Immigration crackdown could cost the UK £4.4bn

Plans to make it harder for international students to stay in Britain will hit the economy, a Home Office assessment finds

- HOLLY BANCROFT HOME AFFAIRS CORRESPONDENT

Labour’s immigration crackdown could leave the UK £4. 4bn worse off, the Home Office’s own assessment of Sir Keir Starmer’s sweeping reforms has admitted.

The prime minister unveiled plans in May to slash immigration, including a move to make it harder for foreign students to stay in Britain, saying that settlement in this country was a “privilege that must be earned, not a right”.

The headline policies in the white paper included cutting the length of time that international graduate students are allowed to stay in the UK after finishing their studies. The English language requirement for those on the skilled worker visa – which allows a person to come or stay in the UK with an approved employer - will also be raised next year.

In a blow to businesses, the immigration skills charge - a fee paid by UK employers sponsoring overseas workers – will also be hiked by a third.

Now, a Home Office assessment looking at the impact of these policy changes has predicted the UK will likely be £1.2bn worse off over the next five years - with the possibility that the negative financial hit could be as much as £4.4bn. The best-case scenario is that the UK makes £0.8bn through the changes, it says.

The assessment, published last week, says this is broadly caused by the loss in university tuition fees due to the tightening of the graduate visa route, as well as changes to the amount of money brought in by visa fees. There will also be an indirect estimated fall in income tax as a result of fewer people staying on to work, it says.

Experts have warned that politicians are failing to consider the wider impact when making promises to clamp down on migration.