Draft Immigration and Nationality (Fees) Regulations 2011

The Committee consisted of the following Members:

Chair: Mr Roger Gale 

† Afriyie, Adam (Windsor) (Con) 

Clwyd, Ann (Cynon Valley) (Lab) 

† Cruddas, Jon (Dagenham and Rainham) (Lab) 

Dobson, Frank (Holborn and St Pancras) (Lab) 

Dorries, Nadine (Mid Bedfordshire) (Con) 

† Green, Damian (Minister for Immigration)  

† Huppert, Dr Julian (Cambridge) (LD) 

† McFadden, Mr Pat (Wolverhampton South East) (Lab) 

† Mahmood, Shabana (Birmingham, Ladywood) (Lab) 

† Morris, James (Halesowen and Rowley Regis) (Con) 

Paisley, Ian (North Antrim) (DUP) 

† Perry, Claire (Devizes) (Con) 

† Pritchard, Mark (The Wrekin) (Con) 

† Rutley, David (Macclesfield) (Con) 

† Tami, Mark (Alyn and Deeside) (Lab) 

† Ward, Mr David (Bradford East) (LD) 

Winnick, Mr David (Walsall North) (Lab) 

† Wright, Jeremy (Lord Commissioner of Her Majesty's Treasury)  

Simon Patrick, Committee Clerk

† attended the Committee

Fourth Delegated Legislation Committee 

Monday 28 March 2011  

[Mr Roger Gale in the Chair] 

Draft Immigration and Nationality (Fees) Regulations 2011 

4.34 pm 

The Chair:  Good afternoon, ladies and gentlemen. I apologise. Business on the Floor of the House and a question to the Prime Minister delayed me in the Chamber. 

The Minister for Immigration (Damian Green):  I beg to move, 

That the Committee has considered the draft Immigration and Nationality (Fees) Regulations 2011. 

It is good to see you, Mr Gale. I will talk long enough for you to regain your breath, which I hope will be helpful. 

As hon. Members who have been following the issue closely will recall, I came to the House on 8 February and subsequently obtained approval to charge for visa, immigration and nationality services under the Immigration and Nationality (Fees) Order 2011. I said at the time that it would be a debate of two halves. This is the second half, in which we debate the specific fee levels. 

We are debating the fees against a difficult financial backdrop for the UK Border Agency, the public finances and the UK economy as a whole. The UKBA has committed to reducing its costs to the taxpayer by up to 23% during the next four years. 

Alongside the funding provided by UK taxpayers, the UK Border Agency has firmly established the principle, initiated by the previous Government, that those who benefit directly from our immigration system should contribute an appropriate share towards the costs of running it. The proposals that we are debating today further support that principle and will help ensure that the UKBA can continue to deliver controlled migration and a secure border within the funding envelope set out in the spending review. 

The fees paid by those making visa, nationality and immigration applications are set out in regulations made under section 51 of the Immigration, Asylum and Nationality Act 2006 and in accordance with the powers granted 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. 

Under section 42 of the 2004 Act, the Secretary of State can set a fee for an application at a level that exceeds the administrative cost of determining the application. The way in which our legal powers are defined means that we must also specify fees in separate regulations under the powers in section 51 of the 2006 Act. Those regulations are to set the fees for applications, processes and services that are provided at or below the administrative cost of determining the application. Those regulations were laid in Parliament on 16 March 2011.

They are subject to the negative procedure and are not debated in the House. I recognise that having fees in two sets of regulations makes things complicated and I will be happy to take points on any of the fees proposals here today. 

In setting the fee levels, the UK Border Agency takes into account a broad range of factors. We are mindful of the need to ensure that the UK remains an attractive destination for the brightest and the best to come to in order to work, study and perform, and we continually review our fees to ensure that they remain competitive for the entitlements that they offer. 

The proposals that we are debating today have been developed in partnership with colleagues across Whitehall Departments and within strict financial limits agreed with the Treasury. They continue to reflect the principles supported in the public consultation on fees that the UKBA ran between September and December 2009, and have been assessed for their economic and equality and diversity impacts. 

In general, we are proposing to limit the majority of increases to less than 10%. We have recognised the difficult economic climate within which many UK businesses are operating and propose increasing sponsorship application fees by 3%, while maintaining our concessions for small businesses and charities that want to sponsor migrants. The increases in those fees will be the first since the points-based system was introduced in 2008. 

The fees that have been increased by more than 10% include those for dependants applying to extend their leave in the UK at the same time as the main applicant. Those were previously set at between one quarter and one third of the main applicant’s fees. We propose increasing that ratio to half the main applicant fee. That continues our policy better to align our fees in and out of the UK, where all dependants already pay the full fee, and better reflects the fact that each individual within any given application bears a processing cost to us, as well as sometimes an independent set of entitlements. 

We are also increasing by more than 10% the fees for applications made overseas under the tier 1 post-study work route. Those will increase by more than 30%. That will better align this fee to that which is payable under this route when the application is made, as it is in the vast majority of cases, in the UK. 

The fees for visa applications under tiers 4 and 5 of the points-based system will also increase by more than 10%. But the fees for those routes continue to be charged at below the level of the administrative costs of processing the applications. 

In addition, the fee for the student visitor visa that enables a student visitor to attend an English language course for up to 11 months has been set at cost recovery level—£140. We think that it is right that that fee better reflects the increased entitlements associated with that route. Student visitors entering for less than six months will continue to pay the price of a short-term visit visa, which is £76 under our current proposals. 

New fees being introduced include fees for amending a previously issued nationality certificate, other than when that amendment is being made to correct an error by the UKBA; providing to certain stateless persons the ability to acquire the status of British protected person; registration as a British citizen for children of foreign national soldiers serving in the UK armed forces, which

will align our fees legislation to reflect rule changes that have simplified such registrations; and tier 2 intra-company transfers coming to the UK for less than 12 months, where applicants pay a lower fee than those coming for more than 12 months. 

I am committed to sending a message overseas that the UK remains open for business, and these proposals support that message through fees that remain priced at competitive levels. We welcome the brightest and the best, whom we all know contribute significantly to the UK economically, culturally and socially. However, providing an effective immigration system that controls the number of people coming to the UK costs money. Our proposals will mean that migrants meet a greater proportion of the costs of providing the services, reducing the contribution required from general UK taxation.

4.40 pm 

Shabana Mahmood (Birmingham, Ladywood) (Lab):  It is a pleasure to serve under your chairmanship, Mr Gale. I thank the Minister for his comments. The Labour party agrees with a justification for fees that relies on balancing the burden of administration between the migrant and the taxpayer, both of whom receive benefits through the immigration system. 

The UKBA will have a cut in its budget of some 20% and a loss of 5,200 jobs. The Minister says that the increase in fees is required to make up the shortfall after efficiency savings to be made by the UKBA over the spending review period have been taken into account. The first paragraph of the impact assessment states that there is an estimated income shortfall of £80 million to £90 million in the financial year 2011-12, and to address that, we have the regulations before us today. On page 14, the section on the impact on the UKBA states: 

“UKBA’s annual income is estimated to rise by £65.4 million as a result of fee changes, and its administrative cost is estimated to reduce by £0.2 million.” 

Will the Minister clarify whether there will still be a shortfall in the UKBA’s budget, or whether the gap is accounted for by other charges and income to the UKBA? If so, will he clarify what those are? 

I note that under the regulations, the proportion of the UKBA’s running costs to be met by fees income will rise from 30% to 36%. Will the Minister tell the Committee whether we can expect to see that proportion rise even more significantly over the life of this Parliament? Do the Government have a threshold on the ratio of fees income to the agency’s running costs that they would like to reach? Also the Government wish to reduce net migration to the tens of thousands by 2015. Has the Minister taken into account the levels of migration on an annual basis and the level of fees to be charged if they are to meet that target? 

It is important that the fees structure does not inhibit the UK’s ability to attract migrants and visitors who make a valuable contribution to our economy and the country. Whether that level of fees ensures that that is the case will be a judgment much in the minds of the Committee today. Will the Minister say more about the risks that have been considered to the UK’s competitiveness with other countries and markets? We compete for talent and investment on the world stage, and the level of fees and the Government’s overall approach to migration have an impact on the willingness of talented people, of

the sort that we want to see come and work here, to consider the UK as a destination. Will he assure the Committee that we will not be in a position where, as a result of these fees, the UK’s ability to compete is diminished? How do the UK’s proposed fees compare with those of our main competitor countries? 

I also note that the regulations on dependants will mean that rather than dependants paying 25% of the main applicant’s fee if both are submitted at the same time, they will pay 50%. I understand that that is part of a phased process to bring it into line with the provisions for visa posts overseas, where dependants pay the same as the main applicant. Is there a timetable for when that will be achieved? 

There have been several changes to the fees regime recently. Fees regulations were considered by the House last November and February. Taken as a whole, the changes are significant and wide-ranging. I know that the acting chief executive of the UKBA has indicated that ways of introducing greater stability to the fees regime in future are being considered. Will the Minister expand on that and explain what is being considered and what the timetable for any such changes might be? In particular, will he consult widely before any new structure for setting the level of fees is brought in? 

The regulations relate to fees where the cost of the application is higher than the administrative cost to the agency, in order to allow for cross-subsidisation of other visas. Such regulations are subject to an affirmative resolution procedure, but other fees regulations are subject to a negative resolution procedure. Does the Minister have any plans to simplify the legislative framework to ensure that the House can consider all changes to fees at the same time, in the same way or, indeed, in both respects?

May I also refer the Minister to the explanatory memorandum, particularly paragraph 7.22, where there is some detail on the provisions to British protected person status? Will he say a bit more about how many people are affected and what level of change we might see there? At paragraph 7.3, there is some detail about a new case-working service, but it is a little bit thin. Will the Minister explain when and how that will be brought in and what the related costs of that case-working service will be to the UKBA? 

Paragraph 7.34 mentions the mobile case-working service, which is a pilot service providing a bespoke service for, I assume, premier league football clubs and City firms which paid around £15,000 for assistance with application processes and so on. That has now decreased to £6,000. Will the Minister explain why there has been such a decrease in that cost, what the experience of that pilot was and what the plans are for that in the future? 

Finally, will the review of fees take place in line with the review of the level of the immigration cap itself and the new limits on student numbers? To ensure that there is greater stability and clarity in the regime, we need to ensure that these reviews take place alongside each other. Of course, they have to take account of the number of student and other visas and the impact that they have on fees income as a result. Will the Minister explain more about how those reviews will take place, given that we have a cap on the levels of migration? 

4.47 pm 

Adam Afriyie (Windsor) (Con):  I do not intend to detain the Committee for long, but I would like to give the Minister a bit of thinking time. There is a very big difference between an economic migrant coming here to seek economic benefits and a migrant who is coming here fleeing terror and persecution. Will the Minister say a few words about whether asylum applications and final charges for those who have achieved permanent settlement here are affected by the statutory instrument? Generally, what is the Government’s attitude? Is it right that somebody who is genuinely fleeing persecution, torture and perhaps murder and death should be treated in the same way as those who are coming here for economic benefits? 

4.48 pm 

Damian Green:  I thank the hon. Member for Birmingham, Ladywood for her range of questions, which are pertinent and highly considered. Important issues have been raised that deserve such a level of scrutiny. 

The hon. Lady asked a question arising from the impact assessment about the shortfall. There are wider policy changes that, coupled with the spending review settlement, leave a shortfall of around £80 million. As she has identified, that is the case even after the assumptions made about these fees increases. She went on to ask how that would impact on UKBA performance. As she correctly said, over the course of the spending review—I emphasise that it is not in the next year, but in the next four years—we are planning to reduce full-time posts by about 5,200. We aim to maintain service standards—both in terms of time and quality—as we reduce costs by improving productivity. We are achieving that through investment in technology, moving to electronic rather than paper applications and case files, improving work flow management and having more efficient security checking arrangements. Those proposals will ensure that while we are reducing costs, we are increasing income levels as we shift the contribution for the migration system from the UK taxpayer to the migrants who significantly benefit from it. 

The hon. Lady also asked about the threshold of the contribution level. Clearly, increases to fees must be done carefully to ensure that they do not drive down demand. I should emphasise, as a general point, that we do not use fees as a route towards controlling the numbers of migrants; we use them simply to ensure that we can fund the system as efficiently as possible, with those who benefit from it most—the migrants—making a significant contribution. Within that general framework, there is no set threshold at which we aim. 

The hon. Lady asked whether the fees might jeopardise the UK’s international competitiveness. I reassure her that we regularly monitor the international competitiveness of the fees, and we factor those comparisons into our fees development work. If she would like specific examples, our visitor visa fee is £76, the USA visa is £90 and the Schengen visa is £51—that is for one visit lasting up to three months, whereas in most circumstances our visit visa is for multiple entry over a period of up to six months. To take one of the more recently topical examples, our student visa fee is £255, America’s is £450 and Australia—our other significant competitor in the English-language market—charges £343. I hope that I have

reassured the hon. Lady that that does not affect our international competitiveness. In fact, as our visa system does as a whole, our visa fee system supports the Government’s growth agenda. 

On the increase in the ratio of fees for dependents in the UK compared with the cost to the main applicant, that increase is fair. It reflects the fact that each individual within a given application bears a processing cost. However, we will obviously monitor the impact to help manage the transition to the alignment of dependents’ fees with those paid by the main applicant. 

Mr Pat McFadden (Wolverhampton South East) (Lab):  To go back to what the Minister said about student visas, has he had any representations from Universities UK or other organisations representing higher educational institutions? I do not expect him to have them right in front of him, but if he has, what was their tenor in relation to what he said about Australia, the United States and other countries that compete for international students? 

Damian Green:  I am happy to report to the right hon. Gentleman that we had more than 30,000 responses to the consultation, many of them from universities. The universities were worried before they saw our final proposals, but on the day we announced them—when we were able to explain what we were doing—there were supportive statements from Universities UK and the Russell group. It is fair to say that universities were worried about the proposals, but on the day of their announcement universities welcomed them. Colleagues and I are continuing with our programme of meeting vice-chancellors to explain those proposals. 

I should also point out that, although there is much debate about the student visa fee, it is a minuscule proportion of the amount of money that a foreign student will spend to study at a British university. The price of a tier 4 visa represents less than 1% of the total cost of coming to study in the UK for three years; the tuition fees and the cost of living are obviously much more important. In the student field, the idea that the visa fee is a significant dampener on demand does not stand up to the most cursory analysis. 

The hon. Member for Birmingham, Ladywood asked about British protected person status, which means a person connected to a former British protectorate or protected state, such as Uganda, who did not acquire the citizenship of the territory concerned when British protection ceased. The intention is that that status will eventually disappear, and clearly it will run out as time goes on. The hon. Lady asked about specific numbers—there have been two applications in the past 10 years. As she will see, that is not a desperately significant part of the proposals. 

The fee proposals continue the principles established in previous consultations, the most recent of which was published last year. An overwhelming majority of respondents agreed that the UKBA should continue to set fees flexibly by taking into account wider policy objectives, such as attracting specific groups of migrants who are beneficial to the UK. 

The super premium case-working service offers mobile biometric enrolment in case-working at a location in the UK determined by the customer. It was a new service,

and we set an initial fee of £15,000 per application in the pilot. Although there is some enthusiasm for it, it is fair to say that £15,000 may have been asking a bit much of customers, which is why we have reduced the fee to £6,000. We think that that will set a better balance. An absolutely top-of-the-range premium service will be provided at a fee that will not deter people, and there have been six appointments made so far. 

The hon. Lady also asked about fee waivers and the general justification for charging. If we allow a system to operate where a migrant can raise a claim without a fee, it may encourage migrants to remain unlawfully in the UK and submit speculative claims, which would have an impact on the total costs of the system. The costs have to be met by someone, and therefore, we would need to raise fees from other applicants who have followed the rules, or require a greater contribution from the UK taxpayer. 

My hon. Friend the Member for Windsor asked about maintaining the distinction between asylum applications and general immigration applications. He is right that we treat them in a different way. I add,

however, that once we have accepted someone as a refugee in this country and hopefully, integrated them fully and allowed them to get on with their life, from then on, they have the same rights and responsibilities as a British citizen by birth, or through any other method of entry. That is the point where we make the distinction; it is clearly not at the point where they need help and are applying for asylum. 

I hope I have answered the questions asked by the hon. Member for Birmingham, Ladywood. The regulations are clearly in line with our objective to recover more of the costs of immigration services from users of the system, rather than relying on the UK taxpayer. Our continuing aim is to ensure that the fees make an appropriate contribution to the total costs of the immigration system and to balance that with the interests of UK taxpayers. 

Question put and agreed to.  

4.57 pm 

Committee rose.