Labour crackdown on foreign workers could hit UK economy by £710m, Starmer warned
Sir Keir Starmer has warned that Labour’s crackdown on foreign workers could cost the UK economy millions.
Plans to increase the pay threshold for workers wanting to come to the UK as part of wider changes to reduce immigration will cost between £520-710 million because thousands of fewer people will contribute to the UK economy, an independent watchdog has found.
The Immigration Advisory Committee (MAC), which advises the Government on immigration, has recommended that the salary threshold for the skilled worker route remains at £41,700.
The warning came after then home secretary Yvette Cooper appointed the committee in July to examine pay requirements for foreign workers over concerns that low-earners were undermining British workers. He insisted the pay bar “must go up.”
But in its report published on Wednesday, the MAC warned ministers that £520-710 million would be wiped from the UK economy if the threshold is raised to £52,000 and Conservative Party measures to increase salary thresholds for certain occupations continue.
He said the increase in salary thresholds for some jobs should be reversed because it was “an inefficient way of reducing net migration”.
Sir Keir announced tough new changes to immigration in a speech in May, claiming the number of people entering the country was causing “incalculable damage”.
This edition included proposals to ensure that people coming to the UK on a skilled worker visa would need degree-level qualifications to apply.
The announced measures included banning the recruitment of care workers from abroad, increasing the English language requirement for immigrants and tightening access to skilled worker visas.
The MAC also expressed concern about the “stark” difference in English proficiency between men and women of certain nationalities in the UK. They warned that 30 per cent of female immigrants from Afghanistan, Bangladesh, Türkiye and Syria do not speak English very well or at all.
Their research concluded that immigrants with lower levels of English had worse employment and earnings and were less likely to participate in civic life; however, local neighborhood participation and belonging appear unaffected.
Academics have also warned that the current status quo of job-specific requirements, introduced in April 2024 under the Conservative government, is preventing some high-income earners from coming to work in the UK.
The report warned that an IT manager currently earning £85,000 a year would not qualify for a visa because this is below the average salary for this type of job; But he warned that a librarian earning £41,700 would be allowed in because it was higher than the average salary for librarians.
MAC said this approach “makes little sense” and should be scrapped.
Under more radical reforms announced by Home Secretary Shabana Mahmood, immigrants arriving in the UK from 2021 must have stayed in the UK for at least 10 years to be considered for permanent settlement.
Low-paid workers, such as the hundreds of thousands of workers and their dependents who have arrived on health and social care visas in recent years, will have to wait 15 years.
However, if immigrants are high earners, they can shorten the time they have to wait. Those who earned £125,140 in the three years before applying for settlement can reduce the waiting period to three years, and for anyone earning £50,270 it can be reduced to five years.
Independent It has previously reported that Labour’s crackdown on immigrants could leave Britain £4.4bn worse off. The Home Office’s impact assessment of sweeping reforms predicts the UK will likely be £1.2bn worse off over the next five years; There is a possibility that the negative financial hit could be as much as £4.4 billion.
The best-case scenario was that England would gain £800 million from these changes. The assessment took into account the move to make it harder for foreign students to stay in Britain and the English language requirement for those on skilled worker visas.
MAC President Professor Brian Bell said the skilled worker visa pathway was “crucial” to “enabling firms to employ immigrants who make a positive financial contribution to the UK”.
He added: “But pay thresholds are vital to prevent domestic workers’ wages from being undercut and to ensure fair wages while maximizing financial benefits to the UK. But the government is clear that using the immigration system should not replace the training of the domestic workforce.”
