Summary


The share of jobs among London residents that are held by non-UK nationals has been increasing since the UK’s formal exit from the European Union and the start of the pandemic in early 2020. A big increase in jobs held by non-EU/non-UK citizens has been driving this change, even as the number held by EU citizens has fallen.

This release is an update of our previous analysis on the nationality of workers in payrolled jobs living in London, which now covers the period from July 2014 to December 2023. This includes three years of the new points-based immigration regime implemented in January 2021, which corresponds to the end of free movement between the EU and the UK.

See Data notes for a definition of payrolled employments in the HMRC data used throughout this publication.

Note that the data available does not cover the most recent changes to the employment immigration rules, announced by the UK government in December 2023, which toughened the criteria to enter the UK for work, and took effect between March and May 2024 (see key dates, below).

The new data shows that the number of jobs among London residents held by non-UK/non-EU workers – henceforth Rest of the World (RoW) – reached nearly 1.18 million in December 2023, up from around 850,000 four years earlier. Jobs held by EU workers fell to around 740,000 from 850,000, and UK worker employments held steady at 2.73 million.

More than 40% of payrolled jobs of Londoners are held by non-UK workers, compared to 18% nationally. But London has seen smaller proportional gains of RoW jobs than the rest of the country since free movement with the EU ended and lost slightly more EU-held employments.

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live. Vertical lines indicate beginning of lockdowns in March 2020, and end of free movement in January 2021, respectively.


Overview


The share of non-UK workers has trended up in London for many years. At the end of 2023, 41% of payrolled jobs in London were held by non-UK workers, up from 35% in mid-2014. The period since the start of the new immigration rules has seen a fast rise in the non-UK share of employments.

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live. Vertical lines indicate Brexit vote of June 2016, beginning of lockdowns in March 2020, and end of free movement in January 2021, respectively.

Regional comparisons


The share of payrolled jobs held by non-UK workers (41.3%) living in London is more than double the corresponding UK figure (18.6%). However, the share of non-UK payrolled jobs in the UK located in London has been falling steadily over the past 10 years

  • The second region after London with the highest share of RoW workers is the South-East, just under 19%. This rate is just under 9% in Wales, the region of the UK with the lowest share of non-UK workers.

  • Since the end of free movement, the percentage increase in the number of RoW jobs has been stronger in the UK than in London: 68% versus 44%. London has lost slightly more EU payrolled jobs than the rest of the UK: 1.1% versus 0.9% respectively.

  • 40% of jobs held by non-UK workers in the UK were located in London 10 years ago. This share was only 32% in December 2023.

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Regional jobs by nationality

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live.

Change in UK and London jobs by nationality

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live.

London share of RoW jobs

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live. Vertical lines indicate Brexit vote of June 2016, beginning of lockdowns in March 2020, and end of free movement in January 2021, respectively.


Selected industries


This section focuses on four industries in which there have been suggestions that employers have faced skill shortages in recent years. These industries differ in the type of occupations they may offer, skills they require, and reliance on non-UK work.

In the Health & Social Care, Construction, and Education sectors, worker shortages led to inclusion of occupations in the UK Government’s Shortage Occupation List between 2020 and 2023. As such, they were subject to looser visa requirements to recruit non-UK workers than the general rules.

Hospitality was not on the shortage list drafted in 2020, but was affected by lockdowns and recovered slowly when the economy re-opened, with the government asking the Migration Advisory Committee to review occupations in the sector.

  • The number of London residents’ jobs in Health & Social Care rose from around 400,000 in 2014, to just under 600,000 at the end of 2023, with the post-2020 trend almost entirely supported by RoW workers.

  • London’s construction sector still has more EU workers than RoW workers. The number of EU payrolled jobs in construction rose from 2014 to 2021 and has since been flat.

  • The share of UK workers is much larger in the education sector than in the other three. The numbers of EU and RoW jobs are broadly similar for most of the period.

  • From 2014 to 2020 there were more EU workers in hospitality than there were UK or ROW workers. But the jobs recovery after the loss of around 100,000 jobs (or 25% of the pre-pandemic workforce) during lockdowns, was uneven.

  • In hospitality, there were only 113,000 payrolled EU jobs in December 2023, down from 174,000 in December 2019. This has been compensated by a rise in UK and RoW payrolled jobs. UK jobs rose from 156,00 to 171,000 over the same period, while RoW jobs rose from 92,000 to 155,000.

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Health & Social Care

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live. Vertical lines indicate Brexit vote of June 2016, beginning of lockdowns in March 2020, and end of free movement in January 2021, respectively.

Education

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live. Vertical lines indicate Brexit vote of June 2016, beginning of lockdowns in March 2020, and end of free movement in January 2021, respectively.

Construction

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live. Vertical lines indicate Brexit vote of June 2016, beginning of lockdowns in March 2020, and end of free movement in January 2021, respectively.

Hospitality

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live. Vertical lines indicate Brexit vote of June 2016, beginning of lockdowns in March 2020, and end of free movement in January 2021, respectively.


Change over time in London’s top 10 industries


Changes in the employment-nationality mix up to December 2023 varied across the 10 biggest industries (as defined by the number of payrolled jobs) in London.

  • How the Finance & Insurance sector would fare in the post-Brexit context has generated a lot of public debate and research. There were more jobs in the sector in December 2023 than in December 2019, despite a small fall in the number of EU-held jobs in that period. That fall seems to be linked to the onset of the pandemic, as the number of EU-held jobs in the industry rose in the more recent period between January 2021 and December 2023.

  • In December 2023, the three biggest industries in terms of payrolled jobs in London were the Health & Social Care sector (576,800 payrolled jobs), the Wholesale and Retail sector (559,800), and the Professional Services sector (549,700).

  • The number of payrolled jobs in retail is still below pre-pandemic levels and it is the only sector in London under pre-pandemic levels as of December 2023, with fewer EU and UK workers but more RoW workers.

  • Professional services jobs have grown throughout the 2020-2023 period, with the sector gaining nearly 50,000 payrolled jobs between December 2019 and December 2023. The rise in RoW workers is the key component of this growth, with the number of UK workers also rising.

Change since December 2019

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live.

Change since January 2021

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live.

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Table of payrolled jobs


The tables below summarise the number of jobs by industry as well as the percentage changes since December 2019 and since January 2021, in London and the UK.

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London jobs

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live. Comparison is to December 2019 when the number of employments with EU and non-EU nationals were roughly equal

UK jobs

Source: HM Revenue and Customs – Pay As You Earn Real Time Information (non-seasonally adjusted) and Migrant Worker Scan.

Note: Estimates are based on where employees live. Comparison is to December 2019 when the number of employments with EU and non-EU nationals were roughly equal.

Data notes


HM Revenue and Customs (HMRC) has published statistics on payrolled employments in the UK by region, industry and nationality with data on the period from June 2014 to December 2022. This article explores some of the key trends for London.

Payrolled employment counts are a measure of payrolled employee jobs and are calculated based on the proportion of each month in which the employment was being worked.

Please note, the payrolled employment counts used in this article cannot be:

  • directly compared with payrolled employee numbers - payrolled employees can have multiple payrolled employments, so employment counts follow the same trend as employee counts, but will be higher.

  • directly compared with total jobs numbers - these statistics only include employments from the PAYE system, they do not include employments from non-payrolled sources such as self-employment.

  • used as a count of monthly or annual migration to the UK or London, or to show the number of non-UK nationals who are currently living in the UK or London.

Nationality breakdowns are determined using HMRC’s Migrant Worker Scan (MWS). Nationality is reported by individuals when they register for a National Insurance number and may change following registration.

The data has not been seasonally adjusted.

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Key dates


This release concerns the movement of workers from abroad to the UK. The following dates are relevant in this context as they affected movement rights, which includes the process of the UK leaving the EU.

• 23 June 2016 - the UK held a referendum and 52% of those who voted chose to leave the EU.

• 31 January 2020 - the UK left the EU and entered a transition period.

• 23 March 2020 - the first COVID-19 lockdown was announced and the Coronavirus Job Retention Scheme was introduced.

• 31 December 2020 - the transition period ended and the UK left the EU single market and customs union. Free movement between the EU and the UK ended.

• 1 January 2021 - the UK introduced a new, points-based immigration system.

• March to May 2024 – the UK’s revision of the points-based immigration system enters into force. Amongst the main changes: care workers can no longer bring dependents on their visas; the salary threshold on a job offer made to a non-UK national rises from £26,200 to £38,700; the minimum income to bring a foreign spouse over rises from from £18,600 to to £29,000; the Shortage Occupation List is reviewed and becomes the Immigration Salary List.

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