How will the 2024 general election affect corporate immigration?

On 22 May 2024, Rishi Sunak announced a general election set to take place on 4 July 2024 after 14 years of the Conservative party being in government. In the past week, each party has published their manifestos and a key issue at stake in this summer’s elections is that of immigration or more accurately put: how to reduce immigration into the UK. Of the major four UK political parties (Labour, Conservative, Reform UK, and Liberal Democrats), the voice on immigration is almost united (save for the Liberal Democrats) with the message that net migration into the UK must be reduced, but measures to reach that unified objective differs across party lines.

Below we provide our analysis on the four parties currently leading the polls.

Labour published its manifesto on 13 June 2024.  Its key policies on immigration can be characterised as:

1.    Boosting the UK labour market’s skills to prevent over-reliance on overseas labour
2.    Reforming the UK points-based visa system so as to add 'appropriate restrictions' to bring down net migration
3.    Banning employers/recruitment agencies from hiring overseas labour if they breach employment/immigration law.

It’s notable that Labour’s manifesto and other announcements on its immigration policies lack detail on what a Labour government actually plans to do with immigration. 

Proposal (1) appears to be a long-term plan to upskill the UK, although Labour did suggest that they want to “end the days of sectors languishing on the shortage of skills list”. In this case, Labour is referring to the minimum salary threshold for work visas, where for certain jobs on the Immigration Skills List (ISL) (i.e. a set list of jobs which are deemed to be in shortage in the UK), employers can pay less (i.e. 80% of the usual minimum rate) to sponsor the employee for a visa. It is therefore possible that Labour will endeavour to cut down the ISL as much as possible. This list currently includes many jobs in the science, fishing, graphic design, pharmaceutical, artistic, agricultural, construction and care sectors. This is likely to impact the hiring costs and recruitment plans of employers in that sector. 
It is unclear exactly what restrictions mentioned in proposal (2) will be introduced.

Proposal (3) actually follows the current industry trend of the Home Office stepping up compliance visits to sponsors and generally being tough on employers who breach sponsor duties. Labour’s policy will be targeting those sponsors who “abuse the visa system” and “breach employment law” and will enact “new powers” to ban such employers from hiring from overseas. Under the current sponsorship system, there are existing powers to revoke/suspend sponsor licences to ban employers from sponsoring work visas. It’s unclear what those new powers may be. It may be the case that the Home Office will carry out even more frequent compliance visits and more duties will be added to burden licensed sponsors. Employers should therefore consider and take advice on their current immigration/sponsor duty compliance processes to make sure they can withstand scrutiny regardless of whether Labour wins.

The Labour manifesto in general is critical of the Conservative party’s performance and given the host of immigration introduced in Q4 2023 and Q2 2024 (especially the increased Skilled Worker salary thresholds), it may be the case Labour might revise existing immigration laws laid down by the Conservative Government.  

The Conservative party published their manifesto on 11 June 2024. Key policies can be characterised as:

1. Putting a legal cap on work and family visas which Parliament will review annually
2. Raising the salary threshold / income requirement for work and family visas automatically with inflation
3. Increasing all visa fees, including the Immigration Health Surcharge (IHS) / removing student discount on IHS
4. Requiring visa applicants to undergo health checks / purchase health insurance if they are likely to become a burden on the NHS.

In contrast to Labour, the Conservative policy on immigration carries far wider, and potentially more concerning, implications for UK employers who rely on migrant workers.

Proposal (1) could mean that after a certain number of visas are granted each year, the Home Office will stop granting visas in this category even if the employer/applicant meets the relevant requirements. Depending on how these caps are designed, it may create a situation where employers have to recruit urgently in the beginning of the year in order to beat the cap. It may also transpire to become a US 'H-1B'-like system where a lottery system is in place and selects at random who falls within the quota. It is unclear how the Conservatives' plan would implement such a cap and whether doing so for family visas would breach human rights laws. Once such a cap was introduced, employers would need to urgently tailor their recruitment plans according to the cap.

Proposal (2) is drafted as “raising” the thresholds with inflation automatically instead of “adjusting”. Given how the proposal is drafted, it seems unlikely that a Conservative Government would reduce the salary/income thresholds for work/family visas if inflation were to go down. Nothing has been said in the Conservative Manifesto about its previous plans to increase the family visa income threshold to £34,500 later in 2024 and £38,700 in early 2025. In any case, adding inflation in as a factor would probably create more uncertainty to employers when designing their recruitment plans and create more frequent changes to the salary/income thresholds. Employers could expect that the salary thresholds for sponsorship would go up in the case of a Conservative victory and some may consider expediting their recruitment plan to beat any such change.

Proposal (3) is not unexpected as the Conservative Government has already demonstrated a track record of continuously increasing IHS and visa fees across the board in the last 14 years. One only needs to compare the application fee for a Skilled Worker visa in 2014 (i.e. £514) compared to 2024 (i.e. £1,420). Employers should therefore consider increasing their recruitment budget in the case of a Conservative victory.

Proposal (4) seems unnecessary as some overseas visa applicants must already take a tuberculosis test. The proposal on mandatory health insurance is analogous to the 2016 EEA regulations where certain categories of EU nationals benefitting from free-movement rights had to purchase Comprehensive Sickness Insurance (CSI) even though they were eligible for free NHS care. The result of CSI under the 2016 EEA regulations was that many migrants simply didn’t know this requirement existed and non-compliance was widespread. If the intention is to repeat the history of CSI, then employers will likely need to ensure that their sponsored employees comply with this requirement as non-compliance could mean issues down the line when the employees extend their visa/apply for settlement/apply for naturalisation. 

Reform UK published its manifesto on 13 June 2024. Key policies can be characterised as:

1.    Freezing all non-essential immigration 
2.    Allowing only students with essential skills to remain in the UK
3.    Imposing significant penalties on employers for employing illegal migrants
4.    Imposing an immigration tax with employers paying higher rate national insurance for overseas workers.

These policies mirror Reform UK’s party message of being especially tough on immigration. However, its policies lack sufficient detail to merit detailed commentary. Proposal (1) suggests that only “doctors, nurses, and successful business people, earning above the average salary” would be admitted to the UK, which would probably result in vast areas of the UK economy being closed down in terms of access to sponsored workers. Proposal (2) would probably mean imposing heavy restrictions on the Graduate route. Proposal (3) is already in place under the Conservative Government. Proposal (4) does not differ much from Conservative policy on increasing visa fees. 

The Liberal Democrats party published its manifesto on 10 June 2024. Key policies can be characterised as:

1. Replacing current salary thresholds with a “flexible merit-based system” developed by the government (if elected) working with employers in each sector
2. Reversing the Conservative Government’s ban on care workers bringing in their dependents / exempting NHS and care workers from the Immigration Skills Charge
3. Reversing the increase to income requirements for family visas
4. Expanding the Youth Mobility Visa route
5. Automatically granting all Pre-Settled Status holders Settled Status and providing them with a physical proof of their immigration status
6. Reducing the Home Office nationality fees for children applying to register as British citizens
7. Repealing the right to rent regime
8. Overhauling the UK Immigration Rules for simplification
9. Establishing firewalls to prevent other government departments from sharing information with the Home Office

Of the four manifestos, the Liberal Democrats provide the most exhaustive immigration policy for UK employers/businesses. Proposal (1) is too vague to comment on, but it may suggest a return to days of the Tier 1 (General) visa (i.e. a historical non-sponsored visa which allowed highly skilled migrants with certain attributes to seek employment in the UK and obtain ILR). Proposal (2) would likely alleviate the staffing challenges faced presently by care homes. Proposal (3) / (4) may increase the number of non-sponsored visa holders with a right to work who are accessible to the UK labour pool without the added costs of sponsorship (although employers should still take advice on conducting proper right to work checks). Proposal (5) appears sensible given the time/resources the Home Office has already invested into litigation on the subject and its lack of success. Proposal (6), (7), (8) and (9) are less relevant to employers, but would have wide-reaching implications in the world of personal immigration, which in the interests of brevity, this article does not explore in-depth.

*Source: BBC news - figures taken on 26 June 2024. 

Harry Qiu Yu Yu is an associate in the immigration law team, advising clients in connection with the full range of private client and corporate immigration law matters.