Is the UK still open for global tech talent?
As the home to the largest tech sector in Europe, the UK’s technology industry is now valued at over $1.2 trillion. Contributing 101 billion in Gross Value Added (GVA) to the economy and employing approximately 1.7 million people, the sector is projected to grow by a further 8.9% over the next three years. A critical driver of this success has been the UK’s ability to attract world-class talent from across the globe.
The UK immigration system, while not without cost, offers significant strengths that are recognised by employers and investors alike. These include the extensive publication of rules and guidance, some of the fastest visa processing times internationally, and a high degree of digitalisation. The system’s predictability, transparency and clear processes, alongside the availability of priority services, provide businesses with the certainty and agility they need to deploy talent at pace in a competitive global market.
But recent proposals to reform the pathway to indefinite leave to remain raise an important question: is the UK at risk of undermining the very competitiveness it has worked to build?
The government is considering significant changes to settlement pathways under its proposed Earned Settlement framework. While details remain limited, early indications suggest longer routes to settlement for many workers and greater uncertainty for families.
If pathways to permanence become longer, more expensive and less predictable, the message to global talent becomes harder to interpret.
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. 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 even as the domestic talent pool expands.
This reality is particularly important in light of the latest migration projections published by the Office for Budget Responsibility, the government’s official forecaster, alongside the Spring Forecast last week, which suggests that net migration is expected to fall further than previously anticipated. While public debate often focuses on reducing migration, these projections raise important questions about the potential impacts of a sharper-than-expected decline on both the UK workforce and public finances. At a moment when net migration is already be falling, policymakers should be cautious about further tightening routes such as indefinite leave to remain. Doing so risks undermining the UK’s ability to retain the highly skilled international talent that has been central to the growth and global competitiveness of the tech sector.
techUK’s key recommendations on settlement reform
- techUK emphasises that any proposed changes to indefinite leave to remain must include clear transitional arrangements to protect individuals already in the UK who are on a recognised pathway to settlement.
- The proposed changes should not be applied retrospectively. Changes to the qualifying period for settlement should only apply to individuals who have their visa granted after changes come into effect.
- techUK strongly disagrees that migrants who have worked in an occupation below RQF Level 6 should have their standard qualifying period for settlement set at 15 years.
- Dependents should continue to qualify for settlement at the same time as the main applicant, in line with existing policy.
- This is strong support for allowing dependants of migrants who hold Global Talent or Innovator Founder visa status to retain the current five-year path to settlement, maintaining the UK’s attractiveness and aligning with the government’s commitment to attract individuals through these pathways.
Earned Settlement
The government’s proposed changes to the settlement framework are somewhat unclear. The proposals as published are high-level, with many aspects of the criteria not yet defined, and risks introducing uncertainty at a time when global competition for skills is intensifying. The proposal to extend settlement to 15 years for workers in roles below RQF Level 6 is particularly concerning. Mid-skilled workers are not peripheral to the tech ecosystem—they are foundational. Data centre technicians, network engineers, electrical installation specialists and field service engineers are the backbone of Britain’s digital infrastructure. It is unclear why a mid-skilled worker earning the same as a high-skilled worker should face longer to qualify for settlement if fiscal contribution is the primary concern. The current position, where many roles on the Temporary Shortage List no longer allow sponsored workers to bring family dependants, is already discouraging prospective applicants. A 15-year path to settlement would require individuals to commit up to a third of their working lives in the UK before gaining permanence. That is a significant personal and professional risk, especially when other advanced economies offer clearer and shorter routes.
Dependants
We are concerned about the lack of clarity on how settlement rules would apply to dependants, particularly when dependants may not qualify for settlement at the same time as the main visa holder. This uncertainty could deter highly skilled candidates from relocating to the UK. Even if some main applicants might be better off under the proposals, their family members may be on a significantly longer path to settlement. Dependents should be able to qualify for settlement at the same time as the main applicant, in line with existing policy. In the tech sector, where salaries are typically high, it is common for one parent to be out of the labour market. As a result, many families are unable to meet the minimum income requirement despite strong overall financial stability. These rules fail to reflect real family structures. Treating dependents as less deserving of long-term stability sends the wrong signal to the market.
Costs compound the challenge
Visa fees are already high by international standards. The Skilled Worker route can cost thousands of pounds upfront. The Skilled Worker visa can now cost £6,694 for the application and Immigration Health Surcharge for five years. The cost of a Certificate of Sponsorship for skilled workers has increased by 160% since 2023. Immigration fees are disproportionately high, especially given that migrants already contribute through income tax and National Insurance and often carry private healthcare. This is set to increase with the increase in settlement timelines.
For SMEs, scale-ups and start-ups, the very firms driving innovation, these are not marginal increases. They are strategic deterrents. Smaller businesses, which often rely on hiring fully skilled individuals because they cannot absorb lengthy training periods, are finding sponsorship increasingly commercially unviable. This matters, especially as the Government set in the Modern Industrial Strategy its goal to build the first British trillion-dollar tech business by 2035. Without the right people and talent, this simply will not happen.
Start-ups face a distinct challenge. Equity is a normal and valuable part of compensation in early-stage companies. Yet, current rules do not count equity towards salary thresholds. This design, suitable for large corporates, risks disadvantaging the very businesses policymakers frequently champion as engines of growth.
There are also practical reforms that could make the system more competitive without undermining fiscal objectives. The Immigration Health Surcharge must currently be paid in full upfront, creating a substantial financial hurdle. Allowing phased payments, or enabling unused contributions to transfer between visas, would reduce friction without reducing revenue.
Certainty is needed
Perhaps most importantly, policy certainty matters. Individuals already on a five-year route to settlement need clear transitional protections. Families need clarity that dependants will not face misaligned or delayed pathways. Settlement should not become a moving target.
None of this is an argument against reform. The Government is right to consider how migration frameworks operate and how they command public confidence, but reforms must align with economic strategy. The UK cannot simultaneously aspire to global leadership in frontier technologies and make itself a less attractive destination for the talent that powers them.
It is unrealistic to believe that any advanced economy can ‘train its way out’ of every skills shortage in perfect alignment with business demand, especially as the skills gap has remained a top issue for the UK’s tech sector for years now. The broader message Britain sends to investors and innovators matters enormously. At present, that message is confused.
techUK responded to the Home Office’s consultation on Earned Settlement. Please get in touch to find out more about our immigration policy work.
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Authors
Nimmi Patel
Associate Director for Policy, techUK
Nimmi Patel is the Associate Director of Policy at techUK. She works on all things skills, education, and future of work policy, focusing on upskilling and retraining. Nimmi is also an Advisory Board member of the Digital Futures at Work Research Centre (digit). The Centre’s research aims to increase understanding of how digital technologies are changing work and the implications for employers, workers, job seekers, and governments.
Prior to joining the techUK team, she worked for the UK Labour Party and New Zealand Labour Party, and holds an MA in Strategic Communications at King’s College London and BA in Politics, Philosophy and Economics from the University of Manchester. She also took part in the 2024-25 University of Bath Institute for Policy Research Policy Fellowship Programme and is the Education and Skills Policy Co-lead for Labour in Communications.
- Email:
- [email protected]
- Phone:
- 07805744520
- Twitter:
- @nimmiptl
- LinkedIn:
- https://www.linkedin.com/in/nimmi-patel1/
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