described as an attempt to tackle high levels of net-migration, the government have announced changes to various aspects of the immigration system. This includes minimum salary thresholds for the Skilled Worker Visa, reform of the Shortage Occupation List (SOL), and a plan to review the Graduate Route (also known as the Post-Study Work Visa).
This follows latest statistics showing that net migration in the 12 months to June 2023 was 672,000. The ONS pointed to three factors driving the increase: an increase in work visas – especially those coming on health and care visas; those coming to the UK on study visas staying longer than previous cohorts; and students and workers bringing more dependants into the UK with them.
The government announced four key changes:
From next spring, the government will increase the earning threshold for overseas workers by nearly 50% from its current position of £26,200 to £38,700.
This means that unless roles are deemed to be in shortage, or are eligible for another visa route, those paid less than £38,700 will not be eligible for visas. There are outstanding questions about what will happen to existing skilled worker visa holders who are due to renew their visa, but whose salary no longer meets the threshold.
While inflation linked rises might have been expected, this level of increase will do nothing to address the shortages that are currently holding back business investment and growth.
The government will end the 20% going rate salary discount for shortage occupations and replace the SOL with a new Immigration Salary List, which will retain a general threshold discount. The MAC will review the new list against the increased salary thresholds.
The going rate salary discount previously meant that companies could pay workers 20% less than the going rate for jobs on the SOL. This led to both Labour and Conservatives, as well as the Migration Advisory Committee (MAC), arguing that it should end as it allows employers to undercut the wages of UK workers. While we support the decision to ensure confidence in the immigration system, we haven’t seen evidence of it being used in this way – businesses usually turn to the immigration out of necessity above anything else.
The CBI is supportive of general SOL reform but we’re waiting for more details about how the new Immigration Salary list will work in practice.
One of the key unanswered questions is what level the general threshold discount is set at. This is the discount that means that jobs deemed to be in shortage that don’t meet the salary requirement (but do meet skill requirements) are eligible for visas. This was previously set at £20,960 – a 20% discount of the minimum salary threshold.
The CBI is working with the government to determine what the discount will be set at and whether it will remain as 20% of the new threshold. This would mean the new minimum threshold would be £30,960 for shortage occupations.
After publishing the latest SOL review in October, the MAC will now have to conduct another review based on the new salary threshold, and whatever level the salary threshold reduction is set for. It is still unclear whether any jobs currently on the SOL can remain or whether all are to be removed for being too low paid. The CBI’s working assumption at this stage is that jobs will only be eligible for consideration in the future if paid £31k-39k.
You can read more about our proposals to reform the MAC and SOL in the CBI’s Business Manifesto.
The MAC will be asked to review the Graduate visa route to ensure it works in the "best interests of the UK".
While there had been rumours that the Home Secretary may remove the Graduate Route, the CBI is pleased to see it remain. So far there’s no timeline or terms of reference for the review, but it will likely be conducted following the MAC’s review of the new Immigration Salary List. Leading up to and during the review the CBI will be clear that the Graduate route plays a key role in supporting the government’s aims under the international education strategy and any changes should look to reassure prospective international students considering the UK as a destination for their education.
The government will tighten the Health and Care visa by preventing overseas care workers from bringing their dependants to the UK. In addition, care providers in England will now only be able to sponsor migrant workers if they are undertaking activities regulated by the Care Quality Commission.
There is likely to be a secondary impact on businesses as a result of these changes, including further delays in the health and care system that keeps people off work either unwell or because they take on the care responsibility for a family member themselves.
For any questions, feedback or examples of how these changes will affect your business, please get in touch with Katie.
You can see our media reaction to the changes here.
