The Immigration White Paper: what it means for business

Earlier this month, the government published its long-anticipated Immigration White Paper. While certain rumoured changes - including the scrapping of the graduate visa and introduction of a net migration cap - were not introduced and will be welcomed by businesses, the White Paper has introduced a sweep of proposals which will make it more difficult for businesses to recruit workers from overseas.

What has been announced?

The White Paper sets out how the government plans to reform different areas of legal and illegal migration. A subset of these proposals include changes which will impact businesses' ability to recruit and sponsor workers and students from overseas. The full copy of the White Paper can be found here.

Examples of key changes include:

Work reforms 

• Skilled Worker Visa thresholds are being increased.
• The skills threshold will rise from RQF 3 (equivalent to an A Level) to RQF 6 (degree-level).
• The Immigration Salary List will be abolished.
• A new Temporary Shortage List will be introduced, providing time-limited access to work visas for occupations that do not meet the skills threshold. Only sectors that are key to the industrial strategy or delivering critical infrastructure will be eligible and they must be recommended by the MAC.
• The MAC will be asked to recommend salary thresholds that make sure that immigration is never a "cheap alternative". It is stated that salary thresholds will increase but not by how much.
• A new Labour Market Evidence Group will be able to recommend that access to visas should be restricted despite meeting all thresholds if sectors are deemed to be over reliant on international workers.
• New requirement for workforce strategies for key sectors where there are high levels of recruitment from abroad will be introduced. It is unclear who will be responsible for writing the strategies, although wording in the White Paper indicates this will involve sector bodies and relevant government departments.
• The Immigration Skills Charge will be increased by 32%, reflecting the rise in inflation since its introduction in 2017. There is still no commitment that funding raised through the ISC will be used to expand support for training.  
• Applications to new social care visas from abroad will be closed. For a transitionary period until 2028, the government will permit visa extensions and in-country switching for those already in the country with working rights, but this will be kept under review. The government says that a Fair Pay Agreement will solve the sector's recruitment challenges but has not committed to any additional funding for local authorities.
• The government will explore how to ensure that employers, using the immigration system, are incentivised to invest in boosting domestic talent, including options to restrict employers sponsoring skilled visas if they are not committed to increasing skills training. We will be pushing for this review to consider the impact of the Apprenticeship Levy on employer levels of training investment, as well as the financial challenges confronting further and higher education providers which impact their ability to scale-up their training offer.
• Reforms will be introduced, allowing a limited pool of UNHCR recognised refugees and displaced people to apply for employment through existing skilled worker routes, where they have the skills to do so. This suggests that restrictions on the right to work for asylum seekers are unchanged.
• A package of reforms aims to improve the Global Talent route. 

Study reforms  

• The graduate route will be shortened to 18 months. No further changes to this route were announced.
• A levy on higher education provider income from international students will be considered. Revenue would be reinvested into skills. Further details are set to be confirmed at the Autumn Budget.
• The government has proposed a package of reforms aimed at tightening up the requirements on study visa sponsors.
• Sponsoring institutions will need to demonstrate that they are considering local labour market impacts of international student recruitment. There is no reference to who would be responsible for carrying out these checks, or the implications of demonstrating poor awareness of potential local impacts for the sponsoring institution would be. 

Dependants 

• The government will increase language requirements for Skilled Workers and introduce a new English language requirement for all adult dependants of workers and students. 

Settlement and citizenship 

• The standard qualifying period for settlement will be increased to 10 years.
• The qualifying period can be reduced based on contributions to the UK economy and society. These criteria will be subject to consultation later this year. 

How will businesses be impacted?

Changes to study and work visa routes will directly impact businesses who currently, or in the future intend to, engage with overseas students and workers. Already, the team has heard that restrictions on visas for below degree-level roles will pose challenges for sectors and businesses across the economy who are battling the effects of labour shortages, and that the 32% increase to the Immigration Skills Charge will drive out the capital businesses have to invest in their workforce and growth potential.

In addition, universities have voiced concern that the planned introduction of a new Levy on university income generated from overseas students could have several unintended consequences, including reducing the number of domestic student places that they can offer, and elevating the risk of redundancy and insolvency for many providers in the sector.

What is the CBI doing?

In response to member concerns about plans to make legal work and study migration routes more restrictive and challenging to engage with, our Chief Executive, Rain Newton-Smith, spoke to The Times to highlight the need for a more nuanced debate on immigration that recognises the benefits a pragmatic policy approach can offer to the UK economy. A copy of the article can be found here.  

The CBI also published a statement reacting to the Prime Minister's Immigration White Paper press conference which can be found on the CBI website. This reiterated many of the messages included in the Times' article. For example, that high visa fees and salary thresholds means it is wrong to claim that businesses see immigration as a 'cheap' or 'easy' alternative to recruiting and training domestic workers, and that making the UK a less attractive place to study will have unintended consequences, such as creating fewer opportunities for young people to access quality degree-level education at home.   

Over the coming days and weeks, the team is looking for member insights to help inform relevant engagements with relevant government departments and officials. The team will also be using existing member meetings, such as the quarterly Future of Work Committee, to help identify top member priorities and key concerns relating to proposals in the White Paper.

How can businesses get involved?

CBI members are invited to share their views on the White Paper proposals and the potential impact on their business. To contribute, please contact Evie Matthews directly.

We're particularly keen to hear your feedback on the following areas:

• Does your organisation currently use the immigration system to recruit overseas workers and if so, how do you anticipate the new work visa proposals will impact your organisation's ability to engage with the immigration system to address its shortages moving forward?​
• Are there any White Paper proposals that your organisation particularly supports or opposes? ​
• Government has said that businesses are relying too much on immigration when they should be investing more in training and supporting people into work, and supporting people to stay in work.
• Do you agree that delivering more training could help your organisation to address its shortages and if so, are there any barriers preventing your organisation from investing in more training?​
• To what extent do you believe that your shortages are driven by a lack of people versus a lack of skills?