Considerations for Stakeholders Following the Five-Point Plan: A Case of Stopping the Blues and Reviving the Jazz in UK Immigration

This blog covers the recent policy statements shared by the UK government aimed at reducing net migration and shares insights on why they should not necessarily dampen the ambition of stakeholders to push for changes that would improve access to and utility of the immigration system to enhance business activity.  

Setting the stage

The UK's Home Secretary recently unveiled a 'five-point plan' slated for implementation in the spring of 2024, presented as the government’s response to record net migration figures, which stood at 672,000 for the year to June 2023.

Aimed at reducing the net migration figure, the plan includes increasing the minimum general salary thresholds under the Skilled Worker visa route by nearly 48% (from the current £26,200) to £38,700 and removing the 20% ‘going rate’ discount; raising the earnings requirement for those seeking entry under family routes by more than 100% (from the current £18,600) also to £38,700; and prohibiting the entry of dependents of care workers. The government estimates such a plan will reduce net migration by 300,000.

The plan stirred immediate concerns about exacerbating shortages and de-liberalising the post-Brexit system, seemingly indifferent to business needs amidst the political heat pre-election created by migration numbers.

Yet, upon deeper scrutiny and considering the broader immigration landscape, a more nuanced and optimistic view emerges. Understanding these nuances is crucial to avoid overlooking the positives and considering next steps for stakeholders.

Insights on stakeholder impact: Music plays once more

First, most elements of the plan align with the recommendations made by the independent Migration Advisory Committee (the MAC): in 2020, it said salary thresholds should be revised annually in line with ASHE data; and in its recent review of the Shortage Occupation List, recommended that salaries should not undercut domestic labour and low salaries risked abuse and exploitation.

The MAC has also consistently commended ‘wage ambition,’ which is suppressed by importing less costly domestic labour. The drastic threshold increase appears to be an overdue alignment rather than a solely political move. The MAC’s recommendations are unimpeachable.

Distinctly, it seems that guaranteeing a higher general wage (and the £38,7000 is above the median salary of £35,000 for full-time workers in the UK) would make the UK more appealing amidst the intense global competition for talent due to the ubiquity of demographic challenges.

Second, as the Migration Observatory has noted with regard to the composition of 208,000 skilled worker grants for the year ending September 2023, the increase in thresholds will not affect most skilled worker applicants—50% were care workers exempt from the rise, 20% have salaries set by national scales, and the remaining 30% mostly earn above the new threshold. Current exemptions for certain groups, if carried over, further mitigate the impact. The prohibition on the dependents of care workers is unlikely to bear upon those dependents already in the UK, and, going forward, will not materially impact the supply of overseas care workers to compromise the operation of the sector.  

This is not to discount the very real impact on many other businesses—especially in the hospitality sector—of the proposed salary increases. However, we await crucial operational specifics of 'the plan', such as transitional arrangements and qualifications. Such details may not be finalised until the MAC concludes two further Commissions proposed under the plan concerning the Graduate visa route and the new 'Immigration Salary List' (the new iteration of the Shortage Occupation List), inclusion on which will still attract a 20% discount on the general threshold.

Third, user feedback will be pivotal in shaping system terms, previously discussed in this blog. The establishment of the ‘Immigration Salary List,’ another recommendation made by the MAC and the proposed commission to review how it will operate, is a further opportunity for businesses in important sectors falling within cohorts impacted by the rise in salary thresholds to make their case for qualified treatment.  

Although the opposition Labour Party did not take issue with the plan so far as it went - it focused instead on blaming the government for the circumstances that created the ‘need’ for it – it is likely to object strongly to the sharp rise in family visa income thresholds. This aspect of the plan deviates from MAC advice and the level set is inexplicable against the rationale of the £18,600 threshold, initially aimed at limiting access to public funds. Notably, this aspect affects spouses of British citizens and settled individuals—voters whose voices carry weight, particularly in an election year.

Fourth, the UK immigration system is expensive and will be even more expensive next year—a factor highlighted in this previous blog that can empower businesses to speak up and make the case for their needs.

When announcing the plan, the Home Secretary referenced the importance of the contribution of migrants and specifically the benefit of immigration to fund key public services, repeating the point when the immigration fee increases were first announced. It is also to be noted the Office for Budget Responsibility (OBR) indicated that increased net immigration post-Brexit could have a more substantial impact on the UK's economic growth than Chancellor Hunt's proposed Autumn Statement announcements.

Finally, there is tangible evidence that the government will be sensibly listening to stakeholder concerns going forward. It very recently divided the management of the immigration system between two ministers: one tasked to manage policy delivery in respect of irregular migration, the other exclusively in respect of regular migration. This translates to an environment where the views of regular migration stakeholders are heard with proper and exclusive focus.

Looking ahead

The government has already evidenced that it can listen and deliver on business needs, conscious that it needs to mitigate apparent restrictions. In the very same week dominated by the plan to reduce net migration, the government announced rule changes that widened the scope of allowable activity by those entering the UK as visitors, massively increased the Youth Mobility scheme programmes and definitively confirmed rights to remote working.

These are very important updates that add to the armoury of options available to businesses across sectors in constituting their UK immigration programmes, especially those who will be impacted by the salary threshold hikes.

Ultimately, the UK migration system remains at-the-ready for further shaping, with users legitimately empowered to shape it, and being asked to do so: the Home Secretary’s plan can be seen as an invitation, not a rejection letter.

Need to know more?

For further information on how Fragomen can help individual sectors engage with the UK government or otherwise review migration programmes to navigate changes, please contact Senior Manager Shuyeb Muquit at [email protected].

This blog was published on 14 December 2023, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please subscribe to our alerts and follow us on LinkedIn, X, Facebook and Instagram.