IMMIGRATION: An Introduction to UK-wide

Introduction  

UK business immigration law is a constantly evolving practice area. Presently, developments within UK immigration law are most impacted by the current government’s priorities, the UK’s exit from the European Union (EU) and the post-COVID-19 pandemic economic environment. This overview will outline current trends impacting on UK business immigration.

Economic Trends 

Labour market demands and skills shortages 

The ongoing global race for talent has proven challenging in the UK. Personnel shortages in critical sectors, including medicine, transport and agriculture, have been rampant since the convergence of pressures from the pandemic and Brexit.

The Shortage Occupation List (SOL) is a document produced by the Home Office, and includes occupations with shortages of skilled domestic labour and for which the government agrees to fill shortages with migrant workers via the immigration system. The SOL has been used to attract critical workers to the UK by decreasing the requisite minimum annual salary to 80% of the going rate and reducing visa application fees for applicants in such occupations. This policy is intended to boost the economy and improve recruitment – however, such policies may soon change.

The Migration Advisory Committee (MAC), an independent public body that advises the government on migration issues, can recommend changes to the SOL. Accordingly, the MAC recommended the abolishment of the SOL in October 2023 as, in its view, it no longer serves the intended economic purpose. The government accordingly commissioned the MAC to conduct a rapid review of the new immigration salary list before undertaking a full review. The MAC welcomed the commission, and is expected to produce its initial report and recommendations by 23 February 2024.

The economic impact of immigration 

According to the Migration Observatory at the University of Oxford, evidence-based research shows that UK-born workers are minimally impacted by migration, with low-wage workers more likely to be negatively impacted and middle-class and highly paid workers more likely to benefit. Empirical research demonstrates that migration does not constitute one of the primary factors shaping low-wage workers’ positions in the domestic labour market and economic circumstances. Nevertheless, the economic impact of immigration remains an often-discussed issue in public life and the media, particularly as the government ramps up efforts to decrease net migration to the UK.

Legal Trends 

Efforts to decrease net migration 

The Home Office has announced significant new measures to reduce legal migration to the UK. This announcement comes in the wake of the Office for National Statistics revising its estimate of net migration in 2022 up to 745,000, resulting in significant political pressure on the Conservative Government to achieve its pledge to reduce migration.

The UK Home Secretary, James Cleverly, has announced these changes in the format of a five-point plan for legal migration, promising to reduce net migration figures by approximately 300,000 people by way of targeted alterations to the following immigration routes and provisions:

i) Skilled Worker route – increasing salary thresholds to GBP38,700 and removal of Shortage Occupation List (SOL) going rate discounts by way of a MAC review for the creation of a new Immigration Salary List;

ii) Family route – increasing the Minimum Income Requirement (MIR) to GBP29,000 and, later, to GBP38,700;

iii) Health and Care Worker route – restrictions preventing care workers and senior care workers from bringing dependants to the UK; and

iv) Graduate route – Migration Advisory Committee (MAC) review of the Graduate route to “prevent abuse”.

Additionally, the government has taken steps to deter immigration and raise income for the Home Office through increases in application fees and the Immigration Health Surcharge (IHS) fee. Application fee increases of between 15% and 20% were enacted from 4 October 2024, and IHS fees will increase as follows per year of immigration permission at the point of application from 6 February 2024:

i) from GBP624 per year to GBP1,035 per year – for most applicants; and

ii) from GBP470 per year to GBP776 per year – for students and their dependants, Youth Mobility Scheme applicants and children.

Digitalisation of the immigration system 

As part of the government’s priority to strengthen border security and simplify application processes, a number of legal and operational changes are to be implemented by 2025.

The Electronic Travel Authorisations (ETA) scheme began with selected Gulf nationalities in November 2023. This initiative will require non-visa national travellers – those who do not need to apply for prior permission from the Home Office to enter the UK as visitors – who wish to visit or transit through the UK to request and be granted electronic permission. The government indicates that more countries will be added to the scheme later, with the expectation that the scheme will eventually apply to all non-visa nationals.

By the end of 2024, the Home Office intends to entirely shift to a digital immigration status system with the ability to apply, prove identity, receive immigration status and cross the border without needing a physical travel vignette or Biometric Residence Permit (BRP). Some migrants have begun to receive digital status as a default, such as EU migrants under the EU Settlement Scheme (EUSS), and all BRPs are set to expire by 31 December 2024 in anticipation of such changes. Potential challenges could arise with right-to-work checks through this “digital by default” scheme, as most migrants will no longer have a physical immigration document as a back-up.

Increased emphasis on sponsorship compliance and reduction of illegal working

Following a pause in Home Office sponsor compliance visits amidst COVID-19 pandemic restrictions, the Home Office has resumed sponsor visits before and after licences are issued. These visits may be announced or unannounced, and sponsors must allow access to Home Office officials. As licensed sponsors, businesses must co-operate should an on-site audit or enforcement visit occur.

To bolster these efforts, the government introduced a significant increase in civil penalty fines for firms employing workers without the right to work in the UK.

i) first breach per employee – from GBP15,000 to GBP45,000; and

ii) repeat breaches (on separate occasions) per employee – from GBP20,000 to GBP60,000.

These penalties will be effective as of 13 February 2024. Representatives from the SME business community have expressed concerns regarding such significant increases in illegal working penalties, as such large increases represent a threat to the viability of their businesses.

Political Trends 

Brexit and the impact on immigration policy 

The end of EU free movement following 31 December 2020 has significantly impacted UK immigration policy and political trends. The EU Settlement Scheme (EUSS) has provided a mechanism by which EU nationals and their family members can stay in the UK on the basis of their pre-Brexit UK residence. The Scheme closed for most new applications in June 2021 (although late applications are permitted under certain conditions) and recent restrictions as of 9 August 2023 entail that EU nationals can only apply to the scheme if there are reasonable grounds for late submission – significantly restricting those who can return to the UK.

The lack of new EU national labour and COVID-19 global travel restrictions has marked a paradigm shift towards focusing on non-European immigration. Schemes such as the Indian Young Professionals Scheme, Graduate route, High Potential Individual route, Scale-up Worker route and Innovator Founder route demonstrate a preference towards attracting and retaining highly skilled and early-career migrants post-Brexit – similar to demographics under EU free movement. The scope of the Youth Mobility Scheme has expanded to include new countries, such as Andorra and Uruguay, and the age range and length of immigration will broaden for various nationalities from 31 January 2024. Whilst the government has taken proactive steps towards attracting such applicants, countries including Canada, Australia and the United Arab Emirates compete with their generous and attractive migration routes.

Immigration practitioners have called on the government to introduce more unsponsored routes to attract exceptional talent to the UK, which the Home Office is considering. Hybrid routes such as the Scale-up Worker visa could offer a mid-way alternative to appease applicants and government ministers.

Shifting policies and priorities  

The Home Office has seen six Home Secretaries since 2018, with differing priorities and policy positions on migration – current Home Secretary James Cleverly most recently assumed the post on 13 November 2023. Nevertheless, the government’s political direction stands at odds with criticism that post-Brexit immigration laws have caused critical labour shortages in the UK as net migration figures continue to increase.

The upcoming 2024 General Election will determine whether the current direction of the government’s migration priorities aligns with public opinion or whether further changes to UK immigration law and policy can be expected in the coming years.

Conclusion 

The landscape of UK business immigration law is undergoing a significant transformation, driven by a nexus of economic, legal and political forces. The intertwined challenges of the ongoing global race for talent, exacerbated by post-pandemic pressures and the ramifications of Brexit, have underscored the critical importance of adapting UK immigration policies to meet evolving needs.

In this turbulent climate, businesses in the UK should stay abreast of changes to ensure compliance with sponsor duties and engage professional assistance for creative and strategic immigration solutions.