Immigration and Nationality (Fees) (Amendment) Order 2022

Baroness Williams of Trafford Excerpts

Wednesday 23rd February 2022 Grand Committee

Moved by

[Baroness Williams of Trafford]

That the Grand Committee do consider the Immigration and Nationality (Fees) (Amendment) Order 2022.

[The Minister of State, Home Office (Baroness Williams of Trafford) (Con)]

My Lords, the Immigration and Nationality (Fees) Order 2016 sets out the immigration and nationality functions for which a fee is to be charged and the maximum amount that can be charged in relation to each of those functions. The order under discussion today seeks to make two changes to the 2016 order, specifically amendments to the maximum amount that can be charged for two application types: entry clearance as a visitor for a period of six months or less, more commonly known as a short-term visit visa; and entry clearance or leave to remain as a student.

I make it clear at the outset that the changes being discussed today do not alter the fees actually paid by customers. Specific fee levels are set out in separate legislation, namely the Immigration and Nationality (Fees) Regulations 2018, and these levels are not impacted by the amendment we are debating today. The changes in this amendment will serve to increase the flexibility in relation to fees in the future.

The maximum amount that can be charged for a short-term visit visa will increase by £35 from £95 to £130. This will align with the fee maximum for the published unit cost for this product. The maximum amount for entry clearance or limited leave as a student will be raised by £10 from £480 to £490. The relatively small increase will provide some additional headroom for student fees, particularly those that are close to the current maximum amount.

By way of background, both changes mark the first time the maximum amounts will have increased since 2016. They provide some additional flexibility for these fees in future, allowing the department to take a balanced approach when considering fee changes across visa routes.

--- Later in debate ---

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, the noble Lord, Lord Paddick, asked a number of the questions that I was planning to ask. I am aware that there is a wider debate on immigration fees and the Government’s policy of making a profit on certain groups, such as Commonwealth veterans or those paying for optional premium services. That wider debate is being carried out on the Nationality and Borders Bill as we speak.

I am aware that in this SI we are talking about two specific cost increases to the cap. Specifically, I noticed the note in the impact assessment that the optional premium services are

“charged above cost … to meet customer demands and to limit fee increases in other areas.”

Is the Minister able to say how much extra money is made through these optional premium services? By how much does that reduce other costs?

Another point, which was touched on by the noble Lord, Lord Paddick, is about tourism. Does the Minister recognise the importance of supporting the tourism industry? As she will know, there was an interesting Question in the Chamber earlier this month about school parties coming from France. I think she will have picked up the general sense of frustration in the House that school parties from our nearest neighbours are not coming. I understand the point about Covid, but nevertheless I hope she picked up the general sense of frustration in the House at the answers she gave to that Question.

The noble Lord, Lord Paddick, explored another point by asking the Minister to give a wider explanation about the need to provide extra headroom on the fees. As he asked, what is the cost of processing the fees? How much headroom is the Minister seeking in this SI? I understand the reasoning behind it, but what is that headroom and what is the processing cost?

The other point that I wanted to make—to pick up a point also made by the noble Lord, Lord Paddick—was about the general move to self-funding, which is a clearly stated aim by the Government. The noble Lord went on to question why this element within the visa system should be moving to self-funding when other large departments have not had that constraint put on them. I would be interested to hear from the Minister a philosophical defence of that position, given that we benefit from immigrants. That point is acknowledged, so why should the department be moving towards self-funding?

[Baroness Williams of Trafford (Con)]

I thank both noble Lords for the points they made. I will first answer the last question on why we should be moving towards self-funding. We have been self-funding since as far back as I remember and it has always been the case that those who use our border and immigration services should contribute towards the cost of running them. It is not something that absolutely everybody in the country avails themselves of, unlike the NHS, which we all pay for through taxes. That is my best guess as to why we charge contributions towards the cost of border and immigration services.

Both noble Lords asked about the costs of the short- term visit visa. The incremental growth between 2015 and 2019 was from £85 to £95, and there have been no increases since 2019. The fee is currently £35 less than the published unit cost, which is £130. The current maximum amount of £95 has not changed since it was set in 2016. The impact assessment for this order suggests that an increase, even to the new maxima, would not have a significant impact on demand: 41,000 fewer applications. Against a baseline of 1.72 million, this represents about a 2.4% reduction in 2022-23, with a net benefit to HMG of £55 million. That is additional revenue minus costs, including the impact on the Exchequer of reductions in inbound tourism. There is little evidence to suggest that previous fee increases have had a notable impact on volumes.

The fee is broadly comparable to those of competitor countries, although the differing benefits offered by these products make direct comparison quite difficult. For example, the Schengen visit visa is cheaper at £67 but is valid for three months, compared with six months for the UK short-term visit visa. The comparable US visa is £117 but is valid for 10 years.

The noble Lord, Lord Ponsonby, asked about the premium service. It is entirely optional and costs between £15 and £48. As I say, it is optional. To answer the question of the noble Lord, Lord Paddick, the fees are set under the charging powers in the Immigration Act 2014. The estimated unit cost of the in-country student main applicant and dependant applications are £252 for a child student and £153 for an overseas applicant. As I say, the cost and the fee are quite different. I explained at the outset that the fees contribute to the cost of the border.

I think the noble Lord, Lord Paddick, asked me a couple of other questions that I did not manage to write down in time, so if there is anything outstanding I will write to him. At this stage, I beg to move.

Motion agreed.