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Having recovered from my pain at being accused of choosing only soft targets, I will add that selective rollout will enable us to increase this gradually and, at the same time, increase the availability of places where applicants may enrol their biometric features, expanding the system across the country. We will again return to Parliament to seek further approval when we decide to roll this out to other categories of foreign nationals required to apply for identity cards. We are determined that only those foreign nationals here legally will benefit from the privilege of working and living in Britain. As such, I commend the regulations to the House.
Lady Saltoun of Abernethy: My Lords, the noble Lord did not answer the other question asked by the noble Baroness, Lady Hanham, which was whether further information was likely to be added to identity cards later.
Lord Brett: My Lords, I thank the noble Lady for reminding me of my inability to answer that question. Off the top of my head, the answer is that I believe that there are no plans so to do. I will look for any confirmation or otherwise, but, if this becomes an annual event, as has been suggested, there will be opportunities for that to be engaged in exploration and debate the next time the issue is being discussed. We are committed to bringing it back if we determine to add other categories, but I know of no determination to add information that is not already being collected.
Immigration and Nationality (Fees) Regulations 2009
7th Report Joint Committee Statutory Instruments
Motion to Approve
4.38 pm
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Lord Brett: My Lords, the Government are delivering the biggest shake-up of the immigration system in 45 years. The improvements and the new services do not come for free and our policy is that the burden for paying for them should not fall entirely on the UK taxpayer. For 2009-10, we will spend about £2.2 billion on securing our borders and managing the immigration system. There is widespread agreement with the Government’s policy that those who benefit from the services should contribute towards the cost of the system. In total, about 30 per cent of the costs of securing our borders and managing the system are recovered through charging for applications and services. The remaining costs are met by the UK taxpayer.
These regulations are 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, the Secretary of State can set a fee for an application at a level that exceeds the administrative cost of determining the application. We set these fees above cost to subsidise some of the lower fees and to contribute an extra £100 million for enforcement. We also specify fees in separate regulations under the powers in Section 51 of the Immigration, Asylum and Nationality Act 2006. These regulations set the fees for applications, processes and services that are provided at or below the administrative cost of determining the application.
We take into account a broad range of factors to set fee levels. We welcome the contribution that legal migrants make to the economy and cultural life in the UK and we have ensured that the proposed fees will maintain the UK’s position as an attractive destination for work, study, visiting and cultural exchanges. We have considered the fees in other countries and have set our fees at levels that will not damage the UK’s international competitiveness. We have also ensured that the charging system is fair to those using the system in terms of the price paid for consideration of their application. We think that it is right that those who benefit most from the immigration system should pay proportionately more towards its costs.
For each fee, we have analysed the estimated impact of price increases on demand and have built the revised volume demands into our fees modelling. We maintain a balance between our need to recover costs and keeping our fees at fair and sustainable levels. Our fees are set within strict financial limits agreed with the Treasury. The fees also balance wider policy aims set by the Government. For example, we set student visa fees below cost in accordance with the Prime Minister’s initiative to increase student migrants coming to the UK and in response to stakeholder consultation and feedback. We have also held sponsorship fees paid by business and maintained the lower fees for small businesses and charities in recognition of the difficulties facing UK businesses at this time. Given the economic circumstances and the action that we are taking to be more selective, we expect the number of migrants coming to the UK from outside the EEA to fall during the next financial year. This year’s fees take account of that, to ensure that UKBA can continue to offer a world-class level of service.
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Finally, in accordance with the Government’s declared policy to create a fund to help local service providers to deal with transitional pressures of migration, we have agreed with the Treasury to recover the money for this fund through these fees. Our overall aim is to ensure that income from these fees makes an appropriate contribution to the end-to-end costs of the immigration system, thereby reducing the burden on the UK taxpayer. Our method of fee setting balances a number of complex factors. It will continue to help to protect some routes from significant increases and will contribute to the additional revenue needed to fund enforcement and other necessary improvements to the immigration system. I commend this instrument to the House.
4.45 pm
Baroness Hanham: My Lords, I thank the Minister for introducing these regulations, which have already been considered by a committee in the other place. The basis on which fees are set has been very honestly described as one where one applicant is overcharged in one category to subsidise someone in another category—a sort of Robin Hood system. The fees now being charged are relatively substantial, even though I note what the Minister said about taking account of the current situation. I am perfectly willing to accept the argument that to be in this country, at whatever cost, is good value for money. However, the desirability of that may be tested to destruction if the current economic disasters continue and this country becomes less of a magnet for the type of applicants for entry that we are considering today.
It would be useful to know which of these fees are inflated to provide the subsidy and which ones are the recipients of the largesse. The Minister suggested that the student fees, even after above-average increases, which I believe has happened this year, are among those that are set below cost. Is that a correct interpretation of the situation? The Minister in the other place suggested that there was an additional element to all the fees to contribute towards the cost of administration. Presumably that is the cost to the UK Border Agency, but the £100 million that the Minister said was for enforcement—perhaps he can say whether that includes administration—seems a sizeable additional pot to raise. Is this based on a business case of a specific number of applicants? Is the total amount subsumed annually by the UK Border Agency on this aspect alone or, if it is in profit from this, can it vire to other cost bases?
As the Minister knows, there has been considerable concern about the size of the increased fees for students coming to the UK to study. What consultation was carried out with Universities UK and the representative bodies regarding the impact that the increases might have on numbers applying to come? What response was made to that consultation and was the consultation formal or informal? I appreciate that the university fees for overseas students are considerable in themselves and the Minister may well say that the visa charge is only a small additional sum, but somewhere the camel’s back will be broken if both fees and visa charges continue to rise above expectations.
What is the situation regarding the licensing of colleges and universities for sponsorship? Have they all now been included so that there is no difficulty for
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In addition to the administration and other costs for the UK Border Agency, as the Minister has said, a contribution from the fees is made to the Migration Impacts Fund. How much is currently in that fund and who is it paid to? Presumably, some local authorities will benefit if they have costs over and above their local communities. Apart from them, what other bodies or persons are the beneficiaries?
As with the biometric cards, these fee increases are obviously going to become an annual event, so this will not be the last time that this House is able to discuss them. However, I hope that, with the answers to some of my questions, we may be a little better advised.
Baroness Miller of Chilthorne Domer: My Lords, we have heard several times about the benefits migration can bring to the UK economy. I do not think that the Government would dispute that. There is a principle here that we are now charging much higher fees to those who enter legally. They are increasingly helping to pay for the cost of securing our borders, but they are securing them against those who would be entering illegally, possibly with malign purposes. So those entering legally are paying an increased price for our wish to secure our borders and they have to pay up front in one go rather than the cost being spread and paid for by the general tax base. If these fees are going to increase year on year to pay for border security, this will begin to pose quite a problem.
The issue of student fees has been quite widely explored. The universities were nervous about falling behind in terms of competitiveness. The Minister is likely to say a little more about that. The best value bit of the entire proposition seemed to be the long-term visit visas for people wishing to visit a multiple number of times, which seems a fairer move in terms of fee basis.
I was surprised by the checklist for all the specific impact tests in the Explanatory Memorandum. Somebody obviously must have done all the tests, and the answer was no in every case, all the way down the list, in both “Results in Evidence Base?” and “Results annexed?”. If that is the impact on the cost-benefit analysis—apparently there is no impact on anything at all, including rural-proofing, which is interesting; I cannot imagine that there was real rural-proofing—was the checklist filled in in a fairly casual way down the back of the Explanatory Memorandum? The impact tests are supposed to be the first place you check what you need to look at in more depth, so they are quite serious.
Lord Brett: My Lords, I thank the noble Baronesses for the points that they made. I might help to answer some for both of them, but certainly for the noble
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The question of administrative costs was raised. The administrative cost base for 2009-10 will be £566 million, which in itself is a £2 million reduction on this year. The agreement with the Treasury is to raise £100 million above the cost base to contribute to the full end-to-end cost of the immigration system. I do not apologise for the fact that people coming here are asked to pay a little more because the benefits of citizenship—of being here, of education here—are things that they value, or they would not be here. I take seriously the point at which you test to destruction, but I hope to demonstrate that we are not doing that.
In addition to the £100 million that we seek to raise to the cost base, we also have an agreement to raise £35 million through fees to deliver the fund to manage the transitional impact. I will come back to who the beneficiary of that will be in a while. In 2009-10, the estimate is to raise some £700 million through the fees for applications and services, which will of course be a 30 per cent contribution to the total cost, so the bulk of the cost is still borne by the UK taxpayer. Clearly, as has been said, some are beneficiaries of underpricing the real price, and some are paying the contribution beyond the real price. Let us look at student fees and tier 4, for example. The increase in student fees is from £99 to £145. The fee for the tier 4 visa remains significantly below the cost of processing the application, which is over £250. That is how we will continue to attract foreign students. Yes, the total costs of a foreign student coming to the UK, including their fees and upkeep, will be considerable, but the increase from £99 to £145—little over half the actual cost of producing the visa—will not be a great disincentive.
As has been noticed, we are extending the period of leave that can be granted, so that it is up to the end of the course. The one fee of £145 will cover the whole of the student’s period in the UK, even when the degree course goes longer than the period. In addition, we offer students who wish to undertake short-term courses of not more than six months an ability to enter the UK as student visitors. The fee for that, £65, will go up to £67, which effectively takes into account the increases of last year. The figures for April to December were issued today and the total number of students who benefited last year from lower application fees was 43,038. I hope that that gives a flavour.
The fee is a small part of the costs incurred by students. We have looked at the price of a tier 4 visa, which represents, we believe, about only 1 per cent of the total cost of coming to the UK. The costs of student visas compare favourably with our key competitor countries. In Australia, the student fee is £219 and, in the United States, it is £300. Price demand research suggests that £200 is the point at which the tier 4 visa might influence a decision on whether to come to the United Kingdom. Interestingly, the Home Office and independent analysis on the impact of historic visa fees increases has failed to find any direct link between visa pricing changes and migration behaviour.
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In answer to the question about licences and colleges, most colleges have already registered. The fee for small sponsors is £300 for a four-year licence. Long-term visas provide benefit because the cost of a long-term visit visa—five to 10 years, which is a unique product in the global market—still offers very good value for money. The five-year visa at £400 is less than the cost of six separate short-term visit visas. A 10-year visit visa at £500 is less than the cost of eight short-term visit visas. These products offer a substantial additional benefit, and people do not have to resubmit applications and biometric data.
Sceptical is possibly too strong a word, but the noble Baroness, Lady Miller, was not entirely convinced about the impact assessment, which relates to the costs of business. The fees here are paid by migrants and not by businesses. In that sense, we do not believe that there is anything in the impact assessment that is not considered to be robust. I do not feel that I have done justice to all the questions, but I undertake to read Hansard and to write to the noble Baronesses on any points that I have not covered.
In terms of some of the detailed information, I could perhaps set it out in a more comprehensive form than perhaps even the questions asked. Pulling it together in data form can be reassuring to those who are concerned about these increases having an adverse impact on our migrant student population on entry or on those who come here to work.
I thank noble Lords for the debate. I believe that the proposals in these regulations are in line with our objective to recover the costs of the Immigration Service from users of the system, rather than rely wholly on the UK taxpayer. As such, that policy is widely supported in the community. I commend this instrument to the House.
Baroness Hanham: My Lords, I asked about the migrant fund and who that goes to. Does the Minister have information on that?
Lord Brett: My Lords, certainly, it includes local authorities which can make the case, the police and other bodies which have increased costs and primary healthcare trusts. All those organisations are eligible for benefits under the fund. We do not want to overlay prescription in terms of what the fund might be used for. It is essential that local services have the opportunity to shape the use of the fund in their local area. However, police services and hospitals could use the fund to reduce the cost burden of interpreting, the recovery of police community support officers from migrant communities or providing a pool of interpreters across services. The fund could be used to provide extra support for teachers and children’s services in areas where migration has led to a high turnover of pupils in schools.
In addition, the fund could help with projects to improve community safety, ensuring, for example, that migrants are aware of the rules. Without being comprehensive, there are several areas and eligible bodies that will find themselves under strain as a result of migration flows. They can make very good use of what is a modest amount of money. It is a sensible
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Baroness Hanham: My Lords, how much is it and how is it allocated?
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Lord Brett: My Lords, the total is £35 million. I am not sure how much we are raising as the tills click away today, but I will inquire and give the noble Baroness the up to date figures.
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