New UK immigration proposals could have significant consequences for Scotland’s economy and public finances, with the SNP warning that changes to permanent residency rules risk discouraging skilled workers from building their futures in the country.

The criticism follows an announcement by Home Secretary Shabana Mahmood on Monday 2 November, outlining plans to extend the qualifying period for permanent residency for many people arriving in the UK on work visas.

Under the proposed earned settlement system, the standard waiting period would increase from five to ten years, although some higher earners and workers in essential public services would continue to qualify earlier.

The proposals have renewed debate about the economic contribution of overseas workers, particularly in sectors such as health and social care where international recruitment plays an important role.

Research published by the Institute for Public Policy Research on Monday estimates that skilled migrants and their adult dependants expected to settle between 2026 and 2030 under existing rules would contribute a net £115 billion to UK public finances over their lifetimes.

The figure represents an estimated lifetime contribution from a defined group of migrants rather than the amount that would be lost directly through the proposed immigration changes.

The SNP argues that making permanent residency more difficult could discourage workers from remaining in Scotland, with potential consequences for employers, economic growth and public services.

Pete Wishart, the party’s Home Office spokesperson at Westminster, accused Labour of prioritising political competition with Reform UK over the country’s economic interests.

He said:

“The evidence on the multi-billion pound cost of the Labour Party’s immigration proposals couldn’t be clearer, these proposals will damage Scotland’s economy and our public finances, making us all worse off.

“At a time when growth is down and bills are up, people in Scotland can see as clear as day that Britain is broke, yet the Labour Party seems determined to make things worse.

“Labour’s Home Secretary is hell-bent on forcing through these damaging reforms, whatever the cost to people in Scotland and across these isles.

“The SNP will not stand by while the Labour Party damages public finances, harms our economy, and throws health and social care workers under the bus just to chase after Reform UK.

“While it’s positive that the Labour Party has scaled back its crackdown on health and social care workers, after criticism from all sides, including from the SNP, we need to see a full reversal of Labour’s costly and chaotic proposals.

“Scotland can’t afford a UK Labour Government dancing to Nigel Farage’s tune.

“We deserve better than a Labour Party willing to sacrifice Scotland’s economy, our public finances, and our health and social care workers for their own political purposes.

“Scotland and our communities, households and businesses need the hope that can only ever come with the fresh start of independence.”

The UK Government maintains that its reforms will create a fairer immigration system by linking permanent residency more closely to earnings, employment and individual contributions.

Under the plans, certain healthcare professionals, teachers and higher earners would retain a five year route to settlement, while the highest earners could qualify after three years.

The revised approach also offers transitional protection for some existing care workers following concerns about the consequences of longer qualifying periods.

However, questions remain about the treatment of other skilled workers already living and working in the UK who expected to qualify for permanent residency after five years.

The IPPR has urged ministers to consider fair transitional arrangements, warning that uncertainty over settlement rights could undermine the UK’s ability to attract and retain skilled employees.

For Scotland, where employers across healthcare, hospitality and other industries depend on international recruitment, the debate extends beyond immigration policy to the availability of workers and the long term strength of the economy.

The challenge for ministers will be balancing their stated objectives on immigration with the economic contribution of people who have already made the UK their home.