Labour's immigration changes could cost £11bn due to 'significant loss' for UK workforce

Changes made to the UK immigration system, including ending recruitment on the health and care worker visa, could cost the economy up to £10.8 billion, a report has found.

The changes, announced in a white paper in May, tightened existing immigration rules, which included ending the overseas recruitment of social care workers, reducing the standard length of the graduate visa from two years to 18 months, and requiring a higher standard of English for some immigrants to qualify for their visas.

Some of these changes, including a reduction to the list of jobs eligible for “skilled worker” visa sponsorship, were implemented in July.

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The changes to the immigration system are expected to lower net migration numbers by between 21,000 and 34,000 in 2025 to 26, and between 40,000 and 67,000 in 2029 to 2030. 

The Work Rights Centre, analysing the government’s Impact Assessment, found that the reduction in income tax and fees paid by migrant workers due to the new immigration rules is “predicted to have a negative monetary impact of between -£10.8bn and -£2.2bn” over a five-year period.

In addition, it found that the benefits brought on by the immigration changes were “unquantifiable”, and depend on whether the reduction in migrant workers prompt businesses to train more UK nationals.

With regards to the government’s decision to end overseas recruitment on the health and care worker visa, the Home Office recognised that the move “may have an impact on users of care services who are likely to be older people and those with disabilities”. In 2024, the Work Rights Centre found that migrant workers make up almost a third (32%) of care worker roles in England. 

Dr Dora Olivia Vicol, CEO of the Work Rights Centre, explained that some of the recent changes to the immigration system could “add a major blow to public finances, at a time when the chancellor has had to make painful decisions.”

Vicol added: “These figures portray a significant loss to the UK’s workforce, with domestic workers somehow expected to fill in the gaps ASAP. The losses are almost certain: older people and disabled people will find it harder to get care, and between -£10.8bn and -£2.2bn will be lost in taxes; meanwhile, the benefits are uncertain and intangible.

“These changes deal the UK a bad hand with a lot to lose and little to gain,” she said. “Meanwhile, exploited migrant care workers are yet to receive any remedy for the harm they suffered at the hands of Home Office approved sponsors.”

Vicol explained that it is “particularly concerning” that the government’s figures came after the rules were changed, which she said “limits the public’s ability to scrutinise the impact of these proposals before they were enacted.”

In November, home secretary Shabana Mahmood announced further reforms to the UK’s immigration system, with proposals including quadrupling the waiting period for some refugees to receive permanent residence in the UK, from five to 20 years. Alongside this, Mahmood proposed that migrants would only become eligible for benefits and social housing if they first become British citizens.

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