Labour Government is considering imposing strict limits on the number of skilled foreign workers UK companies can hire, in a move designed to cut net migration and reduce dependency on overseas labour.
Home Secretary Yvette Cooper has tasked a newly established Labour Market Evidence Group (LMEG) with reviewing the current shortage occupation system and examining whether an annual or monthly quota should be introduced for skilled worker visas. The aim is to curb the number of recruits from abroad for roles deemed in short supply while encouraging employers to invest in training British workers.
Reducing Reliance on Foreign Labour
Under the proposals, sectors seeking to employ skilled migrants would be required to submit concrete plans for training UK staff to fill those roles in the medium to long term. Businesses that fail to meet agreed training targets could be blocked from hiring from overseas.
The move is part of Labour’s broader strategy to bring net migration down by an estimated 60,000 a year. Ministers believe the new approach will balance short-term economic needs with the long-term goal of a self-sufficient domestic workforce.
Higher Skills Thresholds
Ms Cooper’s reforms also propose raising the minimum qualification requirement for migrant workers from A-level to graduate level, reversing a policy introduced under Boris Johnson. This would exclude around 120 non-graduate occupations, including chefs, retail staff and certain care roles, from overseas recruitment entirely by the end of next year.
However, approximately 60 non-graduate roles vital to Labour’s industrial plans, such as welders, electricians, mechanics and construction workers, would be temporarily exempt from the ban. These sectors would be permitted to hire abroad if they produce credible and deliverable training strategies for UK staff.
Salary Safeguards and Sector Accountability
The review will also examine salary thresholds for shortage roles to ensure companies do not use cheaper foreign labour to undercut wages. Prof Bell suggested pay requirements could be set above market rates to incentivise domestic recruitment and training.
He issued a warning to sectors that fail to meet commitments: “If a business pledges to train thousands and delivers only a fraction, they will lose the right to recruit from overseas. This is a carrot and stick approach, help is available during the transition, but there will be consequences for failing to invest in British skills.”
Next Steps
The LMEG is expected to spend the next year evaluating which occupations should remain eligible for overseas recruitment, based on their economic importance, evidence of genuine shortages and the feasibility of domestic training plans, as part of wider efforts to reduce net migration. The Home Office is also reviewing whether skilled workers already in the UK will retain eligibility for permanent settlement under the revised system.
The reforms mark one of the most significant overhauls of the skilled migration route in recent years, signalling Labour’s intent to pair immigration control with an aggressive push for workforce development at home.
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