Immigration and Nationality (Fees) Regulations 2012

Lord Hunt of Kings Heath Excerpts

Wednesday 21st March 2012 Grand Committee

[The Minister of State, Home Office (Lord Henley)]

My Lords, these regulations concern fees charged for visa, immigration and nationality services. The fees paid by those making visa, nationality and immigration applications must be specified in regulations made under Section 51 of the Immigration, Asylum and Nationality Act 2006. Regulations that set fees exceeding the administrative cost of processing an application must be approved by both Houses before they are made; this procedural requirement is imposed by Section 42 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004. Regulations dealing with fees at or below cost are subject to the negative resolution procedure.

The intention is to introduce two sets of regulations on 6 April that will replace existing fees regulations. The first set of regulations will deal with above-cost fees and must be approved by Parliament before it is made, and it is a draft of these regulations that is before the House today. The second set, dealing with fees set at or below cost, does not require prior approval from Parliament and has already been made. The regulations were laid before Parliament on 15 March. I recognise that having fees in two sets of regulations makes things a little complicated, and I am happy to take points on any of the fees proposals here today.

In general we are proposing to limit the majority of increases to 2 per cent. For example, we propose to increase the short-term visit visa applications by 2 per cent, as we recognise the importance of the visitor route to the United Kingdom economy. This is still about half the actual cost to the UK Border Agency of processing this type of application. Increases to fees that do not follow this approach include tier 1 general extensions of leave; these will increase by 50 per cent. This route is open only to those currently in the UK on a tier 1 general visa that is due to expire during 2013 and confers benefits including unrestricted access to the United Kingdom labour market, and ultimately the ability to apply for indefinite leave to remain. The new fee better reflects the value of these benefits.

Fees for tier 2 visas for migrants coming to the UK to work for a sponsor will rise by 20 per cent to £480; an incremental step towards our objective of aligning fees for the original entry visa with the fee paid in the United Kingdom to extend stay in this route. Thirdly, for media representatives coming to the UK to work for an overseas employer on a long-term assignment, this fee is being increased to align with the tier 2 visa fee to reflect the similarities between the two routes. Fourthly, for tier 2 intra-company transfer visas of less than 12 months’ duration and extensions under this route in the UK, this increase reflects the benefits conferred by this route.

The tier 4 visa fee is being increased to cover the full costs of processing these visas. In the current economic climate we can no longer subsidise these visas. The visa for extended family members of refugees and those with humanitarian protection coming to the UK is also moving to cost recovery. We are aligning it with similar settlement visa routes following changes that were introduced in the Immigration Rules in 2011.

Licence fees to those organisations that sponsor migrants in the UK are increasing to better reflect the administrative costs. For large organisations sponsoring employees to work under tier 2, the fees will be £1,500, while for small businesses and charities we will charge £500.

New fees being introduced include a graduate entrepreneur route in the points-based system. This route is being developed for those who have been identified by United Kingdom universities as having developed world-class innovative ideas or entrepreneurial skills but have yet to meet the requirements of the tier 1 entrepreneur route. This will allow them to develop their business in the United Kingdom

The new fees will cover extending the mobile biometric enrolment service to include applications for indefinite leave to remain, widening the range of services that we can offer our customers, and enabling those who have come to the UK under the tier 1 exceptional talent route that launched last year to extend their stay; this will ensure that we retain the skills and talents of those whom we have attracted to work and base themselves here.

Finally, the new fees will also cover providing certain stateless persons with the ability to acquire—or renounce—the status of British protected person. In addition, the fees paid by dependants of members of the Armed Forces will be frozen at current levels in recognition of our commitments under the Armed Forces covenant.

Legal migration brings economic, cultural and social benefits to the United Kingdom. We will continue to ensure that fees for immigration and nationality send a clear signal overseas that the country will go on welcoming the brightest and the best, and these proposals support that message.

We also continue to monitor the economic, equality and diversity impacts of our changes and to ensure that our fees continue to be priced at levels which make them competitive when compared with those in other countries.

I believe that these regulations provide a basis for a sustainable immigration system that noble Lords will want, and I commend them to the 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.