What does the UK Immigration White Paper mean for businesses, families and entrepreneurs?

On 12 May the UK government published its long-awaited white paper, entitled ‘Restoring control over the immigration system’.

This wide-ranging policy paper contains some seismic shifts to the current UK immigration system. However, whilst the significance of some of these changes shouldn’t be underplayed, it could still be some time before all these measures take effect. Many of the changes need to be drafted and presented to Parliament as changes to the Immigration Rules, others require legislation and/or are subject to further consultation. We will continue to monitor developments carefully and will publish further guidance and analysis in due course.

In this article, we explore the proposed policy changes and what they could mean for businesses, families and entrepreneurs. As ever, we are here to help you navigate this complex area, so please do not hesitate to contact a member of the Immigration team should you have any questions or concerns.

What is changing for businesses?

The general theme affecting businesses and employers sponsoring skilled workers is restriction and compliance. There is an emphasis on focusing on the domestic workforce, restricting overseas labour to the highly skilled only and of strict adherence to immigration compliance obligations.

A new Labour Market Evidence Group (LME Group) will be established, comprising of the Industrial Strategy Council, the Department for Work and Pensions, Skills England and the equivalents in the devolved administrations, and the Migration Advisory Committee. It will feed into future decisions on immigration policy and advise on aligning international recruitment with development of skills in the domestic workforce. It will do this through gathering and analysing data on domestic training needs and levels of unemployment and economic inactivity. There will be a particular focus on those sectors and occupations which are key for national industrial strategy and those experiencing labour market difficulties. Sectors with high levels of overseas recruitment will need to produce or update their workforce strategy and employers in those sectors will need to demonstrate their compliance with the strategy.

Conversely, the White Paper proposes a relaxation of the rules about switching sponsors in order to give Skilled Workers more control over who they work for in the UK and to reduce the risk of exploitation. There is the potential for further “responsibility and accountability” for sponsors, but no further details on what that might entail, other than some suggestion of an increased use of penalties or sanctions to incentivise sponsors to demonstrate their compliance. We anticipate this to translate to higher fines for breaking the right to work rules and an increase of the skills levy.

In the shorter term, there are some concrete changes which are likely to have an immediate impact on UK employers:

• The minimum skill level for Skilled Worker visa roles will be raised from RQF 3 to RQF level 6 (graduate level roles), which is the level it was pre-1 December 2020. Salary thresholds will also be increased. This is likely to be one of the first changes to take effect and it means that around 180 occupations currently eligible for sponsorship will be removed.
• The Skilled Worker English language requirement will increase from Level B1 to B2. B2 represents a higher level of proficiency than B1 (an intermediate level), with greater ability to understand and produce complex language and engage in more nuanced and spontaneous communication.
• The Immigration Skills Charge (ISC) will increase by 32%. This is a charge to businesses sponsoring skilled workers and will increase the yearly cost of sponsoring a Skilled Worker from £364 to £480 for small businesses and from £1,000 to £1,320 for larger businesses.
• The Immigration Salary List will be scrapped and rebranded as a ‘Temporary Shortage List’ (TSL). This will allow recruitment for specific, long-term shortage roles below RQF level 6 (RQF levels 3-5) for a specific, but currently undefined, window of time. The Migration Advisory Committee (MAC) will vet inclusion on the list and it will be restricted to sectors which are considered key for industrial strategy or delivering essential infrastructure. There must also be a workforce strategy in place first. Those applying for roles on the Temporary Shortage List will not be able to bring dependants (spouses and children). As an interim measure, while the various processes and procedures are being established, the TSL will contain roles which the MAC has recently deemed shortage occupations.
• The Skilled Worker route will ultimately be closed to care worker applications from overseas. There will be a transition period until 2028 (with that date kept under review) so that those already in the UK in that route can extend or switch in-country.
• The Graduate visa route for students who have studied at university in the UK will be reduced from two years to 18 months.
• Adult dependants of workers and students will have an English language requirement of A1 (basic ability). Currently there is no language requirement for such applicants.
• The standard route to settlement (also known as indefinite leave to remain or permanent residence) for certain visas will increase from five years to ten years. There will be some exemptions, such as family members of British citizens, for whom the qualifying period will remain five years. Other individuals may be able to reduce their qualifying period based on their contribution to the UK economy and society through a new concept of ‘earned settlement’. The general English language proficiency level for settlement applications will increase from B1 to B2.

What do businesses need to think about now?

Clearly, with the ISC increase and higher salary and skill thresholds, sponsoring workers will become more expensive and the range of roles which are eligible for sponsorship will be significantly reduced.

The changes to Skilled Worker should not apply to those who are already in the route before they come into force. So employers currently sponsoring those in roles below RQF level 6 should continue to be able to do so and those employees will be able to extend their visas.

However, it’s not clear yet whether the new 10-year qualifying period for settlement will extend to those already in the UK in relevant visa routes, or whether there will be transitional provisions to accommodate them. The government intends to publish further details on the proposed changes to settlement and citizenship later this year, followed by a public consultation, so we should have more clarity in due course. There is case law which states that retrospective changes to the immigration rules are unlawful, so any attempt by the government to apply the new rule to those already in the affected routes could be open to legal challenge.

Employees on Graduate visas should be recruited for graduate level roles, or able to progress to that level within an 18-month timeframe (or before their Graduate visa expires) if they are to successfully switch to Skilled Worker.

It may also take longer to recruit migrant workers given the new English language requirements, especially where dependant partners also need to achieve a certain level of English language ability before they can apply.

The government’s crackdown on sponsor compliance shows no sign of abating and the importance of compliance will only increase given the potential for further related penalties and sanctions. In addition, the government is planning to expand the right to work check regime to non-standard working arrangements (e.g. contractors and gig economy workers), with a consultation on this in due course. Sponsor licence holders should review their right to work policies and start preparing to undertake right to work checks for self-employed contractors as well as those employed.

More resources may need to be diverted to domestic workforce recruitment, training and upskilling. Engagement with industry representatives and bodies will be essential for employers and businesses to get their voices heard by the government, especially in sectors with chronic skills shortages where access to overseas labour may be crucial. There is some suggestion in the White Paper that in the longer term, the government may further restrict access to the Skilled Worker visa to those occupations where there are long-term shortages, the MAC has advised that it is justified, there are workforce strategies in place and employers can demonstrate their commitment to recruiting from the domestic workforce as well. Employers should not therefore assume that they will always be able to sponsor under the Skilled Worker route, even for roles at RQF level 6 and above.

Although not part of the White Paper, the announcement this week that the UK and EU are committed to a mutual youth mobility (‘experience’) scheme, facilitating time-limited working opportunities without the need for a sponsor, may also prove a much-needed lifeline to some employers facing labour shortages. We look forward to seeing the details of this scheme in due course.

Families

The White Paper contains some significant announcements for family migration, albeit with very little detail at this stage. The government intends to overhaul the current family migration system, which contains several different routes including dependants of British citizens and settled persons, dependants accompanying economic migrants and refugees, and replace it with a new, comprehensive family migration policy covering all UK residents who wish to reunite with family members.

The policy will apparently focus on:

• The genuineness of family relationships
• The appropriate level of English language ability to enable them to integrate effectively into the country
• The extension of minimum financial requirements to other routes (not just family members of British citizens or settled persons)
• Tightened suitability rules with a focus on good character

Importantly, family members of British citizens will be exempt from the new standard ten year qualifying period for settlement and their settlement period will be kept to the current five years. Presumably this will also apply to individuals who have a family visa as the dependant of a settled person (as opposed to a visa as a dependant of someone in a work route who has since settled), since the current immigration rules treat them the same way as British citizens, but this has not been explicitly confirmed yet.

The new family migration policy will also presumably be informed by the Migration Advisory Committee’s report into the minimum income requirement for family visas in the context of the current system, which is due to be published in June 2025.

The government also announced its intention to present new legislation to clarify the rules around Article 8 of the European Convention on Human Rights (the right to respect for family and private life) and how they should apply in different immigration routes. The intention behind this is to reduce the number of circumstances where permission to be in the UK must be granted on this basis, by strengthening the public interest test and introducing more specificity on when/how someone can legitimately claim they have exceptional circumstances.

What do families need to think about now?

The uncertainty caused by the lack of detail accompanying the family migration announcements is understandably causing much distress and anxiety. There are a few things to bear in mind which may provide some reassurance at this stage:

• No actual law has changed as a result of the White Paper. Therefore, those who are making applications in the near future will be subject to the same rules as they are now. Usually, changes to the immigration rules are not retrospective, so we would expect to see transitional provisions in place for those who are already in the UK on a family visa before any changes come in. Those who are thinking of making an application may wish to bring it forward if possible, for personal peace of mind.
• The qualifying settlement period for family members of British citizens should still be five years under the new system, and this will presumably also be the case for dependants of settled persons (including Irish citizens) where they are currently treated the same way as British citizens for the purposes of the immigration rules.
• We would expect to have a reasonable amount of notice of the details of the new system before it actually takes effect. The MAC report on the recommended minimum income requirement for family visas in due out in June, and that should provide some indication of what the financial requirements are likely to be under the new system (although the government is not bound to follow the MAC’s recommendations, in reality it is likely to do so). This should mean that families will have some time to plan accordingly before any new rules come into force.
• Those who may be affected by this change can keep up to date with any proposed consultation by signing up for updates from UK Visas and Immigration when they are published here. They can also contact their local Member of Parliament to inform them how the changes will affect their constituents. When the new rules are published, we can provide advice and guidance on the possible legal options available.

Entrepreneurs

The White Paper contained a number of specific measures designed to increase the UK’s appeal to the ‘very highly skilled’, including the following:

• A review of the Innovator Founder visa route to better enable entrepreneurial graduates at UK universities to use it
• More places for research interns, specifically including those in the field of Artificial Intelligence
• Making the Global Talent route ‘simpler and easier’ for international STEM talent to access
• Expanding the High Potential Individual route, which enables recent graduates from top international universities to work in the UK without a sponsor, by increasing the number of institutions on it
• Doubling the number of workers which can be moved to UK under an UK Expansion Worker licence.

These are all welcome developments, but there is frustratingly little detail about how these aims will be achieved, or when these changes are envisaged.

Overseas businesses looking to establish in the UK should certainly explore the possibility of a UK Expansion Worker licence, especially where the founder or owner of the business envisages moving to the UK to set up the new business, as the Home Office is increasingly resistant to the use of the Skilled Worker route for scenarios it perceives as ‘self-sponsorship’, although that remains an option within the current rules. The UK Expansion Route is document-heavy and requires careful preparation and time to satisfy the detailed technical requirements.

Although not mentioned in the White Paper, there have recently been media reports that the government may introduce a new form of investor visa, potentially aimed at those able to make a significant contribution to key strategic sectors for the UK, such as clean energy, life sciences and AI. Any such route is likely to differ quite substantially from the old Tier 1 Investor route (which closed in 2022) and could require active investment and potentially a proven track record, as opposed to straightforward passive investment. We are monitoring these developments with great interest.

When will these changes take effect?

There is currently little guidance from the government about when the various changes will take effect. Many of those outlined above can be effected by a Statement of Changes to the immigration rules, which can only take place while Parliament is sitting. The government has stated that the first of the reforms will be introduced “in the coming weeks”, suggesting that we can expect to see some changes implemented before Parliament’s summer recess in July. Autumn is also traditionally a time for the Home Office to make substantial changes to the immigration rules, so it is likely that further reforms will be implemented around September and October.

Others, such as the development of workforce strategies for certain sectors or the overhaul of the family migration system, will take longer to develop. And others, including the changes to settlement and citizenship, are subject to public consultation first and will not be brought in immediately. Overall, we would expect most the reforms outlined in the white paper to take effect over the course of the next 12 – 18 months, although these timeframes are of course extremely fluid.

Conclusion

The White Paper is undoubtedly far-reaching and ambitious in its proposals. It remains to be seen how these measures will change the UK immigration landscape, and indeed the detail of many of the most substantial changes has not yet been published. We are constantly monitoring and analysing these developments closely.

We will continue to advise our clients, be they businesses, families or entrepreneurs, on the best options for their unique circumstances, in the context of the immigration rules as they exist at the time, with an eye for placing them in the best possible position for whatever the future may bring.