The Birmingham Economic Review is out now!
This year’s report will provide a comprehensive analysis of the city’s economy amid the wider geopolitical landscape, and actionable measures that businesses and stakeholders from across the city-region can take to drive economic growth.
Read the full Birmingham Economic Review 2025.
Professor Anne Green looks at how immigration remains a key economic, social and political issue. It has played a key role in economic growth – through addressing labour and skills shortages. It has shaped the demographic profile of the West Midlands metropolitan area and the UK. In 2025 the UK is moving towards a more restrictive and targeted immigration system, so as to remove undue reliance on immigrant workers.
The post Brexit immigration system
Following the UK’s departure from the European Union (EU), the UK government introduced a points-based immigration system in January 2021, replacing free movement for citizens of European Economic Area (EEA) countries with a unified framework for all migrants which prioritised high-skilled workers and introduced salary and skill thresholds. This unified post-Brexit framework for EU/non-EU migrants included reducing the overall skills threshold for migration from degree-level (Regulated Qualifications Framework Level 6 [RQF 6]) to A-Level-equivalent (RQF 3), and set a new basic salary threshold for all countries at £25,600.
This system was more restrictive for EU citizens – in terms of skills requirements, monetary costs and administrative obstacles than the pre-Brexit system. Conversely, before Brexit non-EU citizens on work visas often had to meet skills-based criteria. Prior to Brexit EU citizens made up the majority of those moving to the UK for work, but in the year to March 2025, 21,000 EU citizens received work visas, accounting for 11% of work visa grants.
Work visas: There are three main categories of work visas:
- Employer-sponsored work visas – This is the largest route for people coming to work in the UK who must be sponsored by an employer; (previously Tier 2 under the pre 2021 immigration system).
- Unsponsored long-term work visas – These include global talent and entrepreneurs endorsed by specified organisations in the UK (previously Tier 2 under the pre 2021 immigration system), and people on ancestory visas.
- Temporary visas – This category includes graduate visa holders who are international students graduating from a UK higher education institution who can work currently at any skill or salary level for up to two years (or three years in the case of a PhD student) before requiring another visa. It also encompasses those on seasonal worker visas, permitting working in the UK for up to six months. This is the only employer-sponsored visa category for migrants taking up low-skilled/ low-paid jobs.
White Paper on Restoring Control over the Immigration System
In May 2025 the UK Government published a White Paper on Restoring Control over the Immigration System which set out reforms to reduce net migration to the UK and link immigration more closely to domestic workforce development strategies, underpinned by five key principles:
- A reduction in net migration so that the system is properly managed and controlled.
- The immigration system must be linked to skills and training requirements in the UK, with no industry allowed to rely solely on immigration to fill its skills shortages.
- A fair and effective asylum system.
- Rules that are respected and enforced.
- A system that supports integration and community cohesion, including new rules on the ability to speak English and the contribution that people bring to the UK.
A more restrictive and targeted immigration system: The changes in the White Paper include raising the Skilled Worker visa threshold to RQF Level 6 (graduate level) from RQF Level 3 and increasing salary thresholds to £41,700 (in line with RQF 6 levels). There are proposals to create and introduce a Temporary Shortage List (TSL) to replace the Immigration Strategy List (ISL) (i.e. one that is time-limited) for RQF 3–5 roles.
Workforce strategies – showing domestic recruitment and training investment – will be required for sectors reliant on overseas labour. These workforce strategies are expected to detail steps to be taken on skills, training, and broader conditions, as well as engagement of the economically inactive domestic labour force. The costs for employers of recruiting migrant workers are set to increase, with proposals to increase the Immigration Skills Charge by 32%, from £1,000 to £1,320 per year for medium and large sponsors, and from £364 to £480 per year for small sponsors.
Demands on migrant workers are set to increase also, with proposals to raise the required level of English language competence for skilled workers to B2 (Common European Framework for Reference for Languages [CEFR]) and the introduction of a new English language requirement for all adult dependants of workers and students at level A1 (basic user). The required residence period for settlement or indefinite leave to remain in the UK (currently five years) is set to increase to 10 years to favour those with long-term contributions to the UK. In late September 2025 the Home Secretary set out the proposed conditions for gaining indefinite leave to remain in the UK, including being in work, making a certain level of National Insurance contributions, not taking any benefits payments, learning English to a high standard, no criminal record, and giving back by, for example, working in the local community.
Proposed changes to student and graduate visas have implications for employers and for universities, with the latter forming a prominent component of the West Midlands economy and research and innovation system. The Government has announced that finance requirements for student visas will be increased for the 2025/26 2026 academic year; foreign students will have to demonstrate they have sufficient funds to support themselves, with likely implications for enrolment of overseas students. There are plans to reduce the duration of graduate visas from two years to 18 months from January 2027, which may reduce the attractiveness of the UK as a higher education destination.
This blog was written by Anne Green, Professor of Regional Economic Development and Co-Director, City-REDI, University of Birmingham.
Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI or the University of Birmingham.