Written evidence submitted by Policy Exchange (RTS4842)

There is now a broad cross-party consensus that both legal and illegal immigration into the UK is too high and must be reduced. Since its White Paper in May, this restrictionist consensus has emphatically included the Labour Government. There is a particular worry about the scale and quality of immigration in the so-called ‘Boriswave’ from 2021-2024 following the January 2021 post-Brexit liberalisation of visa rules (with total immigration from June 2021 – June 2024 exceeding 3.6 million), and the wave of potential extra costs when these immigrants might qualify for Indefinite Leave to Remain (ILR), some as early as next year. 

With this potential increase in pressure on the UK’s social infrastructure in mind one of the proposals in the White Paper was to extend the qualifying period for ILR from five to 10 years. This was recently confirmed by the Home Secretary Shabana Mahmood, who has stated that the standard wait will be extended to ten years (with a range of criteria that would lengthen [or shorten] this period):

• Legal migrants who claim benefits for any period less than twelve months would have to wait fifteen years
• People who arrived on post-Brexit health and social care visas would also have to wait fifteen years
• Migrants reliant on benefits for more than 12 months face a 20-year wait for settlement, four times more than the current period and the longest in Europe
• There is also a reduction to three years for applicants who earn £125,140 in the three years prior to applying for settlement (with this reduced to five years for anyone earning £50,270)

This submission broadly welcomes the proposals but will consider the likelihood of it achieving the two goals of a) reducing the attractiveness of the UK as a long-term destination for both legal immigrants and refugees and b) reducing the cost to UK plc of low-contribution immigrants. We will also consider the connection between ILR and citizenship, along with exploring the potential negative impact on integration of extending ILR by five years.

Pre-ILR vs. Post-ILR rights

Indefinite Leave to Remain (ILR) is an immigration status that allows immigrants to settle permanently in the UK. Pre-ILR rights are restricted – permission to stay in the UK is temporary and tied to a specific purpose (such as a work/study/family visa). Visa holders must adhere to certain rules, such as restrictions on employment and study requirements. There are also restrictions on the length of time an individual can be absent from the UK without breaking the continuous residence requirement needed for ILR. Individuals with pre-settled status in the UK are generally ineligible for social housing and homelessness assistance in the UK, due to having a "no recourse to public funds" (NRPF) condition (unless they have a specific “right to reside” or meet certain other criteria). The NRPF restriction is applied to most visa holders, meaning they cannot claim benefits such as Universal Credit (UC), child benefit, and housing benefit. Migrants on a temporary pre-ILR visa are required to pay the Immigration Health Surcharge (IHS) to gain access to the National Health Service (NHS).

Once an individual has ILR, there is no time limit on their ability to stay in the UK, providing long-term security and stability by ending the need for repeated visa renewals. Having ILR, migrants gain a suite of rights and benefits (such as being able to work without restrictions and having access to public funds). As well as being able to study more freely in the UK, in most cases, foreign nationals with ILR are eligible to pay home fees for university (avoiding the payment of higher international student fees).

Moving from pre-settled status to having ILR means that migrants become eligible to apply for social housing (on the grounds of meeting the council’s requirements based on length of residency in the local authority area and need). If one was granted ILR based on a sponsor's undertaking to provide accommodation and maintenance, the individual will not be eligible for social housing under this specific rule for an initial five-year period. Migrants with ILR are exempt from paying the IHS, entitled to free access to NHS hospital treatment on a similar basis to that of an ordinarily resident person. A variety of welfare benefits are available with ILR (depending on meeting other requirements depending on the type of state assistance), as well as council tax reductions. After twelve months of having ILR status, one can apply for UK citizenship. A UK-born child born to a parent who has been granted ILR, may automatically be a British citizen.

The Impact of Lengthening the ILR Qualifying Period

Second, we need to consider the current situation and which groups would be impacted by a lengthening of the ILR qualifying period. EU citizens covered by the post-Brexit arrangements are not impacted by the extension, nor are partners of British citizens. This is also the case for people on the Hong Kong British National Overseas (BNO) visa, who will continue to qualify for settlement after five years (but they would need to have the £12,570 minimum earnings and meet the other new “minimum mandatory requirements” such as B2 English). However, newcomers who enter the UK through conventional visa routes – including post-Brexit migrants who work in the health and social care sectors – face a longer period before being granted settlement rights. For those who are dependent on some form of welfare for more than twelve months, this will be as long as two entire decades.

What, if anything, can we learn from experience elsewhere in the developed world when ILR, or its equivalent, has been lengthened? Has it had any impact on reducing numbers or saving money? There are two other comparable countries - Japan and Switzerland - that have ILR qualifying periods of 10 years. Most European countries have qualifying periods of five years, as the UK does today, though some, such as Denmark, range between five and 10. Neither Japan nor Switzerland have raised their ILR qualifying period in recent decades so it is not possible to draw any lessons from the increase. Switzerland has a two-tier ILR qualification period, rather as proposed for the UK in the White Paper, with EU citizens and high skill/income contributors waiting only five years and others having to wait 10 years when they must prove some special relationship with Switzerland. 

The expert consensus in the UK appears to be that lengthening the qualifying period does not act as much of a disincentive to come, though the evidence is far from conclusive. Most of the relevant research concerns the settlement status of refugees.  A paper by Danish academics found that tightening eligibility for settlement for refugees by requiring regular employment and higher levels of fluency in Danish had the opposite of the intended effect and caused refugees to work less because they feared they could not meet the new requirements.[1] However, a paper by Swedish academics had broadly the opposite findings. It found that when Sweden changed its rules to require, among other things, full-time employment to qualify for settlement it had a positive effect on incomes and employment of the relevant group.[2] 

Common sense would suggest that, given the enormous advantages of settlement, those countries that make it easier to acquire would - all other things being equal (which they rarely are) - attract more immigrants and refugees. Although many immigrants and refugees have a very clear idea of where they wish to go because of relatives, relevant language ability or potential employment, there is also a widely accepted notion of “shopping around” for the easiest landing place. 

When, in 2013, Sweden changed its rules and decided to grant all Syrian asylum seekers automatic permanent residence rather than, as hitherto, temporary residence, the number of applications doubled in the period immediately after the policy change with fewer Syrians applying in other European countries.[3]  The fact that making it easier to acquire settlement is likely to increase immigration does not mean that making it harder would decrease it, though presumably it would create some disincentive especially if other comparable countries are not extending their qualifying period.

This is not, however, the end of the argument. There is still the question of the potential savings from an extension (see below). There is also the issue, as discussed in the White Paper, of tightening the criteria for ILR qualification with a view to both restricting inflows in general but also ensuring those who do come will be people able to contribute more to the future well-being of the country. Tightening the criteria for settlement and lengthening the default qualifying period should not be seen as an either/or – rather, they go hand in hand. A longer default qualifying period of 10 years acts as an incentive to qualify for the early qualification exemption and can be used as a lever to promote greater contribution and faster integration of immigrants.

So, what should those early qualification criteria look like? Shabana Mahmood, the Home Secretary, has talked about a points-system and “earned settlement”. Her list includes: being in work, not claiming benefits, speaking English well, and not having a criminal record. Those should all be considered a minimum requirement for earned settlement. Mahmood has also spoken more vaguely about “giving back” to the community by volunteering. We do not think this is a good idea, as volunteering is too easily gamed and it would turn into a box-ticking exercise. Volunteering could also be undertaken within the ethnic (and religious) minority community that the immigrant is from – therefore being of no integration benefit. We propose two alternative ways of using earned settlement to improve integration. First, all those applying for five-year settlement should have to produce two letters of endorsement from friends or neighbours who are UK nationals and not part of the applicant’s ethnic or religious group (and at least one of them should be born and raised in the UK).

Second, ILR should be dependent on all working-age adults in a household being able to demonstrate continuous economic activity, with exemptions for those who are pregnant or caring for children under three years of age, and some ability to speak English. This would make it harder for women from more traditional cultures to remain in the home unable to speak English and cut off from British society. Also, for bringing in a partner from abroad, there should be a minimum age of 24 and the partner living in the UK (usually the husband) must have a history of not being reliant on welfare and ought to be expected to put in place a financial guarantee.

The longer qualifying period of 10 years should be seen as a backstop for those who do not meet these settlement criteria rather than an end in itself. But there will be the added benefit from a restrictionist point of view that there is an extra five years in which people can be easily removed from the country if they fall below salary thresholds or commit crimes - costing the taxpayer considerably less. 

How much less is hard to calculate. The possible savings from extending ILR by five years obviously depends on estimating how many people would have been drawing on the welfare and social housing systems, and using family reunion, and are now not able to do so  for a few more years. The largest group are likely to be those coming in on family visas. The White Paper calculated that for those people arriving on family visas in the period 2010-2018 fully 90% were granted settlement. By comparison only 28% of those coming on work visas in that period ended up with settlement. In 2024, roughly 86,000 people arrived on family visas, 370,000 on work visas and 40,000 were granted refugee status. Assuming a 90% settlement figure for family visas, 30% for work visas and nearly 100% for refugees, that means about 250,000 will be getting settlement in 2029 without an extension. If you add in the higher figures, at least for work visas, in 2022 and 2023, the total ‘Boriswave’ number qualifying for ILR in the next few years will be closer to one million migrants.

Costs of ILR

There is a big difference in the cost to UK PLC between an individual having ILR and not. As noted, those without it have No Recourse to Public Funds (but can use the NHS if they pay the surcharge and some public services). After ILR is achieved it opens not just the welfare system but social housing and the right to bring in some family members.

There are two sides to the extension in cost terms:

a) There is the loss of income from people who must pay non-trivial sums to go on extending: £1k for every 2.5 years plus the annual NHS health surcharge of £1,035 per year for adult immigration and visa applications. For students, their dependants, and those on a Youth Mobility Scheme visa (and immigration and visa applicants who are under eighteen years of age at the time of application), it is £776.

b) The UK is saving potentially 5 years of unrestricted access to common forms of welfare assistance, social housing, and public services in the spheres of healthcare and education. This includes no longer paying the NHS immigration surcharge, being able to apply for council housing (if other eligibility requirements set by the local authority in question are met), and being eligible for welfare benefits such as Universal Credit (UC).

The new tougher criteria for settlement after just five years means that a significant proportion of the 1m heading for settlement will be self-supporting and, in some cases, making a positive fiscal contribution. But several hundred thousand will not be. The costs of the ‘Boriswave’ deluge of migrants – newcomers who arrived following the January 2021 post-Brexit liberalisation of visa rules - being granted are potentially significant due to its generally low-wage and low-skilled nature. As observed by Neil O’Brien OBE (Conservative MP for Harborough, Oadby and Wigston), the sheer volume and questionable quality of the ‘Boriswave’ have contributed towards the plummeting of the earnings of Indian and Nigerian nationals (compared to all UK nationals).[4] Policy Exchange’s ‘Portrait of Modern Britain’ report published in October 2024 ranked the Indian ethnic group first on its Economic and Educational Index (EEI) – well ahead of the white-British majority.[5] This high-ranking status for the Indian ethnic group has been compromised by the lack of post-Brexit quantity and quality control in regards to legal immigration. Relevant national and local institutions should also be aware of the rising intra-ethnic tensions between well-established British Indians and recently-arrived ‘Boriswave’ Indian nationals in cities such as Leicester.

The Government could, and should, change the benefits associated with ILR. The single most important aspect of settlement comes with no taxpayer cost attached to it all, it simply provides peace of mind that you can stay forever. As Brian Bell, head of the Migration Advisory Committee, told the Home Affairs select committee “it increases your power and confidence”. But why should it also mean automatic access to the welfare state and social housing when these are under such pressure? In the US, an individual needs to wait another 5 years after receiving a green card before he/she can draw on the US welfare system. We should do the same here though by removing the requirement to pay the visa extension charge or the NHS surcharge. 

ILR, refugee resettlement, integration

The existing research on the impact of ILR policies on integration, as documented earlier, is mixed at best. The most powerful predictors for integration are ‘pre-existing’ – rather, it is the socio-economic resources and socio-cultural values that migrants have on arrival: level of English language proficiency, financial resources from the country of origin, familiarity with British legal, political, and social norms, perspective on British history, heritage, and traditions, and orientation towards Western liberal democracy. Integration can be promoted within the process of settlement (such as letters of recommendations/character endorsements from ‘outgroup’ pillars of the local community) and a high level of economic self-sufficiency and civic integration should be demonstrated ahead of naturalisation and becoming a UK national. But processes of integration can take place organically – if not seamlessly – if there is a high degree of cultural compatibility complemented with solid ‘tools’ for integration (such as solid English language skills).

The UK Government’s decision to adopt a refugee policy in which community sponsorship is given a prominent place is to be welcomed – though with some reservations. In Policy Exchange’s 2023 report ‘The Future is Safe and Legal’, the value of community and diaspora sponsorship in the context of refugee resettlement was emphasised (with a particular focus on the Canadian system and the UK’s ‘Homes for Ukraine’ scheme for Ukrainians fleeing Russia’s military invasion).[6] The shift to community sponsorship (within government-set limits) as the main framework for refugee resettlement is being justified by the UK Government as a change that will be less costly for the State as it entails greater local and voluntary sector involvement which can improve integration outcomes for newcomers. Community sponsorship usually entails group-based organisations/associations partnering with the UK Government and local councils to find direct support for refugees - such as securing in-the-community accommodation, provision of culturally/religiously-sensitive services, and forms of financial assistance. These groups can also help with finding employment opportunities in the local area. Well-integrated local organisations/associations with cultural expertise which are rehoming refugees in forms of non-state-financed accommodation and providing them with organic forms of financial, emotional, social support, can be much-valued civic assets in the context of a less statist model of providing sanctuary – a more communitarian approach which can reduce the burden for British taxpayers at large.

However, making community sponsorship the norm - at a time when Pakistanis represent the most common nationality among asylum applicants – does risk the expansion and entrenchment of segregated Mirpuri communities in certain parts of the country (especially in former mill towns in northern England). South Asian nationals (Pakistanis, Bangladeshis, and Indians), rank highly when it comes to the nationality of asylum claimants.[7]  Many ‘Boriswave’ migrants entered through the UK's lax visa system and then claimed asylum - showing that significantly tightening the visa rules is an integral part of reducing asylum claims.

The chances of community sponsorship leading to better integration outcomes are heightened if the existing migrant population in question is well integrated itself. Despite showing encouraging signs of social mobility and socio-economic advancement, this is not necessarily the case with sizeable Mirpuri and Sylheti Sunni Muslim communities in the UK (especially when compared to much smaller populations of well-educated and professionalised Afghan Shia Hazaras in cities like Oxford and Southampton). Community sponsorship is certainly – overall – a preferable alternative to asylum seekers being rehomed in state-funded accommodation such as hotels (which deprives established communities of much-treasured civic assets of belonging and interaction, especially for special occasions such as wedding receptions, anniversaries, and birthdays) and languishing in houses in multiple occupation (HMOs) at great cost to the British taxpayer. However, the process of community sponsorship must be robustly regulated by central government to ensure it is not exploited – especially by ethnic-based enterprises in ‘economic enclaves’ which are keen for cheap foreign labour and clannish baradari-style networks that may seek to circumvent conventional family-visa routes by bringing relatives into the UK through the back door.

Conclusion

This submission is supportive of the UK Home Secretary’s recent announcement to extend the normal qualifying period for ILR and the granting of settlement rights. A longer default qualifying period can act as an incentive to qualify for the early qualification exemption – essentially a lever to promote greater social contribution and faster economic integration of immigrants. Those applying for settlement via early ILR qualification exemptions should be expected to produce two letters of endorsement from friends or neighbours who are UK nationals and not part of the applicant’s ethnic or religious group (and at least one of them should be born and raised in the UK), as well as being able to demonstrate a high level of English language proficiency as well as an employment record which suggests they will be economically self-sufficient in the longer term. These processes should be designed to prioritise social integration and socio-economic advancement ahead of the possibility of granting settlement rights – which is ultimately a stepping stone towards applying for UK citizenship and naturalisation.

The Home Secretary also deserves credit for bringing the UK somewhat in line with the ‘Danish model’ by committing to a temporary model of sanctuary – reviewing refugee status on a more regular basis by closely monitoring levels of safety in countries of origin. The UK Government’s intention to make community sponsorship the norm in terms of refugee settlement is also a step in the right direction. It provides greater opportunities for civic associations, well-rooted in local communities, to make the most of their cultural expertise and play their part in providing accommodation, employment opportunities, and social/psychological/emotional support to refugees. This could lead to improved integration outcomes and reduce the load on the State – especially in terms of providing social housing, welfare benefits, and mental health assistance. However, this must be robustly regulated to ensure it is not exploited by social networks and businesses/enterprises in lesser-integrated communities who may seek to bypass conventional family and work visa routes through the community sponsorship method.

Dec 2025