Raising Minimum Wage for Migrants in the UK Could Cost Treasury Millions

London – Economics and Public Policy

UK government immigration advisors have warned that raising the minimum wage required for migrants could lead to a loss of hundreds of millions of pounds annually for the public treasury, as the government seeks to balance tightening immigration policy with reviving a sluggish economy.

A report from the Migration Advisory Committee (MAC) explained that significant increases in salary requirements - beyond periodic adjustments to keep pace with wage growth - could deprive the UK of migrants who positively contribute to public finances through taxes and the labor market.

Financial Cost Indicators

The current system requires most foreign workers to earn £41,700 annually to obtain a work visa, with higher thresholds for certain professions. However, the committee estimated that raising this threshold to £52,500 could cost the treasury up to £710 million over the tax lifetime of each annual cohort of arrivals.

Political Debate and Public Pressure

These warnings come amid rising public concern about immigration, with polls showing it as a top priority for British voters, while the ruling Labour Party faces increasing political pressure from anti-immigration parties.

Former Home Secretary Yvette Cooper defended tightening salary conditions, arguing that raising thresholds is necessary to ensure foreign labor does not become a low-cost alternative to fair wages in the local market.

Alternative Recommendations from Experts

Instead of raising the general wage threshold, the immigration committee recommended the government retract a previous decision to raise the minimum wage for certain professions to the median salary level, arguing that this level is too high to achieve the primary goal of protecting British workers from unfair competition.

The committee chair, Brian Bell, an economics professor at King’s College London, pointed out contradictions in the current system, where a foreign worker can be brought in for a mid-paying job while higher-paying leadership roles are prohibited, describing this as a clear imbalance in standards.

Additional Changes to Immigration System

The committee also recommended abolishing the Scale-Up visa route for rapidly growing startups, indicating that it is used minimally and adds unnecessary complexity to the system.

Since Shabana Mahmood took over as Home Secretary, the government has moved towards tightening immigration rules, including proposals to extend the residency period required for permanent residency and tightening asylum conditions.

Immigration Numbers Decline

Indeed, official data showed that net immigration has decreased from a peak of 944,000 in 2023 to about 204,000 by mid-2025, despite the continued flow of asylum seekers via small boats.

A Delicate Balance

The report emphasizes that immigration is not just a numbers issue, but a delicate trade-off between financial, economic, and humanitarian considerations. For example, while migrant partners may represent a net financial burden compared to citizens, experts stressed the importance of not overlooking the humanitarian aspect related to family reunification.