The Government’s immigration white paper (Restoring Control over the Immigration System) is now one week old. However, the implications of the white paper (if everything is actually implemented) will be felt across the United Kingdom for quite some time. After hearing that our immigration system was in chaos and that we are now an “island of strangers”, we were promised a fair and controlled system. So, do the proposals represent a fair immigration system? In my opinion, they do not.
Setting out the obvious – I am an immigration lawyer and so many may read this and suspect that I am biased on this topic. Immigration is a very emotional topic in the United Kingdom. Last time I publicly commented on a Government’s proposal on immigration, I received numerous death threats on LinkedIn and my work inbox filled with venom and hate. We all have opinions about immigration but policy should never be drafted to pander to those opinions. It should be backed by facts, logic and with a clear objective in mind.
Immigration is a political hot potato. It is never the hill that a politician wants to die on – yet they all do.
As hinted in the title of the above article, the new immigration white paper promises a fair and transparent system but it’s actually a political assault on employers, schools and the NHS.
Impact on employers
There are a number of changes proposed around skill levels, salaries and creating a new working group to review what is required for the UK labour market. Those changes in themselves seem reasonable to a certain extent. However, there is one change in the white paper which has caused most immigration practitioners to spit out their coffee.
The Immigration Skills Charge (ISC) is going to increase by 32%. The ISC is a charge paid by the employer whenever they wish to sponsor a foreign national for a work permit. The ISC is paid up front and is calculated according to the size of the sponsoring company and the duration of the visa. A three-year visa would cost a small business £1,092 whilst a large business will pay £3,000.
The ISC was created in 2017 as a levy on employers who bring in foreign talent, with a view that this money would be used by the Home Office and Department of Education to fund training and skills programs in areas of importance. According to the Explanatory Memorandum that accompanied the legislation introducing the ISC, it would “reduce reliance on migrant workers …[and]…increase UK productivity”.
From 2017 to March 2023, the ISC generated £1.5 billion in receipts.
Investigations in mid-2023 highlighted that the Government could not provide any evidence of whether it was using these funds to deal with skill charge gaps. The revenue generated by the ISC was not ringfenced or linked directly to any funding for training. According to the Migration Advisory Committee (who are regularly called upon by the Government to advise on migration matters), the ISC was simply a tax on the use of migrant labour which went to the Treasury.
FE Week submitted Freedom of Information requests asking how much ISC revenue was allocated to the Department for Education’s (DfE) skills budget. The requests went to the DfE, the Home Office and the Treasury. The DfE said that it did not receive a ringfenced budget and suggested that FE Week contact the Home Office. The Home Office suggested that FE Week contact the Treasury. The Treasury then directed FE Week to speak to DfE. And on and on the merry-go-round goes.
With this background, it then came as a surprise to read that employers in the UK were recruiting in a manner that was considered ‘self-serving’ and that they had been under-investing in domestic skills. As remarked by Martin McTague (national chair of the Federation of Small Businesses) in 2023, “86% of small businesses say it is difficult to find individuals with relevant qualifications, skills and experience, raising questions as to whether the ISC is serving its purpose of helping to train domestic workers, as set out in 2017”. For all intents and purposes, it seems that it is not businesses that are failing to invest in domestic skills but the Government. Increasing the ISC by 32% whilst at the same time accusing UK employers of under-investing in domestic skills is a slap in the face with a wet fish.
Impact on schools
In addition to attacking employers for failing to invest in domestic skills, the immigration white paper also attacks schools and universities when it comes to their international student body. Universities will now be required to pay an international student levy, forcing them to “share the benefits” of the estimated £20.65 billion that is generated by overseas students. This is another levy which will be “reinvested into the higher education and skills system”. However, given the Home Office, Treasury and DfE’s inability to ringfence other levies, you have to wonder how this will be approached differently.
This is quite a change in mood music.
Yvette Cooper’s introduction in the white paper accuses educational institutions of pursuing “unlimited expansion of overseas students without proper checks in place”. There is no detail of what the result is of this recruitment “without proper checks” and no analysis of how international students have benefitted the UK economy in terms of spending power and being an agile temporary work force.
Many in the sector have said that a levy would reduce the attractiveness of the UK education system to international students which in turn would reduce the level of income that the university sector is perceived to receive. Analysis by the Home Office indicated that there would be a 20% drop in student applications if there was no graduate route. If there was a student levy of 6% of tuition fees, then it is likely that we would see a similar reduction in student applications which could result in a drop of £4 billion in revenue generated. Universities rely on the income from overseas students to subsidise the domestic students.
In 2024, the Migration Advisory Committee conducted a rapid review of the graduate route and noted “that the Government needs to consider the total impact of a policy change rather than simply its effect on net migration.” This consideration does not appear in the immigration white paper.
Impact on the NHS and social care
The third limb to be attacked under the white paper is the NHS and social care visa. The system was purportedly open to abuse and worker exploitation, with employers failing to do enough to train UK workers. There is a theme developing here…
The ISC could have been funnelled into such training programmes but instead it was placed in the Treasury’s blackhole. A recent investigation found that hundreds of training providers had stopped offering apprenticeships in adult care and some specialist providers had even gone bust. This was partly due to the low funding rates for those apprenticeships but also compounded by chronic workforce shortages. Therefore. the call by the Government to cut the only lifeline that exists for adult care and social care seems as if we are kicking the care sector whilst it is on its knees.
The BBC reports that several care homes will likely close as a result of the proposed immigration changes. This cannot come as a surprise when in 2024, it was estimated that there were over 130,000 vacancies in adult social care.
Closure of the category will increase strain on the NHS and families, almost certainly hitting the UK’s economic productivity as families alter their work commitments and plans in order to help care for elderly relatives or those who are vulnerable. Some may say that migrants should pay more into the NHS system – foreign nationals actually pay into the NHS twice. They do so under their income tax code as well as under the Immigration Healthcare Surcharge which is set at £1,035 per year (and paid in advance). Migrants pay more than their fair share.
Conclusion
All in all, the immigration white paper was a lesson in how to use those who do not have the right to vote as a political football. It promised a fair and proportionate system yet it felt as if everyone else was to blame for the lack of progress in the UK economy. Employers had not done enough. Universities had not done enough. Care homes should do better. But don’t worry, the Government will just increase levies on businesses, double-tax migrants and continue to espouse “island of strangers” rhetoric.
