Monday 2 June 2025

Advanced manufacturing is a sector identified as being prioritised for growth in the UK. The current government introduced a Green Paper for its Industrial Strategy, ‘Invest 2035’, aimed at capturing the growth potential of eight key sectors, including advanced manufacturing. However, as widely reported, one of the greatest challenges to growth is a significant skills shortage. With the recruitment of overseas nationals being considered as essential to filling these gaps, we provide an overview of the implications of the government’s recently published Immigration White Paper on the advanced manufacturing industry.

The White Paper sets out the government’s intention for migration policy reforms, which, whilst mainly targeted at reducing overall net migration, concurrently demonstrates a focus on attracting migrants for very highly skilled roles.

Skilled Worker sponsorship
The Skilled Worker route is one of the principal means through which foreign nationals can obtain immigration permission to work in the UK, allowing sponsoring businesses to recruit internationally to fill vacancies, where the role meets certain skills and salary thresholds. The White Paper has announced a number of potentially significant changes to this category, including to the skill level, salary and shortage occupation requirements.

Skill level
One of the requirements of the Skilled Worker category is that applicants must meet a minimum skill level under the Regulated Qualifications Framework (RQF). Currently, this is set at RQF 3 (A-level requirement), but the government has announced that it will be increased to RQF 6 (degree level)), although exceptions will be carved out for certain occupations in shortage. The skill level is determined by identifying an applicable Standard Occupational Classification (SOC) code for the role.

Many of the SOC codes applicable to manufacturing related roles are skilled to at least RQF 6 and will therefore be unaffected by this change. Relevant RQF 6 SOC codes include:

• 1121 – production managers and directors in manufacturing;
• 3114 – building and civil engineering technicians; and
• 2121 to 2129 – engineers (civil, mechanical, electrical, electronics, production and process and aerospace engineers, engineering project managers and engineering project managers not elsewhere classified).

Accordingly, at least in the short-term, the potential effects of changes may be minor. There are, however, a number of SOC codes associated with the advanced manufacturing sector which will fall short of the new skills requirement. These include:

• 3114 – building and civil engineering technicians
• 3113 – engineering technicians
• 5213 – welding trades
• 5250 – skilled metal, electrical and electronic trades supervisors

For businesses that are currently heavily reliant on overseas recruitment for roles below RQF 6, the impact will hit much harder. Those wishing to recruit for lower skilled roles in future will only be able to do so on a temporary basis, and under specific circumstances. The role must be listed within a new Temporary Shortage List (TSL), it may be necessary to show that the following requirements are satisfied:

• there have been long-term shortages; and
• the Migration Advisory Committee (MAC) has advised it is justified.

In addition, employers will need to show that there is a workforce strategy in place (detailing ‘steps to be taken on skills, training and broader conditions, as well as engagement of the economically inactive domestic labour force’) as evidence of their commitment to increasing recruitment from the domestic workforce. Whilst this will take time to implement, the government has advised that the TSL will contain occupations that the MAC has recently considered to be in shortage, or which are crucial to the delivery of the UK’s Industrial Strategy.

It is likely that many roles within the advanced manufacturing sector shall be placed on the TSL. The MAC 2024 report listed manufacturing as one of the sectors with the highest proportion of vacancies linked to skills shortage (42%) and as covered above, advanced manufacturing has been identified as one of the eight key growth areas as part of the UK’s Industrial Strategy. Engineering and manufacturing roles have also historically occupied a place on the Home Office’s shortage occupation lists and it seems likely that this trend will continue. The MAC 2025 report on IT and Engineering also identified the need for the key growth sectors to continue expanding their workforces, rather than simply maintaining them, to meet the government’s growth ambitions.

The practical implications for businesses with shortage occupation roles could be severe and shall require additional time and costs to adjust and align their business models with the new requirements. Given the government’s overall aims to support this sector, one would hope that relevant support shall be in place for businesses so that these workforce strategies are not seen as an obstacle to growth.

Salary requirement
The wide-ranging impacts of the White Paper may also extend to salary threshold increases. Currently, Skilled Workers must be paid a gross annual salary of at least £38,700 and the ‘going rate’ of the SOC code selected for their role, although certain discounts are available if a role qualifies under the current ‘immigration salary list’. In the White Paper, the government advises that the salary thresholds will rise. However, we may see similar salary discounts for roles within the new Temporary Shortage List, as is the current position.

The option also remains open to businesses to take advantage of the reduced salary thresholds that apply, for instance, to applicants with PhDs in STEM subjects, which may be relevant to the advanced manufacturing sector, or to ‘new entrants’ to the labour market. The latter includes those aged under 26, studying, having recently graduated or doing certain professional training. This option could be particularly pertinent for businesses looking to fill engineering roles, as the MAC observed that migrant engineering professionals are often of a younger age demographic.

Additional challenges for businesses
The White Paper also announced that the Immigration Skills Charge (ISC) will increase by 32%. For most companies, the ISC is already one of the largest immigration-related expenses, costing up to £1,000 per worker per year. The increasing cost of sponsorship is, therefore, likely to have a significant negative impact on businesses that rely on overseas recruitment for growth.

Across the board, employers will also be incentivised to invest in boosting domestic talent, and those who fail to invest in skills training for the resident workforce may be restricted from sponsoring overseas workers. Although the White Paper does not elaborate further on exactly what businesses will be required to do to uplift domestic talent, it is possible that workforce strategies may be expanded to RQF 6 roles in future. Penalties for non-compliance could be particularly harsh for the advanced manufacturing sector where skills shortages are already widespread and reliance on foreign workers is prevalent.

Alternative immigration options for workforce challenges
In view of planned restrictions to the Skilled Worker route, we may see higher utilisation of other UK immigration routes to fill ongoing shortages. For instance, certain Youth Mobility routes, which typically allow nationals of select countries aged 18-35 to work in the UK for two to three years without requiring sponsorship, could help fill short-term vacancies.  Recent reports also indicate that these routes may be expanded to include more qualifying countries. We have seen this development in recent years with the launch of the India Young Professionals Scheme. This scheme could be particularly relevant for the advanced manufacturing industry as India has one of the fastest-growing manufacturing industries, and a high number of its qualified engineers seek to relocate abroad. The Global Business Mobility route could also see an increase in use, as the government has announced further flexibility for sponsorship.

UK immigration law and policy are subject to constant changes and consultation, with the White Paper being the most recent development in the area. Whilst it is hoped that changes to the Skilled Worker route would not significantly impact the business sector as a whole, it is worth noting that for those with heavy reliance on overseas recruitment to fill occupations that are in shortage, a re-think of recruitment practices in the long-term may be required, particularly prompted by the government’s increase of sponsorship costs, increase of required skill and salary levels for sponsorship and imposition of potential penalties for those who fail to invest in domestic talent. It is certainly positive to see the government focus on industry growth, but careful consideration of the proposals is required to ensure they do not have the unintended consequence of adversely affecting the businesses they aim to support.

Get in touch
If you would like to discuss your company’s immigration strategy or the implications of the White Paper with one of our lawyers, please contact enquiries@lauradevine.com.