Written evidence submitted by Adage Digital Ltd (RTS0513)

Adage Digital Ltd is a UK-based software development and digital transformation company that builds, maintains, and manages multiple software solutions for UK and international clients. Since our inception, the company has achieved rapid growth — reaching a turnover of over £720,000 in just two years.
Our success has been directly driven by our highly skilled international workforce, including software engineers, designers, analysts, and sales professionals recruited through the Skilled Worker route.

These individuals are not short-term employees — they are the backbone of our business, our innovation, and our delivery capability to UK clients. Any change to the settlement pathway has an immediate and measurable impact on our sustainability and competitiveness.

1. Effect of settlement pathways on immigration and settlement rates

From our direct experience, clear and reasonable settlement pathways are a decisive factor in whether skilled workers choose to come to — and remain in — the UK.
When employees understand that, after several years of lawful work and tax contribution, they can settle permanently, they are motivated to invest in their future here — through property, family, and deeper community ties.

However, uncertainty about future settlement eligibility has already started to discourage prospective recruits and unsettle existing staff, leading to attrition. We have lost highly skilled software engineers to countries such as Germany and Canada, where the settlement processes are faster, clearer, and tied to measurable contribution rather than arbitrary timeframes.

2. Impact of longer settlement routes on businesses and employers

For an SME like Adage Digital, longer or stricter settlement routes would have severe practical and financial consequences:

• Loss of key staff: Some of our team members — who have worked here for two years — have already begun exploring employment abroad because of concerns about the uncertainty surrounding settlement. These are not easily replaceable roles; it takes 6–12 months to recruit and train staff to the same level of technical competence and cultural fit.
• Disruption to live projects: Many of our software contracts run for years, involving long-term client commitments. Losing key developers or product managers mid-project affects delivery timelines, damages client trust, and risks contract penalties.
• Financial strain: Recruitment costs for replacing skilled workers average £10,000–£25,000 per person, including visa sponsorship, onboarding, and training. Small businesses like ours cannot sustain this level of turnover.
• Reduced global competitiveness: Skilled migrants often bring multilingual and multicultural capabilities that help us win and manage overseas clients. Longer settlement delays would undermine our export and partnership potential.
• Housing and stability risks: Several of our employees have bought houses and settled their families in the UK based on the understanding that they could obtain settlement after five years. They now face financial insecurity, as mortgage renewals, school placements, and relocation planning all depend on their long-term immigration status.

This uncertainty also causes mental and emotional distress, affecting workplace morale and productivity.

3. Impact on migrant households already in the UK

Financial and economic impact

• Skilled workers already contribute tens of thousands in income tax and National Insurance annually, yet remain ineligible for most public benefits.
• Longer settlement routes mean repeated visa renewal fees and Immigration Health Surcharge payments, which can total £15,000–£20,000 per household over a decade — a disproportionate burden on families who already contribute heavily to the UK economy.
• Families hesitate to make major financial decisions — such as home ownership or business investment — due to uncertainty about their right to remain permanently.

Personal and social impact

• Employees and their families face significant emotional strain living with prolonged insecurity. Some have children enrolled in UK schools who now fear being forced to move.
• It is demoralising for individuals who have worked continuously, paid taxes, and lived responsibly to feel their contributions are undervalued or unacknowledged.
• Several of our staff have told us that they no longer feel confident recommending the UK as a destination for skilled professionals — a perception that directly affects future recruitment.

4. Effect on integration

Integration depends on stability and security. Employees who feel their future in the UK is uncertain are less likely to:

• Participate in community activities;
• Commit to long-term volunteering or civic engagement;
• Pursue professional development or upskilling within the UK economy.

Conversely, clear and fair settlement routes encourage belonging and commitment, allowing skilled migrants and their families to become active, engaged members of British society. Longer routes would therefore undermine integration, not enhance it.

5. International evidence

Other advanced economies have recognised that talent retention equals national competitiveness:

• Canada allows permanent residence within 2–3 years of skilled employment through its Express Entry programme.
• Germany provides settlement for Blue Card holders after 33 months, or 21 months with language proficiency.
• Australia offers permanent residency to skilled professionals after 2–3 years of continuous contribution.

Each of these models ties settlement to measurable outcomes such as tax contribution, language proficiency, and consistent employment — not arbitrary waiting periods.

The evidence is clear: longer routes discourage talent; contribution-based systems attract it.

How the New “Earned Settlement” Rules Could Work

Defining “long-term contribution”

Adage Digital supports a fair and transparent contribution-based model, provided it rewards genuine participation and value to the UK economy.

We recommend that “long-term contribution” be assessed based on measurable criteria, such as:

Fiscal and Economic:

• Continuous PAYE and National Insurance contributions for a minimum of 3–5 years;
• Employment in high-value or shortage sectors (e.g., digital, engineering, healthcare);
• Contributions to innovation, exports, or business creation;
• Record of compliance with tax, employment, and immigration laws.

Social and Community:

• Active participation in community or educational programmes;
• Evidence of family integration (UK schooling, volunteering, local engagement);
• Clean legal record and evidence of positive social conduct.

We recommend a weighted system: 70% economic + 30% social/community, ensuring that settlement recognises both professional and societal contributions.

Exemptions

To prevent disruption to existing skilled workers and businesses, exemptions should apply to:

• Workers already in the UK under the Skilled Worker route with continuous employment and tax history;
• Workers in key growth sectors, such as technology, green industries, and healthcare;
• Families with UK-born or UK-educated children;
• Individuals who have invested in housing or businesses in the UK, as removal would cause severe economic and social disruption.

Comparative application of contribution-based systems

• Germany and Australia integrate settlement eligibility within their skilled visa frameworks from the start, giving workers and employers clarity and confidence.
• Canada’s points-based system provides transparency and motivation, encouraging migrants to enhance their skills and community engagement to qualify sooner.

A similar UK model would ensure fairness while maintaining economic dynamism.

Conclusion

Adage Digital’s success story demonstrates how skilled migration drives local growth. Within two years, we grew from a startup to a thriving technology company — directly due to the talent, dedication, and innovation of our international staff.

These employees:

• Pay substantial UK taxes and make no claims on public funds;
• Support UK-based innovation and software exports;
• Have integrated socially, with families, mortgages, and children in British schools;
• Have strengthened the UK’s reputation as a global technology hub.

However, uncertainty over settlement has already led to:

• Loss of key staff to other countries;
• Reduced productivity due to morale and mental strain;
• Recruitment challenges as prospective hires view the UK as a less attractive long-term destination.

Longer or stricter settlement routes would jeopardise this ecosystem.
The UK must not punish those who have already proven their commitment through years of lawful residence, tax contribution, and community engagement.

We urge policymakers to:

• Retain the current five-year route or introduce a contribution-based fast track for skilled workers;
• Protect those already in the UK who have built their lives and livelihoods here;
• Recognise the essential role of global talent in sustaining UK innovation, digital transformation, and economic recovery.

The human and economic costs of uncertainty are too great — for businesses, for families, and for the UK’s long-term competitiveness.

Oct 2025