Draft Immigration and Nationality (Fees) Regulations 2014
The Committee consisted of the following Members:
† Blunt, Crispin (Reigate) (Con)
† Brokenshire, James (Minister for Security and Immigration)
† Burley, Mr Aidan (Cannock Chase) (Con)
† Burstow, Paul (Sutton and Cheam) (LD)
Connarty, Michael (Linlithgow and East Falkirk) (Lab)
† Fitzpatrick, Jim (Poplar and Limehouse) (Lab)
Flynn, Paul (Newport West) (Lab)
† George, Andrew (St Ives) (LD)
† Hanson, Mr David (Delyn) (Lab)
† Harper, Mr Mark (Forest of Dean) (Con)
Hendrick, Mark (Preston) (Lab/Co-op)
† Milton, Anne (Lord Commissioner of Her Majesty's Treasury)
† Ollerenshaw, Eric (Lancaster and Fleetwood) (Con)
Paisley, Ian (North Antrim) (DUP)
† Spelman, Mrs Caroline (Meriden) (Con)
† Wharton, James (Stockton South) (Con)
† Wilson, Phil (Sedgefield) (Lab)
John-Paul Flaherty, Committee Clerk
† attended the Committee
Thirteenth Delegated Legislation Committee
Thursday 20 March 2014
[Mr Mike Weir in the Chair]
Draft Immigration and Nationality (Fees) Regulations 2014
11.30 am
The Minister for Security and Immigration (James Brokenshire): I beg to move,
That the Committee has considered the draft Immigration and Nationality (Fees) Regulations 2014.
I welcome you to the Chair, Mr Weir, and other members of the Committee to our proceedings this morning.
I am pleased to see my hon. Friend the Member for Forest of Dean in Committee, and I underline what a great job he did when he was the Minister of State with responsibility for immigration. It is great for me to be able to recognise his tremendous contribution to this policy area. When he came before the House on 27 January, he sought to obtain approval to amend the Immigration and Nationality (Fees) Order 2011, which provides powers to charge for visa, immigration and nationality applications and services. I am in Committee today to ask for consideration of the specific fees charged for the applications and services within the scope of that order.
In essence, we go through a two-stage process for immigration-related fees. An order is initially passed—the one that the previous Immigration Minister brought before the House—and then two specific orders are considered, one under the affirmative procedure for those fees above cost level, and another under the negative procedure for those below that level. This picture may be more complex than Members might wish, and I note that the new Immigration Bill seeks to change that, enabling the power to charge the fees and the fee levels to be discussed at the same time. Subject to Parliament’s passing the Immigration Bill, which has left this House and is now in the other place for consideration, we hope to simplify this process and avoid the need for this two-stage debate. The fees debate will then be better equipped for the House. It will be a step forward, and one that I hope is welcomed by Members of all parties.
Moving on to the specifics of the draft regulations, we must balance the need for effective immigration controls with excellent customer service, so that those coming to visit, study or work here feel welcome. Such a system needs adequate funding. It is right for the Home Office to make savings and to improve customer service by increasing efficiency and improving value for money; it is also right that those who use and benefit most from the immigration system contribute more than other UK taxpayers. The proposals that we are debating today further support that principle and will mean that in 2014-15 the Home Office will recover more than half the cost of the immigration system through the fees charged for applications and services.
The draft regulations contain fees that exceed the cost of processing the relevant application or of providing the relevant service in order to reflect the value of the
entitlements provided or the costs of processing other applications. I am happy, however, to consider all fee proposals today, including those set out in the separate Immigration and Nationality (Cost Recovery Fees) Regulations 2014, which have been laid before Parliament.In developing new fees, we have sought to build on responses to the recent consultation on charging where possible. The right hon. Member for Delyn raised the consultation in a previous Committee and I hope that he is pleased that the response to it has been duly published. We will minimise fee rises, especially for routes that support economic growth, by limiting most increases to 4%; offer fee reductions and maintain fees at current levels where possible to signal our support for applications in important routes, including for tier 2 visas and airside transit visas, which are down by a quarter in response to requests from the travel industry; improve transparency by including overseas premium service fees; and pass savings on to customers where fees are linked to unit cost, including for sponsorship and travel documents.
It is our strong belief that charging policy and fee levels should be sensitive to wider Government policy. To succeed in the global race, we must send a message that we are open for business and welcome the brightest and the best. However, we must also ensure an effective and well-managed immigration system that commands public trust, and it must be properly and sustainably funded. The proposals strike the right balance by ensuring that our visa fees continue to compare favourably with those of other countries while providing enough income to fund the system and to improve services. I am therefore pleased to commend the instrument to the Committee and I look forward to the detailed consideration of the measures.
11.35 am
Mr David Hanson (Delyn) (Lab): I welcome you to the Chair, Mr Weir, and thank the Minister for his introduction to the draft regulations. Once again, I echo the thanks to the hon. Member for Forest of Dean for his contributions when in office. I said in a Delegated Legislation Committee yesterday that I welcomed the co-operation with the former Minister. Although the circumstances of his departure were difficult, I hope that he understands that we appreciated the time that he gave to the role.
The hon. Member for Guildford, who is the Government Whip, and the Minister need not worry that we will oppose the draft regulations today. We will not, not least because they relate to a significant sum of money coming into the Home Office budget, and my right hon. Friend the Member for Morley and Outwood (Ed Balls) would tell me that there was something wrong in my opposing this particular instrument at this particular time.
We generally welcome the draft regulations. It is fair and equitable, for the reasons the Minister gave, that those who use the immigration system pay a contribution towards it. The 4% rise in fees across the board, with some exceptions, is reasonable at this time, particularly given that—this is not a political point—the current comprehensive spending review has significantly reduced central Government funding to the Home Office. If income generation can replace that loss of income, that is reasonable.
“Funding for the immigration system will reduce over the 5-year period of the current Comprehensive Spending Review (CSR). Over the CSR period, financial planning requires the Home Office to deliver the maximum amount of fees income agreed with HM Treasury under the CSR. Any income generated above this amount is surrendered to HM Treasury’s Consolidated Fund”.
What is the Minister’s assessment of how much extra income might be generated? If extra income is being generated from fees that the Home Office receives, it seems strange to return that to the Treasury when there is still a potential £50 million black hole in the Home Office budget, still £450 million of savings to be made and a 20% reduction in police funding over three years. Any extra money could be used by the Home Office to—dare I say it?—add extra support to the Border Force to manage drug, alcohol and tobacco seizures at the border, to make sure that the e-Border project works properly or to ensure sufficient cover at Dover, Manchester and Heathrow and other airports and ports to protect our borders. Does the Minister expect any income to be generated over the maximum amount of fees? If so, what will happen?
The impact assessment also mentions “falling application volumes”. What is the Minister’s assessment of falling applications as a result of the new fee levels? There are several helpful assessments of levels of income, but the impact assessment states that the £450 million savings over the spending review
“will not be enough to offset the effect of budget cuts and falling application volumes.”
If applications are falling, there will be an impact on income levels.
The impact assessment also helpfully states that
“fees for the majority of products will need to increase by 4%,”
but also that four products will see increases of above 4%. Those are: applications by in-country dependants—that is, spouses, partners and children; nationality registration applications for main applicants and dependants; long-term visit visas for multiple entries to the UK; and optional premium services that provide a quicker decision than the standard service. The answer may be in the impact assessment, and I accept that the resources of the Opposition are such that I may not have had my attention drawn to every detail that the civil service has before it, but will the Minister say exactly what the percentage rises are for each of those categories? I have not been able to identify that from my possibly cursory glance through the papers.
I looked at the responses to the consultation, and am grateful that the Minister published those before our consideration of the regulations. The majority of those responses came from the education sector, with 29 from universities, schools or associations representing universities and schools. That was interesting. We are still missing an area of potential policy development concerning the British economy and attracting students to the UK. In the summary on page 7 of the consultation response, the key issue raised is said to be
“students and sponsors, and balancing fees against service standards.”
The Government’s response says:
“On the subject of international competition, respondents were particularly concerned with the price of student visa fees and visit visa fees in comparison with competitor countries, and the fact that raising fees would decrease the UK’s attractiveness as a place to work, study and visit.”
Although I will not oppose the order, the Minister should reflect on general policy, including the level of fees for students, to see whether we are not missing a trick for the UK economy by deterring students in what is an internationally competitive market.
Only this morning I had a breakfast meeting with representatives from a number of universities. They remain concerned that the number of overseas students coming to the UK is falling. The issue is not only fees but the more general problem, which the Minister tried to address in his opening remarks, that Britain is perceived to be closed for business and is deterring people. That is worrying.
To back that up, the latest immigration figures, published only recently, show, for example, that the number of visas issued to Pakistani students was down by 55% in the previous 12 months and the number of visas issued to Indian students was down by 21%. The university sector is a great economic generator in many university towns and other towns throughout the United Kingdom. Students pay fees to universities, helping the universities to grow and giving them business. They also spend money in the communities to which they go. Most important is something that is perhaps unquantifiable, that they go away from the United Kingdom with, I hope, a positive vision of what the United Kingdom offers them. Ten, 15, 20 or 25 years later, when they are perhaps the President of their country or the chief executive of their business, they will look back on this country as a positive place.
I will let you into a secret, Mr Weir. I left Hull university 35 years ago—[Interruption.] I know; it is impossible to believe that I left university 35 years ago, but I did. But even today, I look for Hull City’s football result second in that day’s results. I cheered when it was announced that Hull would be the city of culture. If someone mentions Hull, I will be effusive in my support for that city.
I want to ensure that the fee regime that we have in place and the general Government approach, which can be interpreted by some parties outside the House as meaning that we are not willing to accept any immigration, do not preclude from coming here people who will bring wealth and prosperity now and will look fondly on this country in the future. I also want to reflect on the genuine fear expressed by the 29 university organisations that responded to the consultation that
“the price of student visa fees and visit visa fees in comparison with competitor countries…would decrease the UK’s attractiveness as a place to work, study and visit.”
The Minister needs to address that.
Finally, what does the Minister expect to be the cost of live calls to the international contact centre? Hidden deep in the explanatory memorandum is the fact that a new service, “International Contact Centre: Live calls”, will allow people to track their visa application and to make relevant inquiries at £1.37 a minute. Given that the income generated is stated as unknown, what is the Minister’s assessment of the call centre’s usage? It presumably has a cost, but the document states that it is unknown, so will it actually make any money? How much does the Minister expect the average call to generate at £1.37 a minute? We want to encourage business people, tourists and students to come to Britain to help
grow our economy, but what costs will be associated with a 10 or 15-minute phone call at £1.37 a minute? The income generation of web chat, live calls and a“prime-time visa application centre appointment”
are stated as not known, but they are new and must have associated costs. What are the costs versus the potential income? The Minister will have a fair wind, but it is important that he tries to answer the questions.
The Chair: I commiserate with the shadow Minister. It is also 35 years since I left university.
11.47 am
Mr Mark Harper (Forest of Dean) (Con): I had not intended to speak, but the Minister tempted me with his generous comments. I can assure the Committee that I will not detain it for long as I have just a few brief points. I am pleased to see my hon. Friend the Minister in his position and am grateful for what he said about my time in the job. I also thank the right hon. Member for Delyn for his generous words both today and at the Committee yesterday and also publicly when I departed from Government.
I assure the Minister that I fully support the draft regulations. It would be strange if I did not since I had a hand in them. When he was explaining the process, it sounded like a football match—a game of two halves. I retired injured from the pitch after the first half and the Minister was substituted in by the team manager, the Prime Minister. The Minister has ably put the ball in the back of the net with his excellent presentation. As he said, the Immigration Bill, currently going through the other place, and the much better and more sensible process that it will put in place for deciding future fee increases are welcome. Members should support that Bill if any amendments come from the other place to ensure that it gets on to the statute book as soon as possible.
On students, the right hon. Member for Delyn selectively quoted some statistics. The overall number of visa applications for students attending our universities remains on the increase. It is true that we have seen a decrease in some nationalities, but that has been outweighed by strong growth elsewhere, such as from China, so we must look at the overall position.
As my hon. Friend the Minister’s opening remarks demonstrated, he no doubt has done and will receive excellent support from his officials, as I did. I just wanted to put that on the record.
11.49 am
James Brokenshire: I endorse my hon. Friend’s comments on the professionalism and support of officials on a range of policy matters. I am sure that that is reflected in the thoughts of the right hon. Member for Delyn, who would have received the same support from the official and legal teams when he was a Minister.
I am grateful that the Committee appears to agree that the regulations should be approved. I will address the right hon. Gentleman’s questions on certain specific fees, but limiting the fee increases to broadly 4% will ensure that the UK remains open to the brightest and
best, who will help drive economic growth. We believe that our fees continue to represent good value for money. I acknowledge the right hon. Gentleman’s comments on not opposing the regulations and on the benefit of receiving the fee income. It is important to recognise that the visa fee is only a small portion of the overall expenses that some will pay if they decide to come to the UK.We analysed data on price changes and changes in application volumes for all the most popular routes, and we have seen no evidence that fee increases have adversely affected application volumes. In fact, immigration statistics show that demand has been growing in certain areas, with a 14% increase in visit visas issued and a 7% increase in work visas issued from January to December 2013. The economic impact assessment of the regulations shows a positive net present value, which means that the changes will provide significant benefits to the UK economy.
The right hon. Gentleman asked for the specific fee increases for a number of different routes. I have the details but, instead of delaying the Committee, I will write to him with all those percentages. There is no secret. For nationality, the figure is 10.4%, for two-year visas, it is 7.9%, for five-year visas, it is 6.5% and for 10-year visas, it is 0%. It might assist him if I set that out in a letter so that he can see the detail.
The fees have increased by 4% in the specific areas that the right hon. Gentleman sought to highlight. For dependants applying to extend their leave in the UK, we propose to remove the concession on fees so that they pay the same fee as main applicants. That is consistent with our stated policy over the past two years, which is to align better the fees for applications made in the UK with those made overseas, where dependants already pay the full fee. It also reflects that each individual in an application may receive an independent set of entitlements and will require additional administration costs.
The right hon. Gentleman asked about students more generally, and the UK remains a very attractive place to come to for study. I wholly endorse that. I was at a reception yesterday in the Members’ Dining Room organised by the university of Sheffield to highlight a helpful and positive video that it had put together for Chinese students. The video demystifies the visa process by taking them through it step by step. Certain claims have been made that are not borne out by the reality of our visa process. I therefore welcome the fact that the UK university sector remains attractive to the best, skilled and brightest students, and visa applications to our world-class universities are up by 7%. The latest Home Office higher education statistics show that in 2012-13 there were large increases in the number of students from: China, up 6%; Malaysia, up 3%; and Hong Kong, up 15%. I take the issue seriously, and I will continue to work with the university sector and my colleagues in the Department for Business, Innovation and Skills to underline the clear offer for our universities and how they remain attractive places in which to study. Indeed, the UK remains I think the second most attractive place in the world after the United States for international students to come to and study in. I will continue to support that.
The fee arrangements proposed in the draft regulations—increasing by 4% the fee for a tier 4 visa from £298 to £310, and for an in-UK application from
£406 to £422—are in line with our broad policy of spreading the burden of the increases across all routes, but there is no evidence that the increases will affect demand. The price for a tier 4 visa, for example, represents less than 1% of the total cost of coming to the UK to study for three years. I hear the points being made, but I have set out our position clearly. There is no cap on the number of legitimate international students coming to this country, although yes, we have had to take important steps to deal with the abuses of students who were coming to this country with no English and for places at bogus colleges. It is therefore important that we continue to monitor where abuses might still be exploited, keeping our student visa process under review, while at the same time supporting good academic institutions and our university sector. That is precisely what we will do.Mr Hanson: It was not me who was saying those things—I was reading the response of the university sector into the record, on its behalf. There is genuine concern out there in the university sector about the impact generally, not only about the fee aspect, but about the general approach to attracting overseas students. I urge engagement with the sector by the Minister and his colleague, the Universities Minister, the right hon. Member for somewhere near Southampton—[Hon. Members: “Havant.”]—the right hon. Member for Havant (Mr Willetts). That is the place I was looking for.
James Brokenshire: For one moment I thought that the right hon. Member for Delyn was about to relocate the Universities Minister to Hull perhaps, given his previous
comments. I appreciate the right hon. Gentleman’s feedback on his time as a university student 35 years ago—a similar time for you as well, Mr Weir. It is a great opportunity for young people to come to this country, and the contribution of those young people enriches our academic institutions. That is why I have already engaged with the universities sector and discussed the issues with my colleague, the Universities Minister. I will continue to do so, because I want to challenge some of the incorrect perceptions of our system, thereby ensuring that the UK is seen as a good place to come and study for legitimate students. That is a key message that I am pleased to give this morning.The right hon. Gentleman highlighted the contact centre line and the calls and uses. The fees are not intended to generate a profit; they reflect the cost to the Home Office of providing the service. We will obviously continue to monitor how the utilisation is developed. I am happy to write to him with more details about that, if that would be of assistance. He also highlighted the point about the level of income generated. In previous years, we have exceeded the income budget, but have been allowed to keep the excess.
I hope that that assists and I thank the Committee for its consideration. I hope that it will support the new fees.