The UK's crackdown on immigration, specifically on international students and overseas skilled and health & care workers, is projected to cost businesses over £40 billion in exchange for no overall economic benefit to Britain, a Home Office impact assessment determined.
The Home Office estimates that the rule changes on sponsoring visas for skilled workers, which took effect in April, will come at a £37.4 billion cost for businesses. Such significant costs are due to the fact that much higher salaries will be required to hire the same workers. Despite the savings associated with lower spending on public services, there is still an anticipated net economic cost of £25.6 billion.
The education sector is also expected to take a significant hit. By curtailing international students from bringing family members with them during their course of study at UK universities, it is predicted that the losses will be almost £5 billion in tuition fees and £15 billion in foregone tax revenues from the earnings of students and their dependants. Again, it was found that these are not expected to be remediated by lower public services spending, which, when accounted for, still means the policy is anticipated to result in a net cost of approximately £500 million over 10 years.
The political dedication to lowering immigration numbers is a response to the record highs seen in 2022 under the previous Conservative government, when a total of 763,000 people came to the UK.
Starmer has not only maintained the Conservatives' reforms but pledged to further curb immigration, particularly by reducing the recruitment of high-skilled workers. His tough stance was demonstrated when he told businesses that he would not tolerate employers who rely on overseas hiring rather than training domestic labour. Business groups did not respond well to the prospect of more restrictive visa rules, citing damage to the higher education sector and increased pressure on recruitment in vital sectors of the economy.
Despite this, the government stands firm in their conviction that immigration is not a solution to tackling skill shortages in the UK.
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