Mind the skills gap: the Government's new approach to labour migration

Today, the government launched its new White Paper setting out its vision for the immigration system. Another government, another plan to drive down immigration - you'd be forgiven for think we've been here before.

This time, though, ministers argue that labour market policy has not been sufficiently considered in the round. Without co-ordinated action across economic inactivity, skills and industrial strategy, the pressure has fallen disproportionally on migration and recruitment from overseas.

So what are the government's key announcements on immigration?

From migration policy to workforce policy

A new Labour Market Evidence (LME) Group will bring together the Industrial Strategy Advisory Council, the Department for Work and Pensions, Skills England and equivalents in the Devolved Governments, and the Migration Advisory Committee (MAC). The LME Group will gather and analyse workforce, skills and participation data, especially in sectors central to the industrial strategy or with a high reliance on migration. We know that members have invaluable labour expertise and we'll work to clarify how you can share it with the LME Group in order for it to drive growth and be as effective as possible.

Sectors that regularly recruit from overseas will now need to develop detailed workforce strategies. These must show how they plan to invest in skills and training and engage inactive workers in the UK. Any strategies must also address pay and conditions and consider ways to reduce the risk of worker exploitation.

Introducing the Temporary Shortages List

A new Temporary Shortages List will allow sectors to recruit from overseas in the interim, if the strategy is approved by the MAC. Occupations below qualification level 6 (degree level) must be listed on the Temporary Shortage List to gain access to the immigration system. While this process is set up, the Temporary Shortage List will contain occupations that are currently listed on the Immigration Salary List or which are crucial to the delivery of the UK’s Industrial Strategy.

It's not specified in the White Paper how the Temporary Shortages List will operate, including how often it will be reviewed. We will be making the case to the government that it needs to be frequent enough to adapt to rapid changes in labour demand.

Overseas recruitment for care workers will immediately end. A transition period until 2028 will allow visa extensions and in-country switching for current visa holders. Given the wider issues in staffing in the care sector, the government will need to seriously consider other ways to maintain safe staffing levels without compromising service delivery.

Other reforms you should know about

There are also a number of additional reforms to the immigration system which will affect recruiters:

• The Immigration Skills Charge will rise by 32%, the first increase since 2017, to align with inflation.
• The government will increase the use of high talent and global mobility routes, including creating faster routes for bringing people to the UK who can drive growth in "strategic industries". Which industries these are isn't defined in the White Paper.
• The graduate visa will be reduced to 18 months after studying.
• Reforms to the sponsorship system will put greater accountability and responsibility on sponsors to prevent modern slavery and make it easier for workers to switch between licensed sponsors, reducing dependence and risk of abuse.
• The domestic worker visa route will be reviewed to reduce instances of modern slavery and labour exploitation.
• Language requirements for Skilled Worker Visas and workers on routes requiring English will increase from B1 to B2 (Independent User) levels.
• The government will explore allowing a limited pool of UNHCR-recognised refugees and displaced people to apply for employment through sponsored worker routes.

What this means for your business

The White Paper is very light on details of the timing of these changes. Only closing the social care visa will happen in the immediate term. Most changes will require new legislation or for the government to change its approach.

If your clients rely on overseas recruitment, they’ll now need more than shortages to make their case - they’ll need a plan. Now’s the time to help them think long-term about their training, progression, and engagement with domestic talent. Recruiters who can guide that strategy will be indispensable.

We will continue to engage the government to ensure plans are practical and informed by lessons from past reforms.