A new study by the London School of Economics (LSE) warns that the tightening of legal immigration rules introduced by Rishi Sunak’s government and continued under Keir Starmer could cost the British economy £11-14 billion (approximately $14–18 billion) over the next five years.
According to a report published today, the main losses will be in three key sectors:
Healthcare (NHS): The shortage of foreign nurses, doctors, and support staff has already led to longer waiting lists and increased workloads for British staff. The authors estimate that by 2030, the shortage could reach 70,000 professionals.
Social care: The elderly care sector has already lost tens of thousands of workers from the EU and non-EU countries following the introduction of a minimum salary threshold of £38,700 for skilled visas. This has led to the closure of hundreds of nursing homes and increased costs for local councils.
Hospitality and construction: Visa restrictions for low- and medium-skilled workers have led to acute shortages of chefs, waiters, bricklayers, and roofers. In 2025 alone, the hospitality industry was short of around 120,000 employees.
The authors of the study emphasize that the net fiscal contribution of legal immigrants (taxes minus use of public services) has been positive in recent years, averaging £4–6 billion per year. According to their calculations, a sharp decline in the influx of labor will tip this balance into negative territory by 2027.
Home Secretary Yvonne Cooper said the government was “committed to reducing net migration at all costs” but recognised the need for “targeted relaxations” for certain professions. An updated Shortage Occupation List is expected to be published in January 2026, to which nurses and social care workers may return with a lower salary threshold.
A survey conducted this week by the Confederation of British Industry (CBI) revealed that 78% of British companies are experiencing difficulties in recruiting staff due to immigration restrictions.
Economists warn that if current policies are not adjusted, by 2030 the treasury could lose more than £20 billion, and GDP growth could be 0.4–0.6 percentage points lower than it could be with a more flexible approach to legal migration.