12 May 2025

How will the Immigration White Paper affect the UK’s role as a tech talent hub?

The UK government has today (12 May) published a white paper that sets out its plans to reform the immigration system to be “controlled, selective, and fair”, as stated by the Prime Minister.

At the heart of the white paper is the explicit aim to reduce migration numbers and for businesses to only use the immigration system to bring in highly skilled talent. Employers will have to show they are investing in UK skills before they will be allowed to bring in workers from overseas. Every area of the immigration system – work, family, and study – will be tightened up.

The implementation time for the changes outlined in the white paper have not been clarified but will take a phased approach, and will be delivered through changes to the Immigration Rules. Government will:

Raise the skilled visa threshold to RQF6 (graduate level) to reduce increasing numbers of lower-skilled workers coming to the UK, with salary thresholds reflecting the higher skill level.
Establish a new Temporary Shortage List where occupations below RQF 6 must be listed on the Temporary Shortage List in order to gain access to the immigration system. The Immigration Salary List which gives people discounts from salary thresholds will be abolished.
Launch new requirements for workforce strategies for key sectors where there are high levels of recruitment from abroad. Government will only permit use of the immigration system on a time limited basis where the Migration Advisory Committee, an independent, non-statutory public body that sits within the Home Office, has advised it is justified such as where employers seeking to recruit from abroad are committed to playing their part in increasing recruitment from the domestic workforce.
Establish the Labour Market Evidence Group to inform understanding of where sectors are overly reliant on overseas labour and reverse under-investment in domestic skills. The LME Group will be comprised of: The Industrial Strategy Advisory Council, who are encouraged to focus on domestic recruitment and training; the Department for Work and Pensions, tasked with reducing economic inactivity and increasing workforce participation; Skills England and equivalent organisations in the Devolved Governments in Scotland, Wales and Northern Ireland; and the Migration Advisory Committee which will guide immigration policy.
Close the social care visa route to overseas recruitment. For a transition period until 2028, government will permit visa extensions and in-country switching for those already in the country with working rights, but this will be kept under review.
Increase the Immigration Skills Charge (ISC) for the first time since its introduction in 2017, by 32% to bring it in line with inflation.
Increase English language requirements for visa holders and dependants.
Reduce the ability for graduates to remain in the UK after their studies to a period of 18 months. Government will also strengthen the requirements that all sponsoring institutions must meet in order to recruit international students. Government will explore introducing a levy on higher education provider income from international students, to be reinvested into the higher education and skills system. Further details will be set out in the Autumn Budget.
Increase the number of people arriving on very high talent routes. Government will make it simpler and easier for top scientific and design talent to use the Global Talent visa and plans to review theInnovator Founder visa to ensure that it supports entrepreneurial talent currently studying at UK universities to move into the visa so that they can build their business and career in the UK.

techUK analysis

Britain’s tech sector is the largest in Europe and is now worth over $1.2 trillion. The UK tech sector’s ability to attract and retain talent relies on businesses being able to be agile and dynamic to plan for the future. techUK’s members are committed to building a strong domestic talent pipeline, but for the UK to remain world leading in fields such as AI and quantum the UK must remain open and attractive to international innovators, investors and the talent that supports that ambition.

techUK has always believed that we should not view the need for international talent as a temporary measure until the UK can cultivate a sufficient domestic talent pool. While we welcome the government's efforts to increase the number of people arriving on very high talent routes, we are disappointed by the increase in the Immigration Skills Charge, as it effectively penalises employers for addressing skills shortages through international recruitment. Additionally, reducing the Graduate visa from two years to 18 months undermines the government's stated goal of supporting and retaining highly-skilled talent from UK universities. We are cautious about the proposed increase in the skilled visa threshold to RQF6 (graduate level). In particular, we will monitor the potential impact this may have on recruitment in data centres and similar sectors that rely on specialised technical roles.

If the UK aims to house world-leading tech companies, the demand for international talent, regardless of their nationality, will persist. This fundamental requirement will remain unchanged as the domestic talent pool expands. Ultimately, to maintain the UK's position at the forefront of global innovation and aspire to remain a science and tech powerhouse, we must ensure that our visa system offers value for money and keeps costs competitive when compared to other neighbouring countries.

Strengthening immigration policy for growth

The UK system has many positive aspects, for example the extensive publication of rules and guidance, some of the fastest processing times and digitalisation. But in order to increase the number of businesses and people working in the eight critical sectors identified by government, which includes tech, as the answer to boosting economic growth, government needs to:

Reassess costs of the system to be in line with international competitors. The Skilled Worker visa can now cost £6,811 for the application and Immigration Health Surcharge for five years. The cost of a Certificate of Sponsorship for Skilled Workers has increased by 120% since 2023. With domestic shortages in critical tech roles ever more pronounced, this move is another barrier for scaling companies to access the talent they need to grow. techUK understands that this is the government’s attempt to reduce net migration figures and to raise public funds. However, the UK’s visa fees are already significantly more expensive than our neighbours in the EU.
Review the Immigration Skills Charge (ISC). techUK would like to open a discussion in the way in which the ISC is used and whether it is the most effective way for companies to be a part of skills development in the UK. In 2023-24, Government received £667 million from the ISC, 14% more than the previous year, and has generated £2.1 billion in total over the last seven years. This funding has not translated into an increase in further education funding and is set to increase by 32%. Although government has committed to ISC funding to be used at the oncoming Spending Review to support skills funding for priority sectors, techUK will like proper transparency from the Home Office, Department for Education, and Treasury setting out where the funds from the ISC have been used since it's implementation. Employers should not be penalised for addressing skills shortages through international recruitment.
The minimum salary threshold needs to be consulted on with industry and brought to a level that does not penalise businesses outside of London and the South East. In April 2024, the government raised the salary requirement for Skilled Worker visas from the 25th to the 50th percentile of earnings in each occupation, based on ASHE data. For example, businesses hiring a software engineer from abroad must now offer a minimum salary of £51,000. Professional services firms report that 10–15% of candidates who previously qualified for sponsorship no longer meet the new salary requirements.The 50th percentile salary requirement was introduced without consulting businesses. Without an effective Immigration Salary List, the system is inflexible, inflates salaries artificially, and makes negotiating compensation packages harder.
The Home Office should allow companies to count equity towards salary thresholds for the Skilled Worker Visa. This small change would prevent startups from being unfairly disadvantaged and ensure they can continue to access the global talent they need to grow.
Introduce phased Immigration Health Surcharge payments, rather than requiring the entire amount upfront. techUK also urges government to allow the transfer of unused Immigration Health Surcharge between visas which could be easily incorporated into the application process by asking applicants to input their current visa’s expiry date, allowing the Home Office’s systems to automatically calculate the amount of Immigration Health Surcharge already paid and how much credit should be applied to the new visa.
Build a bridge of innovative tech talent by ensuring more universities are included in the High Potential Individual visa eligibility list. Currently, graduates from some of the world’s top high-tech educational institutions are not eligible for the UK’s High Potential Individual (HPI) visa, due to the restrictive and US-centric nature of the current eligibility list. An evaluation of this route has been done and it is clear it needs to be made more inclusive and globally representative. The current criteria favours graduates from a narrow group of primarily US universities, which inadvertently excludes high-achieving graduates from equally prestigious institutions in countries. For example, under the current rules, a graduate with a third-class liberal arts degree from a listed US university may qualify, while a top-performing physics graduate from an Indian Institute of Technology does not. Government has currently committed to exploring a targeted and capped expansion of the HPI route, looking to double the number of qualifying institutions.

A call for a more strategic approach to migration policy

The Institute for Government argues that an annual Migration Plan would help the UK move beyond the current incoherent and reactive approach to immigration policy. A regular, evidence-based report could better highlight the positive impact of migration on tax revenues, business growth, and the wider economy, if Ministers are open to receiving this. Findings from the National Audit Office found that frequent and unpredictable visa rule changes make workforce planning extremely difficult.

techUK looks forward to engaging with the newly established Labour Market Evidence Group and continued communication with the Home Office.

Commenting on the UK government’s Immigration White Paper, techUK’s Deputy CEO, Antony Walker said:

“The UK’s tech sector has long been a global leader in innovation and digital transformation, and its continued success is linked to the diverse talent it attracts from around the world. As the demand for skilled workers in fields such as AI, cybersecurity, and quantum continues to grow, it is crucial that the UK grants and maintains immigration pathways that enable tech companies to access the talent they need.

“A well-designed and fairly priced visa system is essential to maintaining the UK’s global competitiveness. We have the opportunity to reassess the UK’s immigration system to enhance public confidence and better support businesses. In particular, reviewing costs associated with visas and other related charges such as the Immigration Skills Charge, could help ensure the system is not only fair but also effective.

“If government wants to reduce reliance on the immigration system, it must urgently invest in skills and training, otherwise businesses will be left without the workforce they need to survive and grow.”

For inquires or further information, please contact:

Nimmi Patel

Head of Skills, Talent and Diversity, techUK

Antony Walker

Deputy CEO, techUK

Alice Jackson

Director, Brand and Marketing, techUK

Margherita Certo

Head of Press and Media, techUK

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