Immigration Applications: Fee Structure

Tuesday 14th May 2019 Westminster Hall

11:00

[Hywel Williams (Arfon) (PC)]

I beg to move,

That this House has considered the fee structure for immigration applications.

It is a great pleasure to serve under your chairmanship, Mr Paisley. Rather than sitting in front of you as Chair, this time I am standing before you. I was first alerted to the subject of this debate after a constituent wrote to me about how a surplus charge was foisted on her when sponsoring her non-European economic area spouse’s application for settlement. Rather than simply charging an up-front fee of £388—that is the actual administration cost—the Home Office opted to slap on an additional arbitrary fee of £1,135. Effectively, the Government are making a 300% profit on my constituents’ “luxury” purchase of their right to live together in the place they call home.

I am grateful to my constituents for drawing the matter to my attention. Public politics is dominated by the superficial and bogus appeal of “Here today, gone tomorrow” braggarts, shysters and snake oil salesmen, but that is just part of what democracy is about. It is also about concerned and determined citizens taking an active interest in the workings of Government, taking their responsibilities seriously, working with their elected representatives and, when the Government are in their opinion wanting, holding them to account.

Significantly, a report by David Bolt, the independent chief inspector of borders and immigration, attractively entitled, “An inspection of the policies and practices of the Home Office’s Borders, Immigration and Citizenship Systems relating to charging and fees June 2018-January 2019”, published on 4 April this year, outlined the costs of different immigration applications, including short-stay visit visas and settlement schemes, which is the matter I am concerned with today. The report calculates the surplus for each application type. The surplus is the difference between the 2018-19 fee and the actual estimated processing costs. When applying from outside the country for settlement through the family route, the surplus stands at £1,135, as my constituent noted. That is the surplus, but the actual cost is higher. Anybody would understandably be angry to discover that they were being effectively subjected to arbitrary and to my mind unjustified taxation. They are paying an excessive fee that is very much over the odds for something that should be their right.

The report by the chief inspector also directly addresses the point that short-stay visitor visas are being subsidised by other immigration applications. Despite being higher in price than originally planned—the Home Office had initially intended a 2% increase in 2018—the fee for a tourist visa was £37 below the unit cost. My constituent was paying three times more than the unit cost. My constituent was even angrier about having to pay a spouse settlement fee of £1,523 on discovering that the unit cost was £388. That was apparently in order to subsidise the tourist visa system.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing this issue for consideration in Westminster Hall. As he said, the increase in fees is astronomical. Does he share my concern on behalf of those who are already working to get a wage to bring their partner and their children to the country? These fees add extra financial stress to their capability and ability to bring their families to this country and reunite. Does he agree that we need appropriate fees that do not keep people’s families out of this country?

[Hywel Williams]

That is certainly the conclusion I have drawn in this particular case. I will refer later in my speech to the income threshold that is applied, which acts differentially in different parts of the country, and surely that pertains to Northern Ireland as it does to north-west Wales.

According to the Minister, the subsidy for the 2.5 million short-term visas issued each year for tourists costs in the region of £90 million per annum. While I accept that tourism is vital to the UK—it certainly is to Wales and my part of north Wales—and I understand the principle of making the UK as accessible as possible to tourists, I do not agree with making non-EEA spouses and other migrants shoulder the burden, particularly when the fee is four times what it should be, as compared with the real cost.

I was in business before I became an MP. Had I charged a fee for a service I was providing that was four times my costs, that would have amounted to profiteering, even allowing for a reasonable profit. Slightly tangentially, does the Minister have information to hand on where those tourists who apply for subsidised short-term visas end up visiting in the UK? Whose economy are we subsidising? Who benefits? Of course, the vast majority of tourists visit London. In fact—this will interest you, Mr Paisley, and the hon. Member for Strangford (Jim Shannon)—there were four times as many visits to London as there were to Scotland, Wales and Northern Ireland combined. According to the Office for National Statistics and VisitBritain, almost 20 million tourists visited London in 2017. If we compare that with the 372,000 who visited Cardiff, hon. Members can see the point I am making. Who benefits from the subsidy, and who benefits disproportionately?

The Home Office has set itself the target of the immigration system becoming self-funding. Any below-cost offers would need to be balanced elsewhere within the system, either through fees that were higher than unit cost for other application types or through cost-saving efficiencies, or perhaps both. The principle of self-funding seems to disproportionately penalise some of those who interact with the system. After all, they are paying more than they would reasonably expect. The report recommends that the Home Office runs a wide-ranging public consultation on charging for borders, immigration and citizenship system functions to be completed and published in time to inform the 2019 comprehensive spending review, which I understand we are still waiting for. I wholeheartedly agree that an overhaul and a comprehensive review are needed to avoid the continuation of what I see as gross overcharging, especially if BICS continues with its self-funding ambition.

In response to the report’s recommendation, the Home Office has said it will be reviewing the ambition in the context of the 2019 comprehensive spending review. I understand that that is pending. I have no idea when it is due or, for that matter, when the Minister will be reviewing it, so perhaps she can inform us. The Home Office expects there to be greater linkage on the basis of three key principles in the setting of all fees: providing funding stability, instilling fairness throughout the system, and promoting prosperity and UK interests. I have no problem with those principles; the problem is with the application of the system in instilling fairness, because I do not think it is fair.

I have written to the Minister asking for a meeting to discuss the charging framework for visa and immigration services, but perhaps she can answer a few of my questions in this debate and we can avoid using her valuable time for a meeting. What progress has she made on reviewing the self-funding ambition, especially in line with the principle of instilling fairness throughout the system? Will she commit to holding a comprehensive review, as the chief inspector recommends?

In a previous Westminster Hall debate, the Minister stated:

“The charging framework for visa and immigration services delivered £1.35 billion of income in the last financial year, 2017-18. That helped to fund more than £620 million of costs associated with other immigration system functions”.—[Official Report, 4 September 2018; Vol. 646, c. 20WH.]

It seems to my constituent, and I agree with her, that the British Government treat some parts of the immigration system as a profit-making wheeze, churning out and charging people according to their net financial worth, when what really matters is people’s rights and their dignity—people’s right to live together as a couple. If the Government are intent on using business-like jargon, what has the Minister’s Department done to promote cost-saving efficiencies—the other part of what I mentioned earlier—as a strategy for the future? It seems an obvious avenue worth exploring.

When constituents of mine are subjected to fees four times the unit cost, the system is obviously fundamentally flawed. For many people, the process of bringing over a spouse from abroad to live together here in the UK is complicated, arduous and costly. For the British Government, however, immigration bureaucracy has become quite the money spinner. Such a policy fits neatly with the Government’s unjust £30,000 immigration threshold, which I mentioned earlier in response to an intervention. It has a clear differential impact on areas of low wages, such as in my Arfon constituency. A £30,000 annual income might seem reasonable here in London, but in Arfon it is a small fortune that many people cannot even hope to achieve. The £30,000 threshold and the fee structure have been thrust on us by an Executive that know the price of something, but have no idea of the actual value, reducing everything, even the institution of marriage that they purport to support, to bean counting.

For the Government to charge spousal immigration applicants for administration costs is at best a burden, but to profiteer from it is unconscionable. The Home Office is pricing out couples who cannot afford an inflated charge of £1,523. The Immigration Minister must take a long, hard look at the visa fee structure system. We need an immigration system that abolishes arbitrary charges and instead treats people with the dignity that they deserve and to which they have a right.

11:13

[The Minister for Immigration (Caroline Nokes)]

It is a pleasure to serve under your chairmanship, Mr Paisley. I thank the hon. Member for Arfon (Hywel Williams) for securing this debate on the fee structure for immigration applications. I have listened carefully to his comments and can assure him that I am in no doubt about his strength of feeling on the topic, and I am of course aware of representations made by other Members, both in previous debates and in writing and through written questions. Before I respond to the specific points that he has raised today, I want to set out the current landscape for the fees that we charge for visa, immigration and nationality services.

The Immigration Act 2014 approved by Parliament set out the governing factors that must be given regard to when setting fee levels: the costs of administering the service; the benefits that are likely to accrue to the applicant upon a successful outcome; the costs of operating other parts of the immigration system; the promotion of economic growth; fees charged by or on behalf of Governments of other countries for comparable functions; and any international agreement. That is important because not only do those factors play an important role in our nation’s ability to fund the borders, immigration and citizenship system, but they are the only matters that can be taken into consideration when setting such fees.

In addition, there is a further layer of fees legislation by way of an order that sets the fee maxima that could ever be charged, which is laid in Parliament subject to affirmative resolution procedures. Finally, individual fee levels are then set out in regulations that are presented to Parliament and subjected to the negative procedure. I emphasise that as it is important to recognise that the Home Office cannot amend fee levels without first obtaining the approval of Whitehall and Parliament. A comprehensive system rightly ensures that there are a number of checks and balances in place to ensure that there is proper parliamentary oversight of the fee regime.

Fee levels are calculated in line with managing public money principles and the powers set out in the Immigration Act to reflect the value that people get from the services they receive. The powers that were agreed with Parliament in 2014 bring significant benefit to the borders, immigration and citizenship system and to the UK in the form of effective and secure border and immigration functions, reduced general taxation and the promotion of economic growth.

I recognise that there is significant interest in how fees are calculated, and we publish details of fee levels and estimated unit costs, as well as background information, on gov.uk to cover what is included and excluded from unit cost calculation. It is important to recognise the significance of the charging framework in funding visa and immigration services. For example, in the financial year 2017-18, £1.35 billion of income was delivered, which helped to fund the costs associated with other immigration system functions. That helped to maintain their effectiveness and security, and investment in ongoing service improvement.

Setting fees at such a level, putting the onus to pay on those who benefit from the services, reduces the burden on the Exchequer and on the general taxpayers of this country. A responsible Government have to balance the books. The loss of income resulting from any reduction in specific fees or drastic changes to policy would need to be balanced by rises elsewhere, or an additional taxpayer contribution. The Government remain focused on driving efficiencies throughout the system and on improving services. Our fee levels allow us to attract the brightest and best to the UK while enabling the Home Office to work towards its ambition of a self-financing borders, immigration and citizenship system.

Our fees are competitive. They compare favourably with key competitor countries and offer good value, particularly when considering the benefits and entitlements of a successful application. We expect future spending reviews—the hon. Gentleman referred to this—to influence our approach on fees, but we will want to ensure that, overall, we strike the right balance between funding the system, instilling fairness and promoting prosperity and UK interests.

The hon. Gentleman raised the chief inspector’s recently published report on the Home Office borders, immigration and citizenship system’s policies and practices relating to charging and fees. We certainly welcomed the recommendations made by the independent chief inspector of borders and immigration, and accepted the majority of them. Our published response sets out in detail which recommendations the Home Office has and has not accepted and why, so I will not go through them now. We recognise that improvements can be made across the system in increasing the transparency in how we charge and the service standards that our customers can expect where we charge a fee.

We expect the forthcoming spending review to influence our approach on fees, but we will want to ensure that, overall, we provide funding stability, instil fairness and promote prosperity and UK interests.

The hon. Gentleman raised some specific points. I will talk briefly about the income threshold. There is a level of confusion regarding the proposals in the Government’s White Paper, published last December, which spoke of the future borders and immigration system—not scheduled to come into play until January 2021—and which referred to a £30,000 threshold. That is not for a spousal visa, but for people seeking to come to the UK to work under the equivalent of our current tier 2 system.

That figure was not plucked out of thin air arbitrarily by the Government, or thrust upon us, as the hon. Gentleman suggested; it came from a long and detailed piece of research carried out by the independent Migration Advisory Committee. When the committee’s report was published last September and incorporated into our White Paper last December, we made it very clear that that would commence a year of engagement on this subject.

I am sure that the hon. Gentleman will be pleased—perhaps relieved—to learn that over the last five months or so, Home Office officials have undertaken more than 70 separate events, in every region and nation of the United Kingdom and across every sector of industry. I have taken the time to speak to Scottish and Welsh Ministers, and at meetings with members of the civil service of Northern Ireland.

When we consider the future border and immigration system, it matters that we listen to voices from across the United Kingdom and across industry, and understand how we can interact as between the suggestion of expert economists that a £30,000 threshold for a tier 2 visa was about right and the concerns of certain sectors of industry. Of course, different parts of the United Kingdom have average salary levels that are different from those in, say, London and the south-east.

That is an important ongoing piece of work. I am sure that Members will be delighted to hear—there are two Members from Northern Ireland and one from Wales in the Chamber—that this summer I will again spend time in Scotland, Wales and Northern Ireland, listening to the voices of those devolved nations and industries operating within them.

Importantly, the salary threshold for those wishing to bring a spouse and/or dependants into the country is not set at £30,000. The eligibility threshold to apply for a spousal visa is set at £18,600. That is designed to ensure that families can support themselves financially, and we ask for evidence that the sponsor can meet a minimum income threshold. There are additional requirements depending on the number of children. If the spouse has one child, the threshold rises to £22,400, and then by £2,400 per additional child.

The principle was to ensure that there was no dependency on our benefits system, and the threshold was set at a level at which people could be expected to be able to participate fully in society, and integrate into our communities. We in the Home Office, alongside the Ministry of Housing, Communities and Local Government, continue to play an important part in ensuring that our system enables people to integrate into communities and play a full role in society. The principle has, of course, been consistently upheld by the courts, and has been tested rigorously.

As the hon. Gentleman alluded to, I have committed to keeping fees for visa, immigration and nationality services under review, and to take account of the issues raised in today’s debate and previous ones, in the light of the independent chief inspector’s recommendations. The Government are committed to ensuring that we have an effective border and immigration system that is not a burden on the Exchequer and the country’s general taxpayers. Decisions on how the system is funded are complicated and require a number of factors to be carefully balanced, as I have set out. However, I reiterate that the Government remain entirely dedicated to maintaining support for the vulnerable who come into contact with the immigration system, ensuring that they are treated fairly and humanely.

Question put and agreed to.

11:24

Sitting suspended.