Raising the salary threshold for skilled workers to get a visa for Britain could cost the nation £25 billion over ten years, according to experts.
The Oxford Migration Observatory stressed the huge predicted bill from hiking the threshold from £26,200 to £38,700 from April 2024.
The baseline fiscal findings in the analysis put the benefit of raising the threshold at £7 billion over ten years, but the cost at £32.5 billion, a net deficit of £25.5 billion.
Observatory director Dr Madeleine Sumption said: “The impacts of higher salary thresholds for skilled workers will depend a fair amount on how employers respond.
“If employers respond by hiring fewer workers, particularly people at the higher pay levels who tend to pay the most tax, the costs to public finances are expected to be larger.
“If on the other hand they still recruit migrant workers and simply pay them more, this has costs to employers but could actually benefit public finances at least in the short run.”
She added: “Over the few months since the salary thresholds were introduced we have seen a decline in the number of workers sponsored, but perhaps not as dramatic as one might have expected given how much salary requirements increased.”
Restricting visas for most international students’ dependants has a small negative impact on the UK public finances.
The benefit was put at slightly over £22 billion, but the cost at £22.6 billion, a net blow of £0.55 billion over ten years.
However, restricting visas for care workers’ dependants has a net fiscal benefit of £29.8 billion, even though it may well worsen staff shortages in care homes, with £59.87 billion costs, and benefits just over £30 billion.
The Oxford experts stressed the change for social workers saved public funds as there was less spending on their children’s education and healthcare.
The new Government backed the rise in the salary threshold for skilled workers despite business chiefs warning that it was making it harder for them to recruit key staff.
Home Secretary Yvette Cooper also asked the Government’s migration advisers to review key sectors “where labour market failures mean there is over-reliance on international recruitment”.
She asked the Migration Advisory Committee to specifically look at the IT and engineering sectors as part of the inquiry, as they had “over a decade or more, been included on shortage occupation lists and relied on significant levels of international recruitment”.
A Home Office spokesperson said: “This government is clear that net migration must come down and that immigration should not be used as an alternative to tackling skills shortages here in the UK.
“While these impact assessments show levels of legal migration will reduce, we are going further by setting out a new approach to link the UK’s immigration, labour market and skills systems to train up our own homegrown workforce, end the over reliance on international recruitment and boost economic growth.”
