Employers hit by recent hikes in salary thresholds for sponsoring skilled workers will be eager to find out if the new Labour government means business about transforming business immigration.

James Cleverly’s tenure as Home Secretary saw minimum salary thresholds for Skilled Worker visas raised and the 20% discount for shortage occupations eliminated, on top of visa fee and immigration health surcharge hikes making the UK one of the most expensive countries to move staff to. The Conservative election manifesto included promises to make UK immigration even more expensive and reduce immigration further, with ever-decreasing annual caps.

A seemingly more pragmatic Labour government should be a relief for HR teams, but what can they actually look forward to over the next few months?

When are changes to work visas likely to happen?

Major immigration changes tend to be implemented in the Spring (or sometimes October). With Labour promising major reviews of the current system, it is unlikely that much will happen before next spring.

More details of Labour’s immigration approach might emerge from the King’s Speech on 17 July. However, the early focus appears to be on addressing the costly asylum backlog with a return to processing cases rather than immediate changes to work and family migration. The latter are likely to follow evidence-based reviews of the immigration system.

In the meantime we would advise HR teams coping with recent salary increases to sponsor staff on Skilled Worker visas to explore categories such as Scale-up visas and New Entrant and PhD discounts to sponsor migrants on lower salaries. They should also look into visas that do not require sponsorship or salary thresholds, such as Global Talent visas, Youth Mobility Schemes and Graduate visas.

How different is a Labour business immigration system likely to be?

While the Conservatives promised ever-tightening annual migration caps, the Labour election manifesto contained a vow to reduce immigration. However, with numbers already descending from a post-pandemic peak, accelerated by the last government’s policies, the new government is free to tinker with the UK’s immigration rules with falling net migration unlikely to rise to the extraordinarily high levels of 2022 and 2023.

Filling skills gaps

The Shortage Occupation List, with its 20% discount to the going rate of pay, is unlikely to return in its previous form, as Labour insisted this undercut local wages. Yet they have acknowledged skills shortages and the pressure to deliver economic growth will mean the government has to address how, at least in the short term, immigration will be used to fill skills gaps.

The Labour’s manifesto promises of “linking immigration and skills policy” and ending “long-term reliance on overseas workers” are sentiments previous governments have expressed. The manifesto gives us more clues to the government’s long-term thinking, though: “Skills England will formally work with the Migration Advisory Committee to make sure training in England accounts for the overall needs of the labour market.”

Will immigration policy be devolved?

Regional demographic pressures and wage disparities present employers with challenges. The current national salary thresholds for sponsoring skilled migrants are much easier on companies paying London wages. While fully separate immigration systems for Scotland, Wales and Northern Ireland are improbable, the Shortage Occupation List and the Immigration Salary List that replaced it allowed discounts specific to particular nations, and a government-commissioned review of the points-based system may explore local solutions for addressing skills shortages.

Youth mobility

The Youth Mobility Scheme and India Young Professionals Scheme are reciprocal visa agreements for people aged 18-30 (or in some cases 35) to live and work for two (sometimes three) years in each other’s countries. While the previous government expanded these agreements and wanted to negotiate more with individual European countries, it refused the EU’s offer of limited youth mobility agreement between the UK and the entire EU.

This would be a pragmatic solution to the hiring challenges many sectors such as the hospitality industry face. It would also open doors for both British and European young people and reverse a post-Brexit immigration trend for much higher levels of non-EU immigration. However, the new Labour leadership which has ruled out any return to pre-Brexit free movement with Europe, has given no indication if it would countenance a Europe-wide youth mobility expansion. While this would be an easy win for stated ambitions to grow the economy, it might be politically difficult for a government determined not to appear to be reversing any elements of Brexit.

Enforcement and compliance

In the run up to the general election, Labour targeted “bad bosses” who they said abuse the visa system or breach employment laws, promising stricter enforcement. Employers who “abuse the visa system” or breach employment law will be barred from hiring workers from abroad, the Labour manifesto adds. However, we do not envisage any major massive changes to sponsor compliance obligations as they already include requirements to ensure that the immigration system is not abused, compliance with wider UK law (including employment and equality law) and not behaving in a manner not conducive to the public good.

Recent increases in civil penalties and compliance visits indicate a trend that the new Labour government may continue. In the first quarter of this year the Home Office suspended 309 Skilled Worker sponsor licences and revoked 210: a much higher level than at any point since Brexit. Employers should ensure robust compliance systems and stay informed of any upcoming changes to Home Office guidance, seeking legal advice and conducting regular audits to maintain their sponsor licences, whatever changes are on the horizon.