Immigration and Nationality (Fees) Regulations 2012

Baroness Hamwee Excerpts

Wednesday 21st March 2012 Grand Committee

[Lord Hunt of Kings Heath]

Once again, it is a delight to follow the noble Lord, Lord Henley, as we deal with orders and regulations in Grand Committee. I am grateful for his very persuasive arguments in favour of these regulations, but I have one or two points to raise.

Clearly, the regulations are about making UKBA pay its way in the world. Does there come a point where providing additional services on a premium basis and dramatically increasing the cost of applying for particular forms run the risk of effectively selling British citizenship? How precisely does the Minister assess the value to an individual who is making a particular application? That is how the amount is now set, it seems. It is not the amount it costs to run or provide the service, but the assessment by UKBA or the Minister of the supposed value to the applicants of the benefits that accrue to them. It would be interesting to know how those figures are arrived at.

What impact does the Minister think that the increases will have on the total number of people applying to come to the UK or to stay once they are already here? Will he say a little more about how much additional money will be raised for UKBA? Some increases are higher than others, but the noble Lord referred to an average of 2 per cent. Clearly, it would be interesting to know the impact on UKBA’s income.

Another point raised in the debate on these regulations in the other place was in relation to Armed Forces personnel and charges for visas. The Minister there referred to the relationship to the military covenant. Can the noble Lord explain a little more about this issue?

Finally, I come to the impact on business and the UK economy. The noble Lord will know that the CBI has condemned the Government’s decision to increase visa fees for working migrants and their sponsors as a bitter blow to UK business. Neil Carberry, director for employment and skills policy at the CBI employers’ group, was scathing about the cost upgrades. He said:

“The shock announcement that some work permit charges will rise between 20 and 60 per cent will come as a bitter blow to businesses. Firms have yet to see the improvements in customer service they were promised, in return for the last tranche of inflation-busting rises last year”.

There are two points here. First, there is the concern that increases in fees will be made but the service will not improve. That is a very important issue that the noble Lord needs to address. Secondly, there is the impact on the UK. I do not know whether the noble Lord has had time to study the article this morning by Willie Walsh, the boss of British Airways, who talks about the attitude of business people in China investing in the UK. Essentially, the perceived discouragement of overseas business men and women coming to this country, combined with policies on airport capacity, is having a chilling effect on investment in this country from countries such as China.

I watched the Budget Statement and was very disappointed that it had very little to say about how we are going to get this country growing again. The Minister may say that that is a little wider than the Home Office’s usual brief, but how policy is developed in relation to immigration and to fees can play an important part. It would be good to know how the Minister will respond to the concern of many businesses. This is also very much related to the issue of higher education and the ludicrous restrictions made on overseas students coming into legitimate institutions in this country. All that is doing is undermining one of our most successful economic sectors.

[Baroness Hamwee]

My Lords, I, too, thank the Minister. As the noble Lord, Lord Hunt, said, some of the reactions to the increase in fees are well known. They are exactly what any Government of any colour would say—that charges should reflect the level of service and be appropriate to it. The problem is that we hear far too often that customer service is relatively poor. It was described to me as a “litany of minor problems”. If you accumulate a set of minor problems, in totality they become more than just minor.

There is a reputational issue, too. I was given the comparison of two people coming to the UK and to Germany; the one who arrived at Frankfurt would be dealt with there and then, whereas the one coming to the UK would have had to send his passport to the embassy in his country in advance. Obviously, there are different arrangements depending on different individuals but, in general, it is a very telling point. Businesses will stop and ask themselves where they should choose to go on that basis. I have been told anecdotal evidence of companies beginning to move their functions away from the UK because of the long-term path of the immigration system. It is, of course, more than just a concern about fees; it is the direction of policy and the complexity of our rules that are in question. I mention complexity in this context because those who have to find their way around the system, being charged what are perceived as high fees—and I hear the point made about the cost—have higher expectations of service. It is quite telling that many businesses engage lawyers and maybe other professionals to advise on how to cope with the system.

The Merits Committee, of which I am a member, commented in its report to the House of the limited analysis of the impact of the increases on business. The letter from the CBI published in the report was really quite measured and clear; it did not use extreme language in any way. It pointed out that in the view of the CBI,

“employers have yet to see the improvements that were promised on the eve of last year's increase, or that of 2010”,

and that,

“where UKBA is seeking to charge firms commercial rates, and is seeking a return … firms have the right to expect a higher level of service”.

I have a question that is obvious, to me, but it may be too soon to give an answer to it. What would be the effect on efficiency and level of service of splitting the border agency into two component parts? It was against this background that I rather blinked to see the proposal for a premium sponsor scheme. I put down a Motion directed to this but decided to withdraw it and simply raise the points during this debate. I have real concerns about this being the thin end of a wedge of our creating a first class and, to use a railway operator’s language, a standard class which is really second or third class. The service is private, but it is a public service as well. I reflect that if there is an attitude that immigration is not of general social value, then that impacts on the whole policy. As I said, it is a public as well as a private service.

--- Later in debate ---

If I may, I will move on to some of the concerns about consultation put forward by my noble friend Lady Hamwee. She asked what consultation we had undertaken before introducing these changes, particularly in relation to what she called the first-class and standard-class service. We consulted informally with a number of licence sponsors, representative bodies and other government departments about the proposal for a sponsor premium service, and that enabled us to confirm that a number of high users of the system would be willing to pay for an enhanced service from the UK Border Agency. We have gained, we believe, a clear understanding of which benefits would be welcomed in addition to the standard sponsored package. I do not accept the suggestion that the new premium service is just a way of making additional income. We have listened to the potential customers of UKBA and they have told us that they would be willing to pay for it. We think that is a matter that we should accept.

[Baroness Hamwee]

I hope that I did not put it in quite the stark terms in which he reflected it back to me. I was concerned, rather than making any allegations, because there are no details yet of a scheme to which I can respond. Is it intended that, when there is more clarity following the work to which he has referred about the particular services that might usefully come within such a scheme, there will be a further round of consultation, discussion or conversation—call it what you will—before the scheme is finalised? What I have picked up is the feeling that there is a real lack of clarity and that it is difficult for employers to respond at present.

[Lord Henley]

My Lords, I apologise for that misunderstanding of the point being made by my noble friend. I cannot give her an absolute guarantee that there will be further consultation, but I will certainly make sure that she is provided with the appropriate clarity that she seeks. We would obviously want to make sure that employers have that clarity as well, because if they do not they will not be able to make use of the system.

I turn to my noble friend’s questions, of which I was grateful that she gave me notice. First, with regard to the tier 1 post-study work closure supplemental, as my noble friend accepts, the focus of the debate should be on fees, but we have to look at the matter in the wider policy context for immigration. The tier 1 post-study work route will close on 6 April; currently it provides graduates with unrestricted access to the labour market for two years. A UKBA survey revealed that 30 per cent of those with post-study work leave were in low-skilled employment or unemployed. In a time of high unemployment in the UK, it was right that we should close that route. From 6 April graduates who wish to remain in the UK and work will need to apply through tier 2 and the points-based system and need to be sponsored by a licensed tier 2 sponsor. The minimum salary threshold for tier 2 is £20,000 or the appropriate rate for the job as detailed in the tier 2 codes of practice, whichever is the highest.

My noble friend also asked about the advice from the Migration Advisory Committee and what we had or had not asked it. The committee was asked to advise on appropriate economic criteria for settlement and recommended a simple pay threshold as a good indicator of skill. The cooling-off period that we referred to, which my noble friend asked about, was not part of its remit, but that was covered in the Government’s consultation document on employment-related settlement, tier 5 and overseas domestic workers. We believe that it was right to include in the changes to Immigration Rules laid on 15 March, as part of the package of changes intended to break the link between work and settlement and to reposition tier 2 as a primarily temporary route, a 12-month cooling-off period for tier 2 migrants.

I think that I have dealt with most of the points. I wanted to get on to the general criticisms of my noble kinsman—that is, my noble friend Lord Avebury—about service standards and the question as to whether refunds would be paid. As I made clear earlier, we believe that the UK Border Agency is meeting most of its targets. I accept that there will be failings on occasions; that is always the nature of things. The UKBA monitors and publishes its own service standards and makes them available on the website. It is committed to improving the service that it provides; that is why I talked about the investment and why the fees are important. It will take steps to address issues that may prevent it from achieving its service standards.

My noble kinsman then finally asked whether refunds could be paid for bad decisions. He quoted a response from the last time he tried to get something on this from the previous Government, from the noble Lord, Lord West. I do not always agree with everything that came from opposition spokesmen when they were in government, or otherwise, but on this occasion I am in full agreement with the noble Lord, Lord West, and there has been no change in policy. I hope that that deals with most of the points.