Draft Immigration and Nationality (Fees) Order 2015
The Committee consisted of the following Members:
† Afriyie, Adam (Windsor) (Con)
† Brokenshire, James (Minister for Security and Immigration)
† Burt, Alistair (North East Bedfordshire) (Con)
† Hanson, Mr David (Delyn) (Lab)
† Hinds, Damian (East Hampshire) (Con)
† Huppert, Dr Julian (Cambridge) (LD)
James, Mrs Siân C. (Swansea East) (Lab)
† Kaufman, Sir Gerald (Manchester, Gorton) (Lab)
† Murphy, Paul (Torfaen) (Lab)
† Opperman, Guy (Hexham) (Con)
† Robertson, Sir Hugh (Faversham and Mid Kent) (Con)
Shannon, Jim (Strangford) (DUP)
Skinner, Mr Dennis (Bolsover) (Lab)
† Stephenson, Andrew (Pendle) (Con)
† Stuart, Ms Gisela (Birmingham, Edgbaston) (Lab)
† Stunell, Sir Andrew (Hazel Grove) (LD)
† Watkinson, Dame Angela (Hornchurch and Upminster) (Con)
† Wilson, Phil (Sedgefield) (Lab)
John-Paul Flaherty, Committee Clerk
† attended the Committee
Twelfth Delegated Legislation Committee
Wednesday 4 March 2015
[Sandra Osborne in the Chair]
Draft Immigration and Nationality (Fees) Order 2015
2.30 pm
The Minister for Security and Immigration (James Brokenshire): I beg to move,
That the Committee has considered the draft Immigration and Nationality (Fees) Order 2015.
I welcome you to the Chair, Mrs Osborne, and Members to the Committee. By way of background, the order sets out the immigration and nationality functions for which fees may be set in subsequent regulations. It also sets out maximum amounts for different categories of fee, thereby limiting the amount that may be charged in subsequent regulations.
This is the first fees order to be made using the charging provisions in sections 68 and 69 of the Immigration Act 2014. In many respects, the new legislative framework for immigration and nationality fees is similar to the previous framework. The Immigration Act consolidates and simplifies the charging provisions from three previous Acts. An affirmative fees order still sets out the menu of services that the Home Office may charge for, and subsequent regulations set out the detail and individual fee levels.
The changes we have made are designed to address two issues with the previous framework. First, the Immigration Act makes it clear that fees may reflect the cost of other immigration and nationality functions. That goes further than the previous legislation and ensures that those who use and benefit most from the immigration system continue to pay more towards the cost of running it. Secondly, the new framework is more flexible and responsive, as it will be easier to amend fees or introduce new charged services without the need for a new affirmative statutory instrument.
In previous years, immigration and nationality fees were set out in two statutory instruments: a negative instrument for cost recovery fees and an affirmative instrument for all other fees. In future, all immigration and nationality fees will be set out in a single set of negative regulations. That approach has many benefits. For example, where a change is made to the immigration rules that requires consequential changes to fees, those may be made within a matter of weeks rather than waiting for the next annual fees update in April. That also applies where new services are introduced to meet customer demand, or where operational or legal requirements necessitate fee changes.
We continue to ensure sufficient checks and balances, to enable appropriate scrutiny of our proposals and to ensure that immigration and nationality fees continue to be set in the UK’s best interests. For example, immigration and nationality fee proposals must be scrutinised and approved by a number of Departments, and an impact
assessment must be produced before they are presented to Parliament. The Government balance their policy that users should pay with consideration of the impact of fees on businesses, education institutions and economic growth.To maintain appropriate scrutiny of fees, the new framework requires a maximum fee to be set in a fees order. That is a new requirement and means that Parliament may consider a mix of charged services and fees at the same time. We believe that that is an improvement on the old framework, which was criticised because there were separate debates on the menu and the fee levels. Individual fee levels will still need to be set out in negative regulations. That is consistent with most other Government fee arrangements.
To provide further reassurance, we have decided not to use all the potential flexibility provided by the new framework on this occasion. Rather than setting out maximum amounts that provide flexibility to set fees for several years, we have chosen to make an order that will last for one year. We have also published a fees table that shows what we expect individual fees to be in 2015-16. On a practical note, we expect that most fees will continue to be set following an annual review cycle. That is consistent with departmental budgeting arrangements.
Turning to the contents of the order, the fees order divides the various chargeable applications and services into clear groupings. We believe that this categorisation is much clearer than it was in the past. For example, in the previous fees order, all leave to remain applications were lumped together. It is now easier to understand that fees will be charged for sponsored workers, students, settlement applications and so forth. The level of detail in the description of each grouping is sufficient to provide clarity and certainty on what the Home Office can charge for and what fees can be included in the fees regulations.
The order also proposes maximum fee levels for groupings of similar applications and services. Since it is intended to last for one year, the maximum amount for each grouping reflects the amount we expect to charge for the highest individual fee in that grouping. I want to make it clear that the maximums are neither targets nor an indication of how much we expect other fees to be in the future. In most cases, a grouping will contain a number of individual fees, charged at different rates below the proposed maximum.
In order to cover a larger proportion of immigration and visa costs through fee income, we propose to increase most immigration and nationality fees. The Government’s approach, consistent with that taken in previous years, is to protect certain routes as far as possible, balancing that protection by making targeted increases for other routes, in particular those where the benefits to applicants are greater, where services are optional and there is evidence that customers are willing to pay more, or UK fees are priced below those of other countries. Percentage increases are then applied to other fees as appropriate.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): In the impact assessment, there is a table on spend per capita on migrants, which gives a total spend figure of £11,300. To give us a sense of how that compares, what is the total spend per capita on public services for non-migrants? I am happy for the Minister to write to me with the answer.
James Brokenshire: Perhaps I can reflect on that, then when I wind up the debate I may be able to come back to the hon. Lady with further information. I understand the focus that she rightly has on this issue. We have discussed individual cases on a number of different occasions and I know she takes a balanced view on these matters.
I can perhaps give a sense of some of the costs. We propose that fees for tourist visas should rise by £2, or around 2.5%, and that some fees should be frozen or even reduced. For example, the 10-year visit visa and shortage-occupation worker fees will be frozen, while exceptional talent fees will be cut. A number of fees will continue to be set at unit cost.
The highest increases are proposed for the routes that provide the most benefits and entitlements and for optional premium services. Indefinite leave to remain and investor visas, which may provide an accelerated route to settlement, will be subject to large increases. Similarly, expedited visa services overseas and mobile biometric services in the UK will increase significantly. Most other fees will rise between 4% and 12%. In general, lower increases are proposed for the routes that support economic growth, with higher increases for the routes that provide greater entitlements or where unit costs are higher.
As I have said, further detail on expected individual fee levels for 2015-16 was published on the Home Office website when this order was laid. We expect to lay regulations shortly, to come into effect on 6 April. Although changes to fees will be possible after that, they would be subject to cross-Government approval, further fees regulations and the parameters set in this fees order.
I believe the order, as an enabling provision, provides us with the means to generate sufficient resources to sustain the high-quality immigration system the public expect to see, reduce the cost of the immigration system to the general taxpayer and ensure that those who use and benefit from the system pay a fair price. I commend it to the Committee.
2.38 pm
Mr David Hanson (Delyn) (Lab): It is a pleasure to serve under your chairmanship, Mrs Osborne.
The Minister has helpfully set out the purpose of the order. In general terms, Her Majesty’s official Opposition have no problem with the principle of charging fees for services delivered by the Home Office. The order sets out the functions in connection with immigration and nationality for which the Secretary of State may charge a fee. As the Minister has rightly said, the fees will be specified in separate regulations at a later date.
Although we do not wish to oppose the order, we need to reflect on the Minister’s comments. He has given a clear indication of the Government’s approach to how the fees will be levied. In a sense, behind that approach is a political view on where the burden of the increased fees should fall.
The impact assessment says, as the Minister himself has said, that there are likely to be increased fees for particular groups, including in-country and overseas points-based system applicants, nationality applicants, short-term visas, long-term visit visas with multiple entries, applications for leave to remain and applications
for indefinite leave to remain. Those are political choices that the Minister has made, to try to help him meet the net migration target that the Government have failed to meet to date—if he is returned as Minister, which I obviously take a different view on. That would have an impact on those seeking to come to the UK not for business or tourism purposes but for family reasons.While I do not object to the order, the Minister needs to be careful about the tone of the policy objectives that he is setting. For example, on page 2 of the impact assessment, there is a phrase that jumped out at me and could have been written by Mr Farage:
“If some migrants decide to leave the UK, there may be some wider benefits in terms of improved social cohesion, reduced congestion and transport costs”.
The tone behind that says that despite the benefits of migration to the UK economy, people coming to this country to help grow our economy will potentially be subject to higher differential fees. We do not know the details of those fees, but they are governed by a policy that indicates “wider benefits” in terms of “improved social cohesion” if some migrants decided to leave the UK. What kind of message does that send from the Government as a whole?
The impact assessment goes further:
“The impact of raising fees stems primarily from the deterrence of potential migrants from entering the UK.”
If that is the policy objective of the Government’s fee regime, it again seems to send out the wrong signal. It is not that we do not want managed controls on migration, but that sends the wrong signal to entrepreneurs, investors, students and others, which is that this is not just about the level of fee needed to recoup costs but about deterring potential migrants from entering the UK. There will be a wider debate on migration generally, and there are things we need to do to lower the level of migration in certain areas. However, a blanket statement that says that the impact of raising fees
“stems primarily from the deterrence of potential migrants from entering the UK”
Migrants who enter the UK might go to Birmingham university or Manchester university. They might open businesses in Sedgefield, Torfaen or Delyn in north Wales. They provide an economic boost to our economy. At the same time, we need to have strong borders, to tackle illegal migration and to deal with these issues. The tone of the order seems to be that the fees regime should be based on the need to reduce migration for other reasons.
I have a comment, rather than an objection. The Home Office’s impact assessment:
“The analysis has therefore not yet delivered estimates of the relationship between price and demand for visas that are robust enough for use in impact assessments.”
While we are not debating the definitive price of visas or entry requirements, on which we have a range of ceilings, there is no analysis from the Home Office. The Home Office admits that it cannot properly analyse the relationship between price and demand for visas or deliver estimates that are “robust enough” for impact assessments. If, in the next few weeks, the Minister introduces definitive fee-level proposals, he will do so without robust analysis of the real-terms impact on particular sectors that we might want to attract to the UK, to help us grow our economy.
Although we will not oppose the order, there is a level of tone and a factual basis that is not present in looking at the needs of the economy. The Minister has our support in principle because I will not vote against a proposal that allows the recouping of fees for services provided. However, we have to do that in a way that does not show that the UK is closed for business and, ultimately, does not set fee levels that are not based on proper analysis because that could mean that individuals who could come to contribute to our economy do not do so.
2.45 pm
Adam Afriyie (Windsor) (Con): Overall, I welcome the measures. It seems right that the cost of the immigration system should be borne largely by those who are using the system and services. This fairly measured way forward—without running it forward several years but only dealing with a year at a time—is probably the best way to go. I echo slightly the sentiment of the shadow Minister: clearly there is a bit more work to be done on the precise numbers in each category and, more importantly, on the elasticity of supply and demand to work out what the return will be. I note the table indicating clearly that some work has been done on elasticity, and I very much welcome that. Clearly, in the years to come, it will be useful to see those calculations and that analysis improved upon.
I welcome the separation of fees into groups. Having spent many years in business before coming to Westminster, it seems to me that without a clear analysis of which types of immigration application there are and the costs of those, it would be almost impossible to attribute costs. The measure is, in a way, the first big step on the route to clarity on that, so I very much welcome the groupings.
I also welcome the maximum fees that are being set. It would be easy, in some sort of political way—particularly in the current climate of the UK Independence party and immigration—to suddenly say, “Right, we’re going to have massive fees for certain categories.” I am pleased that the Minister and the Government—all round, it seems—have taken the attitude that that is not the way to go, and that there should be a more analytical process working out the true cost associated with delivering each of the services and, therefore, the fee income that should be sought in those cases.
I welcome the checks, the individual fee levels—providing greater clarity, which is useful—the one–year limit on how the figures are set, and that the fees table is already indicated for the year 2015-16. Overall, I welcome the work that has been done and the order.
I have just one question, which I appreciate the Minister may not be able to answer here and now; however, it would be useful to know. In business, one tends to ask what the total number of customers or service users in a particular field is, and what the total costs of those services are. Dividing the two would result in a figure that is the cost of the immigration services overall, per user of those services. Clear, overall numbers such as that would be a useful indicator of whether the costs are being covered overall. We welcome the economic benefits that certain types of migration bring, but it would be interesting to see an analysis of the cost, per immigrant, of the services that are currently provided.
I support the order and hope it progresses smoothly today.
2.49 pm
Dr Julian Huppert (Cambridge) (LD): It is a pleasure, Mrs Osborne, to have the chance to speak, briefly. I agree with much of what has been said about the need for a better tenor of debate. It is a great shame that the response we heard earlier from the Leader of the Opposition to the Government’s failure to hit the Tory target for migration was to complain that it had been missed. We should be welcoming people who will come here and contribute to our economy. I note that there are figures estimating what the benefits will be.
The hon. Member for Windsor talked about his experience in business. Normally, people know what they are paying for. The issue is: what can somebody who is applying for one of these expect in exchange for their money? Will the Government be able to deliver the visa, for example, within the target time reliably enough? The Minister has been grilled many times on that issue by the Home Affairs Committee, the only member of which here today is me. He will know that our last report highlighted the worst performance both in-country and out of country.
The figures are a bit out of date, but the last we had before the target times changed were, for example, that a quarter of tier 1 applications by post were being sorted out within the target time. A quarter is far less than I think we would all expect. For tier 4, which is students, the figure was 58%. The numbers are slightly better for premium applications. However, it would be helpful to hear from the Minister what someone can expect their chances to be of getting their visa within the time they are paying for, particularly when people are paying for a guaranteed time.
There will be some exceptional cases; I would expect the Minister to highlight that. I do not expect every single case to be done within time, as unusual factors will arise. However, given that about half of asylum applications do not get an initial response within six months, and that we are only doing about a quarter of tier 1 postal applications within the target time, people have the right to know what they will get for the fees we are setting today.
2.50 pm
James Brokenshire: I thank the Committee for its broad support for the order. There is a widespread acceptance that migration is a factor in our economic growth; we heard that in a number of contributions. However, we also heard concern about the possible impact on public services and communities. The right hon. Member for Delyn almost suggested that such an impact might not apply. If he takes a slightly different view on that, it is interesting. There is rightful public concern about the speed of change and what that might mean for housing, the health service and so many other issues that we all know about from those we talk to. That is why a controlled system matters.
The order is an essential part of the immigration fees framework, which ensures that such fees contribute to the cost of running of the immigration system. The
objective of the new framework is to increase flexibility and responsiveness, which was welcomed in a number of contributions.My hon. Friend the Member for Windsor asked about some of the cost issues in the assessment. The immigration and border system in its entirety costs about £1.7 billion per annum. The fee elements we are proposing will meet some 60% of the overall cost. He asked for a further drill-down on some of the costs attributed, but I am sure he will appreciate that that will vary depending on the applicants. In other words, someone who is a visitor is different from someone applying to come to this country for several years, in terms of the burden on services used. It is not a question of dividing one sum by another; it is more complex than that.
We look at these issues carefully, in terms of the overall balance and the cost of the immigration system. That goes wider than simply processing visa applications. It involves the work of Border Force, of immigration enforcement and a number of other elements. That is the context. There are some 4 million applications for entry, clearance and permission to stay in the UK, and about 110 million passengers arriving into the UK. Not all of those will be from visa routes. Those are the macro numbers we see coming through the border. Some of them will be EU and some non-EU, but we are seeking to address that overall picture.
The hon. Member for Birmingham, Edgbaston asked about some specific numbers and quoted a figure of £11,300. That applies to everyone resident in the UK. The impact assessment goes on to explain that it may not apply to migrants, and it provides a lower figure of between £1,500 and £9,200 to reflect that. That clarification of the analysis in the impact assessment might be helpful to her.
On the impact assessment, there was a note of alarm from the right hon. Member for Delyn. The documents were not drawn up by me as a policy person, but by Home Office economists to provide that expert view and analysis of the order. There are, of course, impacts in the way we set fees. The issue of elasticity came up.
The right hon. Gentleman asked whether that had been thought through and what the evidence was. Our experience and analysis of fees has shown no evidence of elasticity.It is possible that fee changes will affect demand, but the best estimate is a total reduction in demand for Home Office products—visa applications and subsets—of approximately 4,500 in 2015-16. That is 0.1% of applications and is outweighed by the additional income from the fee increase. There is no evidence that the increases have affected or will affect demand in that direct sense. If there were evidence that fees affect demand, the new legislation would allow the Department to reduce fees more quickly than in the past. We do have that flexibility.
My hon. Friend the Member for Windsor alluded to the question of elasticity and the table in the regulatory impact assessment. It gives the best estimate of potential elasticity that Home Office statisticians have been able to make. It is difficult to assess impact, but it is likely to be very narrow. It is important to keep matters under review and observe the impact, so that we can assess increases and the competitive pricing of visas in worldwide terms. People come here to work, to travel and to enjoy the hospitality and other great things our country has to offer, and we reflect that. That is how we have arrived at the differential basis for the charges levied for different categories of visa in the fees order.
I hope that explains the thinking and the evidence base being used. The Government take their responsibilities seriously. We want to attract the skilled and the talented, the brightest and the best, while ensuring that immigration is controlled, given concern about pressures on public services. The social justice issues of wage displacement at the lowest end, affecting those least able, least qualified and low-skilled, show the impact that uncontrolled immigration can have. We have rightly set the fees order as part of the overall package. I welcome the Committee’s support and I commend the order to the Committee.