The
Committee consisted of the following
Members:
Blunt,
Mr. Crispin
(Reigate)
(Con)
Bottomley,
Peter
(Worthing, West)
(Con)
Brake,
Tom
(Carshalton and Wallington)
(LD)
Byrne,
Mr. Liam
(Minister for Borders and
Immigration)
Campbell,
Mr. Alan
(Lord Commissioner of Her Majesty's
Treasury)Cox,
Mr. Geoffrey
(Torridge and West Devon)
(Con)
Green,
Damian
(Ashford)
(Con)
Gwynne,
Andrew
(Denton and Reddish)
(Lab)
Huhne,
Chris
(Eastleigh)
(LD)
Kemp,
Mr. Fraser
(Houghton and Washington, East)
(Lab)
Laxton,
Mr. Bob
(Derby, North)
(Lab)
Lucas,
Ian
(Wrexham) (Lab)
Mullin,
Mr. Chris
(Sunderland, South)
(Lab)
Timpson,
Mr. Edward
(Crewe and Nantwich)
(Con)
Wilson,
Phil
(Sedgefield)
(Lab)
Wright,
Mr. Anthony
(Great Yarmouth)
(Lab)
Eliot Wilson, Adrian Jenner,
Committee Clerks
attended
the Committee
The following also
attended, pursuant to Standing Order No.
118:
Milburn,
Mr. Alan
(Darlington)
(Lab)
First
Delegated Legislation
Committee
Wednesday
18 June
2008
[Mr.
Greg Pope in the
Chair]
Draft Immigration and Nationality (Fees) (Amendment No. 2) Regulations 2008
2.30
pm
The
Minister for Borders and Immigration (Mr. Liam
Byrne): I beg to
move,
That
the Committee has considered the draft Immigration and Nationality
(Fees) (Amendment No. 2) Regulations
2008.
The
Committee will know that this year we are making some fairly
significant changes to the immigration system. Among those reforms the
most important change is the introduction of the points system, which
we launched in February. On 25 February I stood here and made
regulations that set the fees for the first part of that system, and
said that this year we would introduce additional immigration and
nationality fees. Todays regulations set the fees for the next
part of the points system and relate specifically to services for which
we plan to charge more than the cost of delivery. We make the
regulations under powers given to us in section 42 of the Asylum and
Immigration (Treatment of Claimants, etc.) Act 2004 as amended by
section 20 of the UK Borders Act 2007.
We need to
make a slight technical change to the explanatory memorandum where it
states that the fees for registration as a British citizen under the
British Nationality (Hong Kong) Act 1997 will be charged under the
powers in section 42(1) of the 2004 Act.
Peter
Bottomley (Worthing, West) (Con): Which
paragraph?
Mr.
Byrne: It is in the second line of the first table at the
top of page 4. However, that reference should be to section 42(2A) of
the Act. Apologies for
that.
Peter
Bottomley: On a point of order,
Mr. Pope. I am not absolutely certain that I have
identified on page 4 what the Minister is quoting from. That might be
my fault, but could he double-check? Is that the page that begins,
Table
B?
Mr.
Byrne: I am referring to page 4, table A, last
line.
Peter
Bottomley: Further to that point of order,
Mr. Pope. It is on page 3 of the explanatory
memorandum available to
Members.
The
Chairman: That is a fair point.
Minister?
Mr.
Byrne: I am sorry, but I missed
that.
Peter
Bottomley: In the copies available to other Committee
members, it is on page 3so that we are working off the same
table.
Mr.
Byrne: I am grateful to the hon. Gentleman for that
clarification.
In
setting todays fees, we were guided by two principles: on the
one hand, the need to maintain the UKs international
competitiveness, and on the other, the need to raise money in line with
the value that we are creating for foreign nationals seeking to work
here and the businesses that employ them. In both tables A and B,
broadly we are seeking to increase prices in line with the prices that
we charged last year. One fee departs from that principle and another
is without precedent. We are seeking to increase by some margin the fee
for tier 1 investors and entrepreneurs, which we proposed this year to
set at £600, reflecting the value to investors and entrepreneurs
of the opportunity to work in the UK.
The new fees
for which there are no real precedents are those that we propose to
charge for sponsors, and in particular the licences for medium and
large organisations. Licence sponsorship is an important part of the
points system, and the fee will cover a four-year licence period and
enable businesses to sponsor in a number of migrants. We have consulted
extensively on that and think that we have set it at the
right level. I anticipate that about 4,500 sponsors will fall into that
category, out of about 15,000 sponsors whom we anticipate will register
under the points scheme this
year.
Damian
Green (Ashford) (Con): The Minister says that large
sponsors will be able to bring in a number of people. Is that an
indefinite number or is there a limit on the number for a particular
time
period?
Mr.
Byrne: We will seek to set, with the individual businesses
concerned, an indicative range as to the number of migrants they will
be able to sponsor, to help to monitor their behaviour. As the hon.
Gentleman will know, however, the point system is ultimately
demand-led, so, as long as jobs are offered first to UK citizens and EU
migrants locally, it is up to businesses to decide how best to fill
vacancies.
The Committee
will want to know how much we plan to raise through the measures and
what we plan to spend the money on. In the financial year 2008-09, we
expect to generate about £50 million from the fees in the
regulations, which will go toward the total £671 million that we
project to raise from the fees paid by migrants. That money is a
significant part of the £2 billion that will fund the UK Border
Agency in the year ahead. The fees strike a balance between being fair,
reasonable and necessary and I commend the regulations to the
Committee.
2.36
pm
Damian
Green: I am grateful to the Minister for his explanation
of the order and the explanatory memorandum. As he has said, we seem to
have been down this course before, and we have developed a routine for
these fee-setting debates. He knows that the Conservatives support the
principle of having reasonable charges for people who want to come to
this country, and we accept that the fees should cover more than the
administrative costs.
When the
Minister winds up, it will be useful and illuminating if he explains
how the figure for tier 1, which has increased greatly, was reached. I
am interested to know whether he thinks that he should charge the
highest fee that the market can bear or whether other principles have
come into play, particularly at that end of the economic spectrum.
Those who will come in under tier 1 will be very wealthy and many of
them could, conceivably, afford to pay more if they value coming to
this country so much. With that caveat, it is fair that people who want
to come and live here and to benefit from doing so should be asked to
pay for the processing of their paperwork and towards the enforcement
of the rules.
We also
support the notion that firms that wish to employ migrant labour should
be licensed and approved as being fit to do so. It is important that
companies do not abuse the system or the law, and it is equally
important that they do not abuse employees who are potentially
vulnerable. Will the Minister ensure that there are sufficient staff
and resources to process all the fees and licence applications quickly?
Is he confident that the agency can receive the fees and issue the
licences without the unnecessary delays that have plagued the system in
the past? I have specific reasons for asking that. He will recall that
I tabled a parliamentary question last year asking whether the Home
Office had estimated how many firms would apply for licences to sponsor
and whether it had adequate resources to deal with applications. In a
response last week, he said that, as of 31 May, only 125 businesses had
applied. He also said, and he has repeated this today, that he expects
14,000 businesses to become sponsors, so take-up has been derisory so
far. If he is not slightly alarmed that the figure is so low, he ought
to be. I should be grateful for any assurances that the applications
will be processed on time. Clearly, if they are not, there will be
damage to the economy of this country and to its reputation around the
world.
The
Minister has been helpful in telling us how much the Home Office
expects to recoup. Could he break that down a bit and tell us how much
tier 2 migrants will contribute, and is he completely confident that
the figure that he has estimated the UK Border Agency will raise will
be reached? Can he tell us whether the fees charged at present for the
immigration documents and procedures for which charges are made cover
the costs that they are meant to
cover?
Finally,
what contingency plans does the Minister have if the fees do not rise
to the levels that he expects? Clearly, they are funding essential
enforcement activities of the agency. An economic downturn would,
presumably, lead to a reduction in the number of people coming to work
in this countryit is perfectly plausible to expect that the
numbers will come downso the amount of money he raises may well
be less than he was anticipating a few months ago. What would have to
give? Would some operations of the agency be vulnerable in those
circumstances?
I
hope that the Minister can give us some reassurance on those various
aspects of the order. As I said, we have no objection in principle to
the fees or the
levels.
2.41
pm
Tom
Brake (Carshalton and Wallington) (LD): It is a pleasure
to serve under your chairmanship, Mr.
Pope.
Liberal
Democrats support the principle of the point-based system as described
in the debate that took place on 25 February, and the principle of
raising charges, although, as we mentioned a couple of months ago, we
would like to see some sort of hypothecation so that the money that is
raised could be used to train the UK work force to take the jobs that
are being taken by migrants. Our work force would be better able to
compete for those
jobs.
I
have several questions, some of which have already been asked by the
spokesman for the official Opposition. First, has there been any
revision in the amount that will be raised through the charges? What is
the contingency plan, should there be an economic downturn and the
number of migrants is reduced as economic prospects here deteriorate?
What assessment has there been of the impact of the fees on the number
of arrivals? In particular, what impact will the large increase for
entrance clearances for tier 1 investor or entrepreneur migrants
have?
Finally,
could the Minister confirm a point that was raised on 25 February about
the differential between the charge for a large or medium
companythe £1,000 chargeand small businesses? I
raised concerns about how small the differential was. Could the
Minister confirm whether the £300 that was discussed previously
is, in fact, the small business figure, or whether it relates to
footnote 3 at the bottom of page 3it may be the
Ministers page 4of the explanatory memorandum, which
refers to fees for small sponsors being specified in other regulations?
Is that something that we will return to? Is the figure different from
the £300 that he spoke about on 25 February? I should be
grateful if he would clarify those
points.
2.43
pm
Peter
Bottomley: I would be lacking in courtesy if I did not
make some reference to the previous remarks. Are we to take it as
official Liberal policy that people who come to this country to fill a
gap should be charged extra to allow others in this country to be
trained so that the guest worker will not be needed? That is what we
heard, and unless I am contradicted, I shall assume that that is the
case.
Tom
Brake: I would be surprised if the hon. Gentleman did not
agree that some of the funds could be a useful contribution towards the
cost of training the UK work force. I assume that he would not disagree
with
that.
Peter
Bottomley: As it happens, I disagree completely. I think
that, in general, hypothecation is wrong. People should go for
cost-clearing levels of charges, although, as my hon. Friend the Member
for Ashford said, my party would support some extra charging in some
circumstances for some purposes. But, in general, the old rules are the
right rules: hypothecation is improper, and charges should not be used
as taxation. I take taxation to be taking money from one set of people
to use for some other specific
purpose.
Having
dealt with the previous contribution, I will move on, if I may. I think
that the Minister mentioned the figure of £671 million. Is that
all the surplus, over and above costs, or is it the total recovery,
from which the costs will be taken? I am not asking the question to
make a point; I am just trying to establish what levels of surplus
recovery we are talking about.
If a tier 1
applicant is granted permission to come here, at the fees in the order,
are they able to bring in a dependanta spouse or recognised
partner, or a child? If so, is a similar application required for the
dependant, and is the dependant required to apply at the same tier as
the applicant, or are they, if they are allowed in at all, to come in
for free, at cost recovery, or at a lower tier? It would be helpful to
know whether that matter has been decided.
I apologise
if I am asking questions that people who may have helped the Bill to go
through know the answers to; I was not on the Bill Committee.
I would like
to go back to an earlier point, when the Minister was speaking about a
particular page on the explanatory memorandum. I just want to
double-check that the Ministers copy of the explanatory
memorandum goes to paragraph 9 and that there is not some other
paragraph that has come in, which is missing from our copies. I presume
that this is just an issue of pagination, rather than anything
more.
What
is meant by a large sponsor? Is it someone who chooses
to make applications for more than a certain number of people coming
into this country to work, or is it the size of the business itself?
For example, if a single-handed Indian or Bangladeshi restaurant in my
constituency was able to establish that they needed to have five tier 1
applicantsI am not suggesting that they would, but suppose they
didwould they count as a large sponsor because they want a
large number of people, or is it the case that if someone already
employs 100,000 people and wants one more person they are a large
sponsor? It would be helpful to know the answer to that
question.
I
wanted to discuss one point that has come up from experience in my
constituency. For a time, the Rustington Methodist church had a
minister who was normally in south India; there was a partnership
arrangement to allow him to come here. I am not sure that he came here
because the church could not find anybody else or because it was part
of his development as a minister to come and work in this country for
two or three years. I would be grateful to know whether the reference
to a ministers religion requires their presence here to be due
to a shortage of ministers or whether it is possible to have an
arrangement, either with an exchange or without an exchange, for
someone who is a minister of religion, whether Christian or another
faith, to be able to come and work in this country. Presumably, such a
person would not have a large sponsor, so there would be a lower fee,
but I would still be interested to know what the points-based system
would mean for that person, and whether the requirement that the post
cannot be filled from within the European economic area would
apply.
There may be
other issues that come up later on during the discussion. However, I
would like to put those questions to the Minister. If any of them are
questions that it would be inappropriate for the Minister to try to
answer now, I would happily receive a reply by
correspondence.
2.48
pm
Mr.
Byrne: There were a couple of points that were raised by
the hon. Gentleman in his contribution to the
debate that I will not test the Committees patience by
responding in detail to now; instead, I will deal with them in
correspondence. Most of those issues have been set out in the statement
of intent on the points system that I published for tier 2 earlier this
year. That statement of intent will deal explicitly and effectively
with the last point that the hon. Gentleman made, but also with the
point about how we charge for dependants of people coming in under the
points system.
The important
point that I wanted to address now was the difference between large
sponsors and small sponsors. We are not trying to invent a new
distinction between large and small; we
want to use the definition of small companies that is set out in the
Companies Act 2006. We have decided that small sponsors, as
defined as a small business in the 2006 Act, should pay less than
sponsors that are bigger. For the Committees benefit, the
definition of a small business in the 2006 Act is one with a turnover
of not more than £5.6 million. I do not know how big the
restaurants in the hon. Gentlemans constituency are that he is
referring to, so I have no idea whether their turnover will
be higher or lower than £5.6 million. Other definitions include
the company having a balance sheet of not more than £2.8
millionI confess that I know even less about the balance sheets
of the restaurants in his constituencyand employing not more
than 50 employees. Those are the distinctions that we have tried to
draw.
We recognise
that some small businesses are unable to fill their skills needs from
the local labour market and might therefore need to sponsor people from
abroad at times. We do not want to put those businesses out of business
by charging exorbitant fees, which is why we are introducing a two-tier
charging arrangement. Those fees are set at cost recovery level, rather
than above cost recovery. The Committee is debating only those fees
through which we seek to recover more than our costs. The UK Border
Agency is allowed to set cost recovery fees through statutory
instruments that are subject to the negative resolution procedure, so
those fees have already been passed.
Tom
Brake: I hope that the Minister is about to confirm that
the fee for small businesses is £300. Will he clarify the
position for charities? Footnote 3 on page 3 of the explanatory
memorandum refers to small businesses and charities. Is there a
distinction between a large charity such as Oxfam and a small one such
as a local charity, or will they both be considered to be small
companies and therefore benefit from the subsidised
rate?
Mr.
Byrne: I am grateful for the opportunity to clarify that
point. Charities are in the same category as small businesses and will
therefore benefit from the lower fee, which is indeed
£300.
I am grateful
for the support that there has been in the Committee on the principles
of over-cost recovery and of charging people, on some occasions, what
the service is worth to them. Entrepreneurs and investors are able to
afford a little more. Under the points system, an investor is an
individual of high net worthmore than £1
millionand an entrepreneur is someone who has £200,000
disposable in the UK. We have tried to keep the fees for tier 1
entrepreneurs and investors in line with those for tier 1 migrants and
more generally.
The hon.
Member for Ashford made an important point about the work that needs to
be done in coming months to get businesses signed up and licensed. He
will be delighted to hear that we will be doing a little advertising
over the summer to encourage businesses to register. I know that either
he or his former colleague expressed concern about the way in which
advertising was framed, but it is none the less important to get our
message out if we are to address his point. About 160 compliance
officers will be in place over the summer and thereafter to help to
sign people up.
The hon.
Gentleman also asked about contingency arrangements, which have been
built in. Of course, we keep fees under constant review, so we will
have the opportunity to return to Committee and make adjustments, if we
need to take into account changing demand. The set of fees before us
form part of about £100 million of over-cost recovery that we
are seeking to raise. Our total fee income for this year is projected
to be £671 million, of which about £100 million will be
made up from over-cost recovery.
Damian
Green: The Minister has been very generous with all his
answers, with one exception: why £600? What principle or other
method caused him to arrive at that figure? He gave the qualifications
that those paying the fee will require. That figure could be
£600 or £6,000in many casesand it would
not make much difference. I am fascinated to know how he arrived at the
figure.
Mr.
Byrne: That is an excellent point. We have tried to
maintain the tier 1 fee for entrepreneurs and investors in line with
the fees charged for other tier 1 migrants. When we set the latter, we
looked internationally at fees charged, in particular, in America,
Australia and Canada. We felt that the tier 1 fees that we introduced
were pretty much in line with those charged internationally. We did not
want to overcook it at this stagethese are big reforms and we
do not want to deter from coming those whose skills we need in this
country, because of
the fees. However, the hon. Gentleman is right to make the point that we
might be able to go further in this category, which is why my
commitment is to keep the fees under constant review and not to
hesitate to come back if I think that we can charge more
reasonably.
Tom
Brake: Has an assessment been made of whether the figure
of £600 will lead to a downturn in the number of investors or
migrants coming to this
country?
Mr.
Byrne: We considered that in the impact assessment
published earlier this year, but obviously it is difficult to tease
apart from other economic factors the impact of costs on demand.
Overall, visa demand was slightly lower last year than the year before,
but economic circumstances are different. However, the hon. Gentleman
was right to make the point that I think he was making: that we should
keep such matters under
review.
Peter
Bottomley: I try to spot interesting things in statutory
instruments. I suggest that the Minister recommends to the Plain
English Campaign that it considers for an awarda good
awardarticle 2(2)(b) for describing the provisions in very good
and clear
English.
Mr.
Byrne: I shall take that advice on
board.
The
Chairman: The Minister has offered to answer in
correspondence some of the questions raised in debate by the hon.
Member for Worthing, West. It would be a courtesy if he could copy in
other Committee
members.
Question
put and agreed
to.
Resolved,
That the
Committee has considered the draft Immigration and Nationality (Fees)
(Amendment No. 2) Regulations
2008.
Committee
rose at three minutes to Three
oclock.