House of Lords report on Settlement, Citizenship and Integration: key findings and policy implications

The House of Lords’ Justice and Home Affairs Committee (the ‘Committee’) released its report on Settlement, Citizenship and Integration on 23^rd June.

This critical report suggests that immigration policy has been too reactive and has been developed in the absence of adequate data, impact assessment, operational capacity or cross-governmental cooperation. Ultimately it opposes key proposals for earned settlement included on the Government’s May 2025 White Paper, including its proposals for a baseline 10-year path to Indefinite Leave to Remain (‘ILR’) for migrants with work and family visas due to the risk of undermining integration, and its proposals to apply changes to ILR rules retrospectively to individuals already in the UK.

A link to the report can be found here, and the Government has two months to respond to the Committee’s report. The impact of the Government’s response is universal, effecting businesses and individuals alike, and the report is likely to become an important test of whether the next phase of immigration policy is evidence-led and operationally deliverable, or whether the Home Office continues the reactive approach criticised by the Committee.

Lack of sufficient data

The Committee’s most striking finding is that the UK does not have a sufficiently reliable picture of who is in the country, how migrants move through the immigration system, whether visa holders leave when required, or what outcomes migrants experience after arrival. The report notes that Home Office migration statistics focus mainly on entry into the UK. While the Migration Journey dataset is valuable, there are significant gaps in understanding migrants’ employment, interaction with public services, housing, benefits and criminal justice outcomes.

The Committee is particularly critical of the absence of published exit check data since 2020, which means that enforcement activity is driven more by risk and opportunity than by comprehensive evidence. The report recommends the urgent resumption of exit check statistics before the 2026 summer recess, followed by annual updates.

The Committee’s conclusion is blunt: major data gaps make it difficult for government to develop meaningful impact assessments, and equally difficult for Parliament, to assess the likely impact of policy proposals. This matters because the Government’s settlement reforms could affect millions of people, including workers, families, refugees, children and employers planning long-term workforce needs.

Data linkage is presented as the alternative to blanket policy-making

The Committee recommends that visa records be linked routinely to datasets such as HMRC payroll records and DWP Universal Credit data, supported by a consistent individual identifier issued alongside a visa grant. The aim is to understand how different routes interact with the labour market, public services and integration outcomes over time, as well as to identify where migrants are contributing economically, where local services are under pressure, where support is needed, and where rules may have unintended consequences.

The Committee rejects the proposed extension of settlement timelines

The report opposes proposals to extend the baseline qualifying period for ILR from five to ten years, with longer routes for medium skilled visa holders and refugees. It concludes that a ten year baseline for work and family routes would be more restrictive than comparable high income countries, and that routes beyond ten years would make the UK an international outlier.

The Committee proposes an alternative to retain the 5 year baseline qualifying time for ILR, while separating ILR from access to public funds, meaning that those with ILR could remain subject to the No Recourse to Public Funds condition until they have lived in the UK for 10 years and/or obtained British citizenship.

The Committee’s objection is not only humanitarian. It argues that longer and more precarious routes to settlement may undermine integration by reducing security of status. Migrants who cannot plan for long term employment, housing and family life are less likely to integrate successfully. Repeated visa renewals, application fees and Immigration Health Surcharge costs may also increase poverty among lower income migrants and create a greater risk that individuals fall out of lawful status if they cannot afford to renew.

For a Home Secretary keen to project toughness, this alternative may be less attractive than extending settlement routes. However, if a key driver of earned settlement is concern that large numbers of post-Brexit social care workers may later claim public funds, the Committee’s proposal offers a more targeted response. It may not fully satisfy the Secretary of State, but it should require consideration of whether pushing people into poverty, or increasing the risk of overstaying, would ultimately impose greater costs on the state.

Retrospective application is a major fairness and reputational risk

The Committee strongly opposes applying new ILR rules retrospectively to people already on qualifying routes. It describes retrospective change as manifestly unfair and potentially unlawful because migrants have made career, housing and family decisions on the basis of the existing rules. The report is particularly concerned about the position of Hong Kong BN(O) visa holders, given previous government assurances about a route to British citizenship.

Most significantly, the Committee finds that retrospective action would damage the UK’s reputation, making it a less attractive destination for highly skilled migrants. This risk is particularly acute given global talent shortages in fields such as AI, research, healthcare, construction and the creative industries.

“Earned settlement” is accepted in principle, but criticised in design

The Committee does not reject that settlement and citizenship should be earned but finds that the proposals should be reformed, such as clarifying how additions and reductions to the qualifying period should be defined. It recommends that visas should be decoupled from sponsors and tied to sectors, if necessary requiring those switching companies to pay back sponsorship costs over the course of a year.

Crucially the report recommends that the Migration Advisory Committee (‘MAC’) advises on the income levels which lead to a reduction of the ILR pathways, and that they should assess this based on the impact of migration on public finances and the impact on regional labour markets when setting out the thresholds.

It recommends that certain groups should be exempt from the minimum mandatory income of £12,570 for three to five years, including those on maternity leave, with long-term illnesses or disabilities, and unpaid carers. It also recommends that migrants with dependent visas should be able to qualify for ILR as the work visa holder if income is sufficiently high that the household places no burden on the state. This is a sensible recommendation.

The report recommends that children who arrive at a young age and grow up in the UK should usually be granted settled status by 18, and that children who arrive later should have a clear and accessible pathway to settlement. The status of children is of significant concern and this is a welcome recommendation although it is to be considered if it goes far enough.

The Committee also underlines the positive role of work and English language skills in integration. Its point is deliberately balanced: the Government must provide the conditions that enable migrants to work and learn English, while migrants must take those opportunities.

The Committee accepts that migrants should learn English, work where they can, and engage with UK society. But it also stresses that the Government and receiving communities must create the conditions in which integration is possible. That means adequate ESOL provision, employment support, clear rules, manageable costs and a coherent integration strategy.

Simplification of immigration rules and review of Government fees

The Committee calls for urgent simplification of the immigration rules and legislation, echoing a long-standing concern across the immigration sector.

Crucially, the Committee criticises the lack of an adequate impact assessment during the consultation process and says that any major policy proposal should be published with a full impact assessment.

The Committee also recommends that profits from above-cost immigration fees be reinvested in the system, and that fees be capped at 150% of cost. This would help keep the UK competitive for highly skilled workers while ensuring fees remain reasonable for migrants. Given the global competition for talent, this is a recommendation the Government cannot afford to overlook.

The Committee calls for an overhaul of the Life in the UK test and to raise awareness of how to obtain citizenship for children.

For the Home Office, the Committee calls for an assessment of the policy’s staffing impact and stronger support for caseworkers, so the system can operate efficiently, effectively and fairly.

Conclusion

The Committee highlights a long-standing weakness in government immigration policy: it has too often been shaped by political pressure, short-term concerns and reactive decision-making. Its recommendations offer a more balanced approach, aimed at preserving fairness for migrants, supporting integration and ensuring the UK gains the full benefit of migration.

The report may make retrospective application harder to defend, both politically and legally. It also increases pressure on the Government to publish full impact assessments before implementing major reforms, and gives Parliament and stakeholders a clearer basis for challenging policies that appear unsupported by evidence or unworkable in practice.

It may also encourage a more nuanced approach to earned settlement. Instead of a simple ten year baseline with additions and reductions, the final policy may need clearer exemptions, MAC informed income thresholds, specific provision for dependants, children and vulnerable groups, and a stronger link between settlement, citizenship and integration support. It may also push the Home Office towards administrative reform, including simplified extension applications, better data sharing, increased caseworker capacity and a clearer cross-government migration plan.

For employers, and for migrants and advisers, the Committee’s considered and detailed approach is welcome. The Government may wish to use this as an opportunity to move beyond immediate policy challenges and to pursue thoughtful, constructive reform that benefits the UK.  We look forward to seeing their response.

The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please do contact the Bates Wells team if you require further advice.