UK's visa crackdown leaves city of London immigrants in limbo

Time of India

5 hours ago

One banker in the City of London is faced with paying an extra £40,000 a year in university fees for his children. Nursing homes are worried about finding enough caretakers for residents. The insurance industry says overseas relocations have now ground to a halt.
Such is life in the UK after the government announced it would now take ten years for immigrants to receive preferential status known as indefinite leave to remain, or ILR. That's twice the time it used to take.
'Ten years is a very long time to spend without certainty,' said Louise Haycock, partner at the immigration services firm Fragomen, who has been fielding frequent requests from businesses on the matter. 'The UK already has one of the most expensive immigration schemes.'
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The government, which is still finalizing the changes, is attempting to navigate public pressure to tackle the number of people arriving in the country, as the right-wing populist Reform party gains ground in local and parliamentary elections. It's too soon to say whether the plans will apply retroactively to those already in the country, immigration minister Seema Malhotra said this week.
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Net migration to the UK quadrupled between 2019 and 2023. While official data suggests this rise is reversing as the post-Covid spike in foreign students ends and European Union citizens face more hurdles to move, the government is keen to drive the decline further. The rules are also tightening for those who wish to bring family members when they move.
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The most obvious businesses hit by the crackdown are care homes, which rely heavily on workers from abroad. Under proposals set out by the Labour government after May's local elections, overseas recruitment in the care sector will end within months, reversing an exemption introduced in 2022.
The charity Care England described the decision as a 'crushing blow to an already fragile sector.' Operators say funding pressures prevent them from offering higher salaries, meaning the jobs often only appeal to overseas workers.
The government has said employers will be able to hire migrants who are already in the UK until 2028.
Other sectors are concerned by the changes. Pharmaceutical companies, for example, face extra paperwork and costs that could restrict scientists moving to the UK. The hospitality industry also depends on attracting workers from abroad, who will find it tougher to qualify for skilled worker visas under the new, higher pay threshold.
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One large multinational British company is anticipating the changes to immigration rules will raise costs for its staffing moves, according to a person familiar with the matter, who asked not to be named given the sensitivity of the topic.
Despite the likely financial impact, the person said the company didn't plan on raising the issue with the government and will instead absorb the additional expense.
City Fears
In the City of London, whose banks, law firms and professional services firms have long drawn skilled workers from overseas, there's rising anxiety.
One City worker, who requested anonymity, is considering a move to Dubai or the US in order to fund his child's increased university fees and said he felt cheated by the changes the government is making.
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Some individuals relocated to the UK to enable their children to study at British universities. Yet parents without settled status will now face as much as £50,000 in annual international fees, instead of £9,535 in domestic fees.
'We've got people that are in the UK who are coming to us and saying, 'I've been in the UK for three and a half years, I've made it my home, my kids are in school, I pay my taxes, I want to buy a house. But I can't now because I don't know if I'm going to be able to get a mortgage in five years time if I'm going to have to wait another six, seven years for ILR,'' said Seema Farazi, global immigration leader for government affairs and financial services at EY.
The headline measures announced by the government to restrict immigration were not helping the UK's image with high-skilled migrant workers, she added. 'We have seen a lot of people who are looking at alternative options in different parts of the world.'
As well as the extra years waiting for settled status, foreign bankers are also facing higher taxes relative to other global financial hubs, the end of the non-dom status that might have shielded their overseas wealth from UK tax and increasingly squeezed public services.
One London employee at a major international investment bank, who spoke to Bloomberg on condition of anonymity, said she was now concerned about her position in the UK. She'd bought a house after relocating from Asia, in the confidence that she'd have permanent residency within five years and would be able to apply for a new job if she lost her current one.
But she said in a fiercely competitive industry, it was far from clear that anyone would keep their role for a decade. Had she known it might be that long before she would gain settled status, she said she would not have come to the UK.
Companies will also need to pay the UK's £1,000 annual immigration skill charge for five additional years until workers become settled. Large international banks are expected to largely absorb the increased bureaucratic burden but the task won't be feasible for every firm.
Smaller firms will be particularly hard hit by the reforms, said Craig Beaumont, executive director of the Federation of Small Businesses, in a speech in May. 'Small business owners are not immigration officers,' he said.
'To attract and retain experienced international talent, we need to have access to long-term visas that are compatible with families moving to the UK,' said Arabella Ramage, legal and regulatory director at the insurance trade body Lloyd's Market Association. The organization expects 260,000 skilled people to leave the insurance industry by 2035, based on the ages of workers.
Details of the immigration policy are still being finalized, and the government has said it will allow some people to qualify for ILR sooner, based on criteria yet to be decided that could measure immigrants' economic contribution.
'It's just another burden and it's clamping down on using highly skilled individuals,' said Richard Harris, chief legal officer at recruitment agency Robert Walters Group.
Uncertainty is palpable, even for those already in the country. It's clear the government's intention is trying to find different ways they can make immigration more difficult, according to immigration barrister Catherine Taroni. 'The white paper itself is very broad. It's quite all encompassing,' she said.