Immigration Rules

(Limited Text - Ministerial Extracts only)

Wednesday 7th July 2021 Westminster Hall

[The Parliamentary Under-Secretary of State for the Home Department (Kevin Foster)]

It is a pleasure to serve under your chairmanship, MsVey. I thank the hon. Member for Glasgow North East (Anne McLaughlin) for securing the debate with the right hon. Member for East Ham (Stephen Timms), and for the contribution that she has made. Such debates are an important aspect of the Home Office’s accountability, and they ensure that our decisions are held up to scrutiny. I am therefore pleased to have the opportunity to set out some of the background to this particular cohort of cases and what we are doing to ensure that all the applications involved are treated fairly. There are some legal actions going on, but I would be happy to meet hon. Members and groups that are not involved. Perhaps we can discuss the details separately, given the limited time.

It has to be said that the tier 1 general route, to which highly skilled migrants applied, was beset with problems and opportunities for abuse, which is why the Government closed it to new applications back in 2011. The investigations that we have concluded so far show that the principal issue is not tax records and the evasion of tax payments that should have been made, but applicants falsifying their earnings to obtain their immigration status, often involving five-figure sums. It would be simple to ignore those concerns and grant all the outstanding applications. However, that would not be a right or just outcome for those who did play by the rules, given that the scale of the discrepancies is often far beyond those that might be attributed to innocent mistakes or accounting practice.

[Anne McLaughlin]

Surely the Minister is not suggesting that everyone I am talking about has been denied indefinite leave to remain because they falsified earnings in order to get themselves here. Those people were invited and allowed to come in. He is not suggesting that, is he?

--- Later in debate ---

[Kevin Foster]

I am afraid that we have evidence from a range of cases showing that people did look to inflate their earnings from self-employment. In each case we will make an individual decision, but in each case we are satisfied that there is evidence. There will be an opportunity for people to make their representations directly, but we should not ignore the fact that there has been some quite clear evidence. We are not talking about a difference of a couple of quid between their tax return and what they told the Home Office; we are talking about quite significant amounts. We will continue to consider all the evidence fairly and objectively in each individual case and not generalise about them all. We will give applicants the chance to respond to any concerns we have. But, as anyone would expect, we will be firm with those who have sought to play the system.

[Anne McLaughlin]

The Minister says that he will consider every case on its merits, but what happens to those people in the meantime? They are not allowed to work, rent, drive or have a bank account, and they are not allowed any recourse to public funds. Those people have families, with children at school. The kids will not be allowed to go to school. What happens to them in the meantime, because it is taking a very long time to reach decisions?

[Kevin Foster]

There are a number of processes that we are going through, but it might be helpful if I set out the scale of the discrepancies. In cases where investigations have been completed, there were instances of applicants claiming points for earnings that were, in 80% of cases refused, at least £10,000 higher and, on average, £27,600 higher than the earnings shown by their tax records. We would all agree that those are not minor errors. In any context where we were talking about someone with a discrepancy of £27,000 on their tax return, we would probably make a point about whether they were paying the tax they should be paying.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing the debate. Will the Minister outline what steps his Department will take in conjunction with HMRC to investigate whether the tax discrepancies of highly skilled migrants refused indefinite leave to remain met the normal HMRC deliberate or careless threshold? How did the Department determine that such discrepancies constitute bad character?

[Kevin Foster]

We do so by sharing information between the two Departments. If someone gives information about their salary to one part of Government, saying that it is an honest declaration of their tax position to meet taxation laws, it should not come as a huge surprise if that is then considered when looking at a declaration of income that they have made to another part of Government relating to rules on immigration status.

Let us be clear that not all tier 1 general cases share those characteristics. Many applicants did find highly skilled employment, and the vast majority were successful in their applications. There are outstanding cases because it is important that we take the time to get to the bottom of concerns in those outstanding cases and establish whose earnings were genuine and whose were not.

With regard to the tax discrepancies, the Home Office does not trawl through people’s tax records looking for any errors or discrepancies in order to refuse applications. Where we have checked tax records, it is because the evidence of an applicant’s claimed earnings was not strong, and we were actually looking for further evidence to support their claims and grant their applications, as we are doing in other parts of the immigration system. Sadly, all too often our investigations found their tax records did not support the claims they made to the Home Office about their earnings.

It is interesting to note that when it became widely known that we were doing that, HMRC saw a surge in requests from tier 1 general visa holders to make some highly unusual amendments to their tax records, often involving large amounts solely for the earnings periods relied on in visa applications. That pattern was actually so unusual that HMRC brought it directly to the Home Office’s attention.

Again, we are not talking about the sorts of minor discrepancies or tax errors that HMRC deals with day in, day out. Our investigations show instances of individuals increasing their earnings on their tax records, waiting until a Home Office application is granted and then amending their earnings back down again so that they do not have to pay the extra tax that these variations would have incurred.

[Anne McLaughlin]

I need to put on the record that I am not for one minute suggesting that in those circumstances, when someone has done all three things, that person has done nothing wrong. However, not all of these people fit that category. Is it just a coincidence that not a single person who has been refused a visa on that basis is white? Is it just a coincidence that 70% of them are Pakistani nationals? What is the explanation for that?

[Kevin Foster]

I will come on to our response to the Migrants’ Rights Network report in a moment. However, to be very clear, in each instance it is the evidence in the case and not any other factors, such as nationality, that is looked at. Of course, given that there was free movement at the time, those from the European economic area would not have been applying under this type of migration system—again, there is a narrower scope for it.

In response to some of the points made earlier, let us be clear that the principal concern is not tax avoidance—it is not the idea that people have not paid tax on £27,000 of earnings, for example—but visa fraud. It is people effectively saying to the Home Office that they made earnings that meet this bar that they did not actually make—not that they did not pay tax on significant earnings. Just saying, “HMRC did not take action, so neither should the Home Office” misses this rather crucial point.

Particular reference was made to paragraph 322(5). It does not relate only to serious criminality or terrorism; it has always had a much broader remit, including an applicant’s general conduct in the UK, which unsurprisingly has always formed a part of immigration decision making. The courts consistently agreed that the use of paragraph 322(5) was appropriate in cases in which applicants failed to give any convincing explanations of discrepancies in the earnings for which they had claimed points. Yet, to touch on the point made earlier, as part of our new immigration system we have been overhauling and simplifying the immigration rules, so this paragraph will no longer apply to future applications. Under our new rules, we no longer group criminality and terrorism together with issues such as conduct or false representation, which is a clearer approach. However, those were not the rules that applied at that time.

I am aware of the recent report by the Migrants’ Rights Network suggesting that only people of certain Commonwealth and former Commonwealth nationalities are being refused. Sadly, the Migrants’ Rights Network has not shared its data with us. However, our own data show that the six nationalities mentioned in its report accounted for 68% of all people in the tier 1 general route since 2010. The same nationalities represent 65% of those granted settlement in the route since 2010. What difference exists relates to the greater proportion, for whatever reason, of applicants of these nationalities who relied on self-employed earnings, rather than earnings via pay-as-you-earn, in their applications. Our approach is therefore is to examine each case individually, look at all the evidence on its merits and not make assumptions based on an applicant’s nationality or any other attributes. We have strengthened our processes further since the Court of Appeal judgment in the Balajigari case to avoid any possibility of procedural unfairness.

For those investigations that we have concluded, we have found that, in a small minority of cases, applicants have provided new and more credible evidence of their earnings, and their cases have now been granted. In all others, we are carrying out a balancing exercise, weighing any false representations that applicants made in the past against any compelling reasons for allowing their stay in the UK in spite of this conduct. Where there are strong grounds for doing so, we are granting these applications. We have also supported applicants through the process and given them extra time to provide evidence, especially when their ability to do so has been affected by the pandemic.

Turning to the queries about the approach for highly skilled migrants in the future, we are looking to implement an unsponsored route. We are going to learn very clearly from the issues and problems of the previous tier 1 route, especially the issue of how earnings were declared to the Home Office. We will shortly provide details of the new route in the forthcoming innovation strategy, and I hope Members concerned to avoid these issues will be reassured by what they read.

We will not ignore the actions of those who sought to play the system by inflating their earnings to seek an immigration advantage, but we will ensure that all applicants are treated fairly, based on the individual circumstances of their cases, and given a fair opportunity to rebut any queries about the earnings they have declared to HMRC and the Home Office. However, no one should be surprised that we check each other’s notes.

Question put and agreed to.