Robert Jenrick has unveiled new tax cuts for firms hiring British workers, as Reform UK proposes an Employers' Migrant Labour Levy to reduce the benefits bill and end reliance on foreign labour. Businesses hiring migrants will face higher taxes and extra recruitment costs if Nigel Farage wins the next election. Reform's economic spokesman warned firms that the era of cheap foreign labour will end, confirming that millions of low-wage migrants will be told to leave when their visas expire.
How the Levy Will Work
Reform UK will introduce a graduated fee that businesses will pay for each foreign worker they employ. The cash generated will go towards slashing employers' National Insurance contributions for British workers. Mr Jenrick said: "For more than 20 years now, we've had British workers coming second – undercut by cheap migrant labour, which drives down wages and our people's quality of life. The experiment of letting in millions of low-wage migrants – as millions of Brits languish on benefits – has failed catastrophically. Reform will end it."
Under the plans, business chiefs face higher costs if they want to recruit lower-paid foreign nationals. Specialists and higher-paid foreign employees would not be subject to such a steep rate, to avoid penalising companies for hiring top-tier talent from overseas. Explaining his policy, the former immigration minister told journalists: "For illustrative purposes, suppose it was set at around £3,750 for a full-time worker on the National Living Wage. And it tapered down to £1,500 for someone earning around £50,000. And £500 for someone earning around £100,000."
Revenue and Impact
There are around 3.6 million non-EU workers in Britain, most earning the median income or less. The weighted average levy on them would be around £2,900, meaning the levy will raise £10 billion from non-EU migrants on PAYE alone. Including contractors and the self-employed, it would raise £11.2 billion from this group alone. Mr Jenrick said charging businesses more to hire foreign workers would help Britain slash the ballooning benefits bill. A recent report by former health secretary Alan Milburn found that Britain's youth unemployment crisis is costing the country £125 billion a year, while Britain spends about £334 billion on welfare.
He said: "It is high time the British Government put British workers first. And migrant labour second. Right now, if you're running a care home, it makes no difference to you whether you hire a British citizen or a foreign worker… But it makes a huge difference to our country. If the migrant is hired, the taxman collects £7,000 in taxes. But ends up paying the British candidate not hired around £8,000 on universal credit. If the British worker was hired instead, the £7,000 in tax would still be paid. But the £8,000 in benefits would be saved. Under Reform, because of this levy, businesses will have to take responsibility for the costs and benefits their hiring decisions have on everyone else."
Transition and Future
Reform UK admitted the amount of money generated from the levy will fall as the party's immigration policies begin to bite. Zia Yusuf, Nigel Farage's home affairs spokesman, has vowed to scrap indefinite leave to remain and replace it with five-year visas, accompanied by much higher salary thresholds, mandatory fluency in English, and stricter good character requirements. Foreign workers will only be able to bring their families with them if they earn enough money. Reform will also increase the minimum qualifying period for British citizenship to seven years.
Mr Jenrick added: "This policy will in no way delay the exit from Britain of migrants we don't need. The levy is designed to help businesses transition to the new world where cheap foreign labour won't be on tap after Reform don't renew the visas of millions of low-skilled migrants. So: yes, the tax base for the levy will rapidly shrink as Reform's migration policies take effect. But the revenue gains from this reform won't. Because if a low-wage migrant leaves – even one paying the levy – and a British worker takes that job from receiving Universal Credit, the Exchequer will gain nearly £10,000 per year. As long as just four in 10 of the vacated roles go to Britons coming off welfare – less than half – the package will continue to more than pay for itself."
