In a move to address concerns over wage disparities and tackle soaring immigration figures, Labour leader Sir Keir Starmer has vowed to scrap the controversial salary discount policy for foreign workers filling job shortages.

The policy, described by Starmer as “absurd” and a “perverse wage-cutting policy,” allows employers to pay those from overseas up to 20 percent less than the standard UK rate for jobs in sectors listed as facing shortages.

Labour has announced plans to reform the shortage occupations list, originally designed to assist struggling sectors such as healthcare in recruiting skilled personnel.

Under a Sir Keir premiership, the party promises to eliminate the ability for employers to pay foreign workers below the UK going rate, while keeping the list intact with reforms aimed at facilitating job opportunities for British citizens in those industries.

During Prime Minister’s Questions, Sir Keir Starmer criticised the current system, citing examples of wage gaps that could make it cheaper for employers to hire from abroad than to employ domestic workers.

The Labour leader highlighted disparities, stating, “Under this Government, a bricklayer from overseas can be paid £2,500 less than somebody who is already here. A plasterer, £3,000 less. An engineer, £6,000 less. The list goes on, it’s absurd.”

Is the discount used as a bad incentive?

A spokesperson for Sir Keir explained that Labour views the 20 percent salary discount as an unwarranted incentive for employers to use overseas recruitment to undercut local wages. The party plans to reform and strengthen the Migration Advisory Committee (Mac) to provide better information about changing skills and labour shortages. Additionally, Labour proposes establishing Skills England, a body dedicated to improving job opportunities and employment prospects.

The spokesperson stated, “We will link the shortage occupations list to skills training, employment conditions, and modernisation so that where employers are recruiting from abroad, there are also plans for getting people into work in Britain.” Drawing inspiration from the Australian system, Labour aims to implement government actions if certain occupations remain on the shortage list for an extended period.

Migration to be reduced to “more normal levels”

Notably, Labour did not set a specific target for reducing migration but emphasised the need to bring numbers down to “more normal levels.” In response, Prime Minister Rishi Sunak defended the Conservative Government’s efforts to address record net migration levels, promising further measures to control immigration.

Reports indicate that Immigration Minister Robert Jenrick has proposed a plan to reduce net migration, including scrapping the shortage occupations list, banning foreign social care workers from bringing dependents, and implementing a cap on NHS and social care visas. The debate over immigration policies is likely to intensify in the coming months as political parties present their visions for the future of the UK’s workforce and immigration landscape.

 

 

 

 

Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.