Reform UK is betting its electoral future on a simple, provocative promise: tax companies that hire foreign workers to lower the tax burden on British staff. The party’s proposal, unveiled by Treasury spokesman Robert Jenrick, aims to reverse the National Insurance (NI) hike introduced by the Labour government last year, but only for those with British citizenship.

It is a blunt instrument. The policy would create a two-tier tax system for employers, where hiring a foreign national carries a higher financial penalty than hiring a domestic worker. The party argues this will force businesses to prioritize British applicants and address domestic unemployment. It is a strategy designed to reshape the labor market by making the "easy lever" of cheap migrant labor prohibitively expensive.

The Math Behind the Mandate

The proposal centers on a graduated levy. Under the plan, companies would pay a fee for every foreign worker on their payroll. The cost would be highest for low-wage roles, where the party believes the reliance on migrant labor is most acute. For a full-time worker on the minimum wage, the levy could reach £3,750 annually. As salaries climb, the tax drops. At £50,000, it falls to £1,500. For high earners making £100,000, it hits a floor of £500.

Reform estimates the total cost of reversing the NI hike to 13.8 percent for British staff at £11.2 billion. The party claims the new levy will cover this cost, though they have yet to provide a full, independent audit of the figures. Jenrick declined to set the final rates in stone, citing the three-year window before the next general election. He called it "irresponsible" to finalize numbers now. Critics call it a fantasy.

A Strategy for the Makerfield By-Election

The timing is not accidental. The announcement comes just days before a high-stakes by-election in Makerfield. Reform is fighting to maintain its momentum against a challenge from the right, and the party is flooding the zone with populist policy pledges. Last week, they promised a VAT cut for small businesses. On Sunday, Nigel Farage proposed banning foreign nationals from social housing.

Conservative shadow chancellor Sir Mel Stride did not mince words. He labeled the proposal a "litany of policies" designed to grab headlines rather than govern. Labour echoed the sentiment, calling the plan "half-baked" and warning that it would ultimately drive up costs for businesses and consumers alike. The political math is clear: Reform is trying to capture the attention of voters who feel left behind by current immigration and economic policies.

The Risks to Business and Care

Sectors like hospitality, retail, and manufacturing face the greatest exposure. These industries rely heavily on foreign labor to fill gaps that domestic workers have not, to date, occupied. Private care providers are particularly vulnerable. Unlike the NHS, these firms have been hit hard by recent tax increases. If this policy were enacted, they would face a choice: absorb the levy, raise prices, or struggle to find staff.

Jenrick remains unmoved. He insists that firms should simply raise wages to attract British workers. He argues that foreign nationals are currently filling roles that should belong to the domestic workforce. It is a bold claim. Whether the market can actually pivot that quickly remains the central question.

Key Takeaways

  • Reform UK proposes a graduated tax on foreign workers to fund a reduction in National Insurance for British employees.
  • The levy would be highest for low-wage roles, potentially reaching £3,750 per year, and decrease as salaries increase.
  • Critics, including the Conservatives and Labour, have dismissed the plan as an uncosted, populist gimmick aimed at upcoming by-elections.

What happens next depends on the voters. If the party gains traction in Makerfield, expect more of these aggressive, headline-grabbing proposals. If the plan fails to resonate, the party may be forced to pivot back to more traditional economic messaging. The next election is years away. For now, the debate is purely about the narrative.