White paper: UK Immigration patterns, 2023

White paper: UK Immigration patterns, 2023

On February 20, 2023 | In General | By A Y & J Solicitors Last Updated : January 12, 2024

Introduction

2022 was a year of tumultuous political change, with revolving doors both at Number 10 and the Home Office. Despite this, governmental immigration policy relating to the points-based system and legal migration remained on track and focussed largely on attracting skilled and high-skilled workers, particularly from the technology, engineering, digital and innovation sectors.

Perhaps the biggest change was the cancellation of the ‘golden’ Tier 1 (investor) route which was scrapped in February following fears that it had been used by those linked to organised crime and money laundering as a route to gain a foothold in the UK.

The biggest story in terms of immigration in 2022 was the record net migration figure of estimated at 509,000 at the year ending June, 2022. This was driven by non-EU nationals and also by schemes for people from Ukraine and Hong Kong. The figure, however, created a difficult situation for the government, which reiterated its manifesto promise to reduce overall migration.

Stability has returned to government and we do not forecast any significant upheavals or unscheduled changes to the legal immigration system. However, we are predicting 2023 to be a year in which the system is further tweaked and adjusted as the Conservative Party strives to strike a balance between two seemingly opposing forces. First is the percentage of Conservative voters who will expect the government to reduce immigration and meet its manifesto pledge before 2024’s General Election. Second, is the business community beset by labour shortages which is increasingly looking overseas to fill vacancies and is pressuring the government to keep the legal immigration taps open to allow more workers into the UK. It remains to be seen whether the government can find a way to please both sides.  

Yash Dubal, Director, A Y & J Solicitors 2023 in detail

Sponsor licence increase

The past two years has seen a significant rise in the number of businesses registered to hold sponsor licences. Indeed, the extra 20,000 businesses which have registered to employ workers from overseas constitute a 40% increase. There are now almost 50,000 businesses in the UK registered to sponsor a worker under the Skilled Worker and Senior or Specialist Worker visa routes. 

There are two reasons for the rise. Firstly, Brexit. When The UK left the EU, EU citizens lost the right to work freely in Britain. Those coming here to work who do not have settled or pre-settled status must now have a work visa. Those employing them must be registered with the Home Office and hold a valid sponsor licence. Secondly, acute labour shortages in the British workforce have forced many businesses to look overseas to fill vacancies. 

As labour pressures continue, demand for sponsor licences is set to rise throughout 2023 and many businesses who have never considered employing from overseas are now exploring this as a feasible option. In response the Home Office has expanded capacity to process sponsor licence applications and remains committed to reducing the time it takes businesses to sponsor a worker.

Skilled worker visas

The Skilled worker route was the most popular work visa in 2022 and will remain the prime route for overseas workers to legally work in the UK in 2023. Application numbers will be high, but could drop from 2022’s high, with most applicants expected to originate from India. Applications from Nigeria will also be significant. Despite a gloomy economic forecast for the UK in 2023, it will still be a favoured destination for overseas nationals, particularly from countries with cultural and historic links to Britain.

There will be continued pressure on the government from businesses to lower thresholds to bring more professions under the skilled worker umbrella. In January the IMF predicted that the UK economy will contract by 0.6% in 2023, making it the worst performing major industrialised country in the world. The shrinking UK workforce was given as one of the reasons for the decline and with no evidence of an untapped army of unemployed British workers ready to swell the ranks, increased immigration remains the most logical answer. A reduced minimum salary threshold, a reduction to the NHS surcharge and Immigration Skills Charge and a relaxation of the English language requirement have all been suggested as possible measures which might allow even more successful skilled workers into the UK.

Increased compliance visits

In early 2023 it was evident that the Home Office was ramping up its immigration enforcement activity specifically to target illegal immigration. In the last month of 2022 raids on premises suspected of employing illegal workers increased by 10%. The action followed a speech by Rishi Sunak in which he outlined plans to beef up enforcement resources and pledged to increase raids on illegal workers by 50%. This policy will also be evident in tighter monitoring of sponsor licence holders and workplaces employing visa holders, which can expect more spot-checks and closer scrutiny of systems and processes.

Shortage occupation list

As at February 2023, the shortage occupation list was overdue for an update and there is an expectation that when it is revised, it will be expanded to include some of the lower-skilled occupations where employers are struggling to recruit domestically, such as some of the more skilled hospitality roles. If this is the case, it would make sense to lower Skilled worker criteria and surcharges at the same time, in order to make it financially feasible for workers to apply for visas for the lower paid roles. Another option would be to introduce more temporary visa schemes for seasonal workers, perhaps in the hospitality and catering industries where staff shortages are particularly acute. 

International competition

Workers with skills in areas such as IT, fintech, programming and computer design, can pick and choose what country they want to work in. Recruitment is increasingly global and skilled workers are increasingly mobile. While Britain’s immigration system is supposed to be designed to attract ‘the brightest and best’ workers in the world, it has stiff competition. Most developed nations are also on the hunt for talented workers and several are rolling out measures to reduce immigration red tape, thereby making it easier for overseas nationals to migrate to them. These include the US, Canada and Germany, which have all recently taken steps to relax immigration rules to attract more highly skilled migrants. Last year Canada unveiled a goal to welcome 465,000 new permanent residents in 2023, 485,000 in 2024, and 500,000 in 2025, while the German government approved the key points for a draft law that will loosen the rules on skilled labour immigration from third countries outside the EU. The Australian government is also reviewing its immigration policies with a view to making the country an easier destination for skilled migrant workers. Within this context, the UK must remain competitive and welcoming, if it does not want to fall behind.

In April 2022 the Government revamped visas for overseas businesspeople coming to the UK to set up a subsidiaries or to work in branches of their parent organisation. The changes included new visa routes and the closure of others, including the popular Sole Representative visa. These new visas are now administered under a single entity, named Global Business Mobility and are Senior or Specialist Worker, Graduate Trainee, UK Expansion Worker, Service Suppliers and Secondment Workers. The new system is supposed to make the application process easier.

The Senior or Specialist Worker route, which directly replaces the commonly used Inter Company Transfer route, will be the most common. The UK Expansion worker visa will not be as popular as its predecessor, the Sole Representative route. The Expansion Worker route has not attracted significant applications and licence approvals between April 2022 and January 2023 under the subcategory were proportionately low. It may gain traction over time, however.

Another new visa route which will continue to gain momentum in 2023 is the Scale Up visa which is open to workers to come to the UK to work in a qualifying fast-growing business. While there are significant stipulations attached to businesses using the route, more people than expected have signed up to sponsor workers under this route. Although the visa only allies to companies that fall under the OECD definition of a scale up, the visa is significantly more flexible than the Skilled Worker option.

Investor choices

A review of the cancelled Tier 1 (Investor) route found that, of the 6,312 visa holders, only ‘a small minority of individuals were potentially at high risk of having obtained wealth through corruption or other illicit financial activity, and/or being engaged in serious and organised crime’.

Following the report, Home Secretary, Suella Braverman, indicated that a new visa for investors may be considered. She said the Home Office was reviewing the data and was considering ‘a range of actions’, adding: “The government is clear that any future visa route to facilitate investment-based migration must not offer entry solely on the basis of the applicant’s personal wealth.” 

When the Tier 1 (investor) route was cancelled it closed the door for many genuine, law-abiding people who wanted to invest in the UK. The alternatives, such as the Innovator Visa, all have limitations.  

Any subsequent replacement will require a greater degree of scrutiny on applicants but even so, will be welcomed by the many genuine law-abiding investors who have been excluded from the UK. 

Self-sponsorship  

Throughout 2022 interest continued to grow in a little-known, flexible legal process for business owners, investors and entrepreneurs to legally gain UK work visas. Called self-sponsorship it was pioneered by A Y & J Solicitors and interest is expected to continue growing in 2023 after the concept behind it was proved by several individuals. They now have bona fide visas, having followed the scheme under which they established a UK limited company and then sponsored themselves through that company in order to gain a Skilled worker visa. The process complies with immigration rules and has proved useful for people excluded from investing in the UK because they do not meet the limited criteria of current, restrictive visa routes. 

Trade talks 

Another pressing ambition for the government to achieve before the next general election is to sign trade deals. Top of the list is a Free Trade Deal with India. Negotiations have been rumbling on for over a year and were sidelined during 2022’s leadership changes. Some ill-advised comments about Indian migrants by Home Secretary, Suella Braverman, also threatened to derail talks. Migration of Indians to the UK remains a hurdle, particularly as migration has become a renewed issue of concern within the Conservative Party. Delhi has long pushed for free movement of Indian citizens to the UK as part of any deal, Britain has refused. As a concession, Mr Sunak launched the UK-India Young Professionals Scheme, which will allow 3000 Indian graduates between the ages of 18 and 30 to live and work in the UK for two years. While this was welcomed by Indian PM Narendra Modi, it may not be enough to get the deal over the line. Both sides remain committed however, and politically, there are far more reasons why an FTA should succeed, rather than fail.

Digital changes

Some of the biggest changes to immigration in 2023 will happen in visa application processes, which are increasingly becoming digital. From January the UK started to introduce an Electronic Travel Authorisation visa waiver programme for visitors from the EU and other countries whose nationals do not require a visa to visit the UK. Throughout the year there will be changes to how overseas workers are sponsored, how they apply for their visas and how sponsors update UK Visa and Immigration (UKVI) – in line with UKVI’s vision of streamlining and digitising visa applications.

Family routes and paths to settlement will be simplified making it easier for those who qualify to gain the correct paperwork and permissions, however, there could be a tightening of the criteria for certain spouse visas, particularly for those accompanying people on student visas. 

Digitisation will increasingly be introduced in the system to reduce the number queries from customers. UKVI is developing chatbot and voicebot functionality which it plans to launch in 2023, ‘giving customers the means to resolve their queries effectively, without needing to wait to speak to an agent’. 

Customers applying through the points-based system now have a digital customer account to access their eVisa and relevant information about their rights and entitlements. During 2023 there will be further improvements to the digital customer account, including more seamless integration and more intuitive navigation between government services. 

Existing sponsors will have the ability to invite a worker to make their visa application once role details have been approved. The online management system for all sponsors will be improved, allowing sponsors to make changes such as adding users to their licence.

Conclusion

There will be a general refinement of the immigration system and headline digitisation of processes. Overall, net migration figures will likely reduce, because the number of people taking advantage of specific schemes for Ukrainians and people from Hong Kong have peaked. Demand for work visas will continue to be strong. The Government faces a difficult task in trying to please the contrasting demands of the electorate and business. It will be interesting to see how these contradictions play out in 2023.

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