2 March 2026

The latest Home Office immigration statistics released on 26 February 2026 show a continued fall in net migration following its post‑Covid peak in 2023.

This decline is partly driven by a reduction in grants of visas to skilled workers down 36% in the year to December 2025 (excluding those in health and care professions) compared to the previous year.

These changes are largely as a result of Labour’s immigration restrictions introduced in 2025. In July 2025, Labour raised the Skilled Worker minimum skill threshold back to degree level-equivalent up from A-Level equivalent, reversing the post‑Brexit relaxation of this threshold. It also closed the route to new overseas care workers, removing a major contributor to high net migration between 2021 and 2023.

Other routes have also seen a reduction, including the Family route which saw a reduction of 22% compared to 2024. This is in part due to the increase in the earning threshold for British and settled people to bring their overseas family members to the UK, which was introduced under the previous Conservative Government and retained by Labour.

Analysis

In seeking to reduce net migration and reassure voters concerned about immigration levels, Labour has adopted a restrictive approach that risks undermining economic growth. Tighter controls on skilled migration are making it harder for businesses to address skills shortages, particularly across key sectors, potentially damaging the UK’s long‑term economic prospects.

Although Labour’s May 2025 immigration white paper promotes domestic recruitment and training, these proposals remain at consultation stage and are unlikely to deliver a sufficient skills pipeline in the near term. Successive policy changes have narrowed access to overseas labour before viable domestic alternatives are in place.

Labour’s growth ambitions therefore risk being undermined by competing priorities. Further proposals, including the earned settlement reforms announced in November 2025, which extend the residence period before settlement, may deter highly skilled, mobile workers from choosing the UK over comparable economies offering greater certainty and a more attractive immigration pathway.

Sponsor licence statistics – compliance action against sponsors at record high

Businesses are also feeling the impact through increased compliance enforcement. The last quarter of 2025 saw the highest number of business sponsor licence suspensions and revocations on record (since 2012) – at 1,600 and 1,516 respectively.

Anecdotal evidence indicates that, when non-compliance is identified, Home Office decision makers are sometimes fully revoking the relevant licence, rather than first suspending the licence and giving the business a chance to address the identified issues.

There was also a more than 30% increase in the number of civil penalties issued to businesses in 2025 compared to 2024.

Alongside heightened scrutiny of new applications, particularly for start‑ups and pre‑revenue companies, and sponsorship rules introduced in early 2025 which prevent skilled migrants and entrepreneurs from investing in the businesses they work for or establish, these trends towards increasing restriction and enforcement may discourage investment, innovation and job creation and undermine the government’s search for much-needed economic growth.