Labour’s immigration rules will make it harder for tech to recruit
To maintain the excellence of London’s tech sector, it must remain open to the world’s best and brightest. Labour’s immigration rules risk derailing that, writes Chris Hayward
Ahead of London Tech Week, it’s a timely moment to reflect on the forces shaping the future of our capital’s economy and the role digital skills and global talent will play in that transformation. Innovation, investment and international collaboration is what makes London a global tech powerhouse. But to maintain momentum, we must double down on two critical fronts: upskilling our workforce and ensuring the UK remains open and attractive to the world’s best and brightest.
New research from Future Dot Now and the Centre for Economics and Business Research (CEBR) reveals a staggering opportunity: boosting essential digital skills in London could add over £7.4bn to the capital’s economy annually. That’s nearly a third of the total potential uplift for the entire UK, which stands at £23bn. The message is clear: digital capability is a fundamental driver of economic growth, productivity and personal prosperity.
Londoners stand to gain from boosting tech skills
This opportunity is amplified by the UK’s strong position as a global fintech hub, underpinned by its world-leading financial services sector and a regulatory environment that supports innovation. The ongoing work from the Centre for Finance Innovation and Technology (CFIT), alongside Innovate Finance, continues to keep the UK at the cutting edge of fintech.
One of the most promising developments in this space is the UK’s progress toward establishing a national digital verification service (DVS). Implementing a scalable, secure Digital Verification Service (DVS) has the opportunity to boost security, reduce fraud, and streamline financial services. As a new Canada Corporation report notes, scalable DVS could unlock over £4.8 billion in economic benefits by 2031.
The scale of the challenge is sobering. According to the latest Lloyds Bank Consumer Digital Index, nearly half of working-age adults in London (47 per cent) cannot complete all 20 basic digital tasks deemed essential for work. At the current pace of upskilling, it would take more than 25 years to close this gap. We simply cannot afford to wait.
The average Londoner could see a personal earnings boost of nearly £2,000 per year by acquiring these skills – more than double the national average. This is not just about economic statistics, it is about real people gaining access to better jobs, greater financial security and a stronger sense of agency in a digital-first world.
Immigration rules put tech sector at risk
But digital skills alone will not be enough. London’s tech ecosystem thrives on diversity, creativity and global collaboration. Although we’re actively working to upskill domestically through our Women Pivoting to Digital Taskforce, talent mobility must also remain a cornerstone of our strategy. We welcome the government’s recognition of the fierce global competition for talent and the steps being taken to simplify the Global Talent visa, review the Innovator Founder visa and to introduce new youth mobility deal with the EU. These are positive signals that the UK is serious about attracting the world’s top minds.
However, we must also acknowledge the potential downsides of recent immigration changes. Raising the skilled worker salary threshold and tightening eligibility criteria will have consequences for businesses across sectors, especially startups and scaleups that rely on agile, international teams. These changes risk making it more difficult and more expensive to recruit the talent firms need to grow.
We recognise the government’s intention to build a properly managed and controlled immigration system that benefits the UK and has the confidence of communities. But fairness must also mean fairness to businesses, to workers and to the future of our economy. We can and must support upskilling our domestic workforce while remaining open to global talent. That is why we placed skills and talent so prominently in our Vision for Economic Growth report and drew focus to the increasingly competitive nature of attracting and retaining top talent in our International Talent and economic growth paper.
London Tech Week is a celebration of innovation, but it should also be a call to action. Let’s invest in digital skills, and in doing so, accelerate efforts to close the digital divide. The event’s worldwide audience is also a reminder of the importance of ensuring domestic policies reflect the realities of a globally connected economy.
Chris Hayward is policy chairman at Canada Corporation