Reform UK has pledged to introduce a new tax on companies hiring foreign workers, in a move the party says would force firms to put “British workers first, migrant workers second” and reduce National Insurance paid by employers on their British staff.
The right-wing party, led by Nigel Farage, announced the policy ahead of a crucial by-election in Makerfield on Thursday. Treasury spokesman Robert Jenrick said it would end “the cheap migrant labour racket once and for all.”
If elected, Reform would reduce the rate of NI paid by employers on their workers’ wages from 15% to 13.8%, undoing the rise brought in by the Labour government last year. However, the reversal would only apply to employees who are British nationals, with the higher rate remaining for foreign staff.
The party estimates the move would cost the Treasury £11.2 billion, but argues it would force firms to hire unemployed British nationals instead of cheaper foreign labour.
How the Levy Would Work
The new tax would be a graduated levy targeted at lower-paid jobs, with full details to be released following a consultation with businesses. Jenrick suggested the levy would fall as salaries rise, reducing the “easy lever of cheap foreign labour” without penalising firms hiring “the most skilled people.”
He indicated that companies employing foreign workers full-time at the minimum wage (an annual salary of £24,784 for those over 21) could face a levy of £3,750. This could be reduced to £1,500 for workers earning £50,000 a year, and £500 for those earning £100,000.
Jenrick declined to specify the exact proposed rates, saying it would be “irresponsible” to do so with up to three years before the next election.
Impact on Key Sectors
The policy is likely to have the greatest impact in sectors such as retail, hospitality, and manufacturing, where companies are most likely to employ foreign workers. It would also significantly affect private companies employing carers, which — unlike public sector employers such as the NHS — have not been shielded from last year’s National Insurance rise.
Jenrick suggested such firms should look to raise salaries to recruit British workers instead, adding that foreign nationals were doing “many jobs that the Brits should be doing.”
Political Reaction
Conservative shadow chancellor Sir Mel Stride accused the party of “throwing out a litany of policies in the hope something sticks.” He added: “Announcing tens of billions in entirely uncosted promises is not serious. It’s a symptom of a party that deals only in gimmicks and headlines, with no real plan for government.”
Labour said Reform’s “latest half-baked plan” would “leave British businesses and British people worse off,” adding that the proposals “threaten to hike bills and leave working families paying the price.”
The Bottom Line
Reform UK has pledged to introduce a new tax on companies hiring foreign workers, using the revenue to reduce National Insurance for British employees. The graduated levy would be highest for lower-paid foreign workers and diminish for higher earners. The party says the policy would force firms to hire unemployed British nationals. Critics have called the plan uncosted and reckless. The announcement comes ahead of a key by-election in Makerfield.
