The Government believe in consulting those affected by the proposed changes. The independent Migration Advisory Committee carried out detailed stakeholder consultation as part of its review of tier 2 migration. In addition, this Government have welcomed discussions with, and received evidence from, a large number of businesses and representative organisations. The process will continue and will, of course, take into account the representations that have been made today by the noble Lord, Lord Wallace, and those received from academic institutions both by myself directly and by other colleagues.

As for consulting on the changes, since the announcement in May, we have been consulting employers and business leaders across the private and public sectors to get their views on the immigration skills charge. This will continue. In addition, the Migration Advisory Committee conducted a review of tier 2 with the remit to advise government on restricting tier 2 to genuine skills shortages and highly specialised experts. As part of this review, the MAC considered evidence from employers on the immigration skills charge.

As to the impact on healthcare, which the noble Lords, Lord Rosser and Lord Wallace, asked about, no decision has yet been made. The details of the charge will be set out in regulations, which will be subject to the affirmative procedure. Therefore, there will be an opportunity for a full debate at that point.

The Government have not said that the immigration skills charge will fund the 3 million apprenticeships; rather, they have said that the immigration skills charge

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will contribute towards skills funding. The level of the charge has not yet been set. The Government are also proposing an apprenticeship levy, not linked to migration, which will go towards apprenticeship funding. The Migration Advisory Committee recommended a figure of £1,000 per year, which is large enough to raise a reasonable amount of revenue and have an impact on employer behaviour.

That is at the core of what this is about. As the Prime Minister said at the outset, it has been far too easy for some businesses to bring in workers from overseas rather than take the long-term decision to train the resident workforce in the UK. We need to do more to change that, and that is the rationale that is driving this. We are proposing that a charge be enabled through this legislation, and we are continuing to consult because we are not unmoved by the noble Lord’s argument that the level at which this is set and those to whom it is applied will have significant implications. Therefore, we need to get that right.

The noble Lord slightly chastised us by saying that we used to have a policy of attracting the brightest and the best. Of course, there is only one thing better than that, and that is to actually grow the brightest and the best here. That is what this policy is designed to do. More details will follow and the House will have an opportunity to scrutinise those when they are presented.

Baroness Hamwee: My Lords, before my noble friend responds on our amendments, I wonder whether the Minister can advise the Committee how noble Lords should deal with this when further government thinking becomes clear. As he well knows, we can scrutinise to our heart’s content but we cannot actually do anything about what is in regulations.

I thought that the Minister said at the beginning of his response that there had not been a decision and that this was permissive of regulations, but at the end he confirmed that this is what is in the Government’s mind, which is obviously common sense. However, by bringing forward such a significant new policy proposal as this, having given the Commons five minutes to debate it, as my noble friend said, I do not know how we can really deal with this just through regulations.

Lord Wallace of Saltaire: That is precisely what I was about to say. At present, the House is extremely nervous about allowing the Government to legislate by regulation for very obvious reasons based on what has recently happened. Having listened to the Minister, the words “pig” and “poke” come very much to mind. We are being asked to accept something on which the Government have not quite made up their mind about how it will work. They have not yet managed to consult, but if we pass this they will produce some regulations when they work out what they want to do. If we are no clearer than that when we get to Report, it will be very difficult to persuade any of the major groups in the House, apart from the Conservatives, to accept something so unclear.

The noble Lord, Lord Green, and I agree strongly on one thing in the migration debate—that better training and education in Britain are absolutely part

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of what we need to have—but that should not replace the circulation of highly skilled and intelligent people which is a vital part of our research network in medicine, STEM subjects and elsewhere. If we are beginning to block that, which this suggests it will do, we will damage our standing in the global academic and intellectual world. That is what universities are most concerned about at present. We absolutely need some assurances on that. Last week, I was talking to a vice-chancellor in Wales who was not aware of the implications of this proposal. As the noble Lord will know, the academic lobby in the Lords is not entirely without a degree of influence. I will do my best to make sure that it is aware of it by the time we get to Report.

There are some large issues here about the private and public sectors, including the question of how we persuade the private sector to invest more in training. This is a Government who need a rather more active and concerned labour market policy. Someone said to me last week that further education funding is about to fall off a cliff. If the Government are looking to further education colleges to help to train apprentices, this proposal is not a good thing to do as part of a whole-government approach.

This proposal suggests that some young man aged 23 in either Policy Exchange or the Institute of Economic Affairs, with a first from some university or other, has written it at speed and the Government have swallowed it. There have been previous occasions in other Governments when those sorts of things have happened. This clearly has not been thought through. If the Government can publish some more detail on what they have in mind by Report, we might be able to make some progress. If they do not know by Report what the details of the policy will be, the House will find it very difficult to accept the proposals in the way the Government have put them before it.

The Deputy Chairman of Committees (Lord Geddes): I assume that the noble Lord would like to withdraw his amendment?

Lord Wallace of Saltaire: Just temporarily. I beg leave to withdraw the amendment.

Amendment 242L withdrawn.

Amendments 242M to 242R not moved.

Clause 55 agreed.

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Lord Wallace of Saltaire: My Lords, special arrangements for foreigners from outside the EU, the EEA and Switzerland who were willing to invest—actually, only to loan by investing in government bonds—a minimum of £1 million were introduced by the Conservative Government in 1994. The introduction of a tiered categorisation for visas in 2008 placed them in tier 1.

The Migration Advisory Committee issued an extremely critical report in 2014. The chairman’s foreword is strongly written. It says that,

“the main beneficiaries are the migrants”,

although,

“the law firms, accountants and consultancies that help organise the affairs of such investors”,

argue that their arrival is “self-evidently beneficial” to the UK—that is, these advisers to the very rich act as a lobby to bring more very rich in—“But”, the chairman continued,

“we do not need such investment to fund the deficit”,

and, if we were hoping that they might become entrepreneurs in the UK,

“we already have an entrepreneur route”.

The foreword goes on that,

“it would be injudicious for the UK to enter into a ‘race to the bottom’, matching special offers recently introduced by, for example, Malta, Portugal, and Antigua”—

and, I might add, St Kitts and Nevis.

7 pm

In 2014, the last year for which I have figures, 1,173 main applicants entered by this route, together with a further 1,827 dependants. That is a total of 3,000—quite enough to attract the critical attention of Migration Watch. By comparison, only 91 succeeded in entering under the exceptional talent category, together with 29 dependants, and 127, with 200 or so dependants, under the graduate entrepreneur category. So our system appears to favour the super-rich over the talented and the enterprising.

It is a remarkably privileged route. Those who put in £5 million or £10 million get accelerated passage to permanent resident status within three years and two years respectively. In order to qualify for permanent resident status, they have to live in the country for only 185 days a year beforehand, so they can leave their mansions in London empty for half the year. They are promised a decision on their visa application within three weeks, unlike the 12 weeks or more of waiting required for ordinary applicants. I understand that it is possible to move from student visa status to tier 1 investor status without being required to leave the UK, again unlike ordinary poorer students. At least, that is what it says in a prospectus from one of the law firms which advises such rich investors, recommending that they might like at that point to transfer a couple of million pounds to each of their children in order to help them make the transition.

Sixty per cent of the successful applicants in this category between 2008 and 2014 came from two countries: Russia and China. A steady flow of wealthy Russians has been overtaken by a rising number of Chinese. Here, I turn to the Transparency International report of October 2015, Gold Rush: Investment Visas and Corrupt Capital Flows into the UK. I should mention

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that Transparency International is a highly respected body, financially supported by, among others, several European Governments. It notes that,

“this visa scheme, as it currently operates”—

that is, after the very modest adjustments made in response to the MAC report the previous year—

“presents a major money laundering risk for the proceeds of corruption entering the UK”.

Checks on the sources of the wealth invested in UK gilts are perfunctory. Until April 2015, applicants were not required to open a UK bank account until after they had been granted a visa, so the Home Office operated what has been described as a blind faith system of believing the declaration given by the applicant. Post-visa checks are delegated to the private banks with which applicants open an account. No investigations have been led by UK law enforcement authorities against money laundering within the UK related to acts of corruption in Russia or China, so the Home Office has preferred not to ask how clean the money coming in has been. The report concludes that,

“there are significant opportunities for the corrupt to launder money through the UK with a significant degree of impunity and poor quality of reporting … to law enforcement”.

The Home Office accepted some of the MAC’s recommendations—mainly that the minimum investment should be raised from its 1994 level of £1 million to £2 million now. Other recommendations, including that there should be a fixed and limited number of such visas—the MAC suggested 100—with sealed bids to ensure that the Government gained the market value and that each applicant should be required to donate £500,000 to a UK good causes fund to demonstrate their contribution to British society, seem to have been ignored. The noble Lord, Lord Bates, promised, in a Written Statement in October 2014, that:

“The Government will also consult further on what sort of investment the route should encourage in order to deliver real economic benefits, and other improvements to the route. A consultation document will be published in due course”.—[Official Report, 16/10/14; col. WS 49.]

I have been unable to locate the promised document and look forward to the noble Lord, Lord Bates, informing us of where we can find it.

It is characteristic of the Government’s friendlier attitude to the super-rich than to the rest of us that it has concluded that the price mechanism—the immigrant skills charge—is right for tier 2, but is not right for tier 1, though competitive bidding for a limited number of places would seem an ideal way to test the market value of such visas. That suggests that the Government are treating the rich differently from the rest of us. I am sure they would not like to give that impression.

There are wider considerations about the impact of this scheme on British society and values. The MAC report notes that,

“the distribution of income matters”,

and that this drives greater inequality and worsens the pressures at the top of London’s housing market. Transparency International suggests that,

“golden visas damage public trust in the institution of citizenship”.

However, I am not sure how much importance the Conservatives attach to the idea of an inclusive community

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of British citizens with equal rights. That is another idea which I hope the Conservatives would not like to get around.

I hope the Minister and the Home Office have taken note of the Canadian Government’s cancellation of their comparable scheme in 2014 in response to growing fears about the rising number of Chinese applicants and their suspected use of the scheme to use Canada as a safe haven for their money rather than as a place to live. Has the Home Office considered whether it should follow the Chinese example, or is it more concerned to compete with Malta and Antigua? There is something essentially grubby about selling the right to residence in Britain to wealthy foreigners, without questions asked. The right-wing media, and much of the Conservative Party, go on at length about the need to defend British sovereignty against any encroachment from Brussels or the Strasbourg European Court of Human Rights, yet here are the Government promoting the sale of visas to dodgy foreigners from dodgy countries. It is demeaning and indefensible.

I note that the Prime Minister is planning to hold an anti-corruption summit in May 2016 and has already invited representatives of a large number of reputable states. I am not sure about Russian and Chinese participation. No doubt the non-governmental community that monitors corruption will wish to challenge the apparent gap between Mr Cameron’s rhetoric and his Government’s practice. The tier 1 investor category looks like a prime candidate for abolition, unless the Home Office can persuade us that it intends to tighten checks and reduce numbers.

I look forward to the Minister’s response. Unless we receive satisfactory responses, and much more information, I will hope to persuade the House to support the abolition of this category on Report as a constructive way of reducing immigration and limiting the risks of importing crime and money laundering from overseas. I beg to move.

Lord Howarth of Newport (Lab): My Lords, I am very grateful to the noble Lord, Lord Wallace, for proposing this new clause. I am a member of the All-Party Parliamentary Group on Anti-Corruption. Like the noble Lord, I have had the opportunity to examine the statistics in the report from Transparency International UK which he mentioned. I find them extremely concerning.

It would appear that, under the tier 1 investment visa scheme, we are operating a charter for money laundering. An individual is required to invest only £2 million in government bonds, or the share or loan capital of a business trading in the United Kingdom, and after five years they can have indefinite right to remain. As the noble Lord mentioned, there is a tariff on this. If they are happy to invest £5 million over three years or £10 million over two years they get a faster track to the right to remain. It is a pretty cheap ticket for them to come in. Large amounts of money have been brought in— £3.15 billion since 2006—by this route. I am advised that golden investor visa approvals have risen from 153 in 2009 to 1,173 in 2014. The largest number are Chinese, followed by the Russians. At the same time, the Chinese and Russian authorities

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are telling the world that they are very alarmed about the export of corruptly gained capital from their countries. The Government inveigh against corruption across the world. They propose themselves as international leaders in campaigning against corruption, yet it would appear that the right of potentially corrupt individuals—and there is good reason to think they are actually corrupt—to come, take up residence and remain in this country can be bought remarkably cheaply.

I have some questions for the Minister. Will he advise the Committee what precautions the Government are taking to ensure that those who benefit from these tier 1 visas are not corrupt? What investigations are undertaken? What requirements are there on people to declare their wealth and the sources of their wealth? What due diligence is pursued to ensure that those answers are honest, accurate and comprehensive? Do the Government maintain a list of those who are suspected by police authorities or intelligence sources internationally to be criminals or money launderers? Do they ensure that people who are on that list do not obtain visas? What proportion of applications for tier 1 visas is turned down? Do the Government intend to undertake any retrospective scrutiny of individuals who have already been granted visas under this scheme?

The noble Lord, Lord Wallace, referred to things that have been said by the chairman of the Migration Advisory Committee, Professor Sir David Metcalf. Those of us who know him know that he is a man of very great experience and wisdom. He told the Home Affairs Select Committee that the tier 1 scheme is,

“absolutely not fit for purpose”.

Indeed, that could be said to be an understatement. It is worse than unfit for purpose if it pollutes our national life. The noble Lord, Lord Wallace, alluded to the effects on the housing market. That alone must be a matter of very great concern. There is a cascade of misery that derives from the ability of wealthy individuals to force up prices of houses and apartments in London, and if they are doing that through the use of ill-gotten money, it is even more intolerable, as I am sure the Committee would agree. If this is a scheme to enable people who may be participants in organised crime or actively investing in it, it runs absolutely counter to what should be the main strategic purpose of the Home Office in any case.

Sir David said that the scheme brings “absolutely no gain” to the United Kingdom. It may be that the Government disagree, in which case the Minister will tell us, but it seems a reasonable proposition. Therefore, I hope that the Minister will tell us that he will accept the new clause that has been tabled, but if he intends to keep tier 1 visas, what is he going to do to ensure that there is not the abuse that Transparency International and many others believe there is in consequence of the availability of this scheme?

Lord Green of Deddington: My Lords, I speak in firm support of this amendment. We have had two very powerful contributions, and I will not repeat what was said. Listening to them and looking at the study, this is bizarre. It is really quite extraordinary. You can see why it is attractive. There is no need for a job offer or a sponsor, and the visa applies not just to the main applicant but to all his immediate family

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members. There are no language requirements and, since 2011, the residence requirement has been only 180 days. Talk about an offer. What do we get? We get nothing because these sums of a few million, which are evidently nothing to these applicants, are given back to them after a few years. They can put them in gilts and get their money back. It is absolutely bizarre. I suppose it is intended to give the impression that Britain is open to investors, and investors are a good thing, but we really should not give the impression that we are really quite as naive and foolish as that.

The noble Lord, Lord Wallace, has already quoted some very effective remarks from Sir David Metcalf, as has the noble Lord, Lord Howarth, so I shall not repeat them, but coming from someone of his stature, they should certainly be taken into consideration.

It is hardly too cynical to describe this as a scheme for selling British passports to the very wealthy. There is absolutely no justification for that and this scheme needs to be scrubbed, frankly. It may be that it could be replaced by a more effective scheme that actually brought serious investment and jobs to this country. That is for another day but this has got hopelessly out of hand. It is a useless system and should be abolished.

7.15 pm

Lord Rosser: Perhaps I will be a little more guarded in what I say on this one. Some very strong and forceful speeches have been made on the basis that it appears that certain individuals who may have a lot of money are being treated rather differently from those who do not. I will leave it in the context that I will wait and see whether the Minister will accept this amendment. I will wait and see what the Government’s justification is for the tier 1 visa and the conditions under which it is given before I come to any conclusions for the Opposition. I have listened with great interest to what has been said. There seem to have been some pretty powerful points made, and I also want to hear what the Minister has to say in reply.

Lord Bates: My speech begins with the line that I have listened carefully to the arguments. I think the arguments have been well made. I will try to set out for the benefit of the Committee the rationale behind this and then answer some of the specific questions. I underline the Government’s commitment to ensuring that the United Kingdom remains an attractive destination for legitimate international investors. The tier 1 investor visa route allows migrants to make a significant financial contribution to the UK, either through the purchase of share or loan capital in UK businesses, or through UK government bonds. The route does not recognise the purchase of property as a qualifying investment.

The proposed amendment would not only result in the immediate loss of millions of pounds of capital inflow, but deliver a powerful global message that foreign investors are no longer welcome in the UK. This is a message the Government have no desire to send. The Government are clear in their commitment to ensuring that the investor route delivers benefits to UK taxpayers and it remains an important component of the UK’s visa offer for high value migrants.

Acting on an independent Migration Advisory Committee review of the tier 1 investor category, the Government introduced a package of reforms in

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November 2014. These included taking additional powers to refuse applications where the funds have been obtained unlawfully, where the applicant is not in control of the funds and where the granting of the application would not be conducive to the public good. The Government also raised the investment threshold from £1 million to £2 million and removed a provision which allowed investments to be funded through a loan. Since April last year the immigration rules have also required that prospective tier 1 applicants must open a UK bank account before their application for a visa is allowed. This ensures they have undergone financial due diligence checks before they are granted an investor visa.

I thank the noble Lord, Lord Wallace of Saltaire, for raising his concerns that visas of this nature have no place in a sovereign nation and rather argue that this may be the preserve of tax havens. It would be correct to observe that some so-called tax havens operate citizenship-by-investment schemes, whereby wealthy individuals may be able to effectively purchase a second nationality in return for a sizeable donation, often paid directly to the host Government. I make it absolutely clear that the UK’s tier 1 investor visa is not such a scheme. The UK’s investor visa offers no guarantee of an extension, beyond the initial two or three-year term, let alone settlement, or citizenship. At each of these points, applicants must not only demonstrate that they have continued to hold the appropriate qualifying investments, but are also subjected to further robust checks.

Let me deal with some of the points that have been raised and provide a bit of additional information. The noble Lord, Lord Howarth, asked about precautions. I think my answer addressed some of the points he raised about due diligence, which is carried out in the process of securing the bank account. Also, the United Kingdom maintains some of the toughest anti-money laundering laws in the world and is respected as such. The general grounds for refusal in immigration rules enable the Government to refuse investor visas where the applicant’s presence in the UK is not conducive to the public good, which means that we carry out checks on their criminal background. Under a pilot scheme, investor visa applicants are required to provide criminal record checks from their country of residence as a condition of applying for the visa.

As a result of all the changes that we have introduced, and which significantly toughen up the approach—this may speak to the point that the noble Lord, Lord Wallace, raised—in the last quarter for which figures are available we granted only 46 such visas compared to 274 in the corresponding period in the previous year. That is a reduction of 83%. Before the noble Lord, Lord Green, gets to his feet, let me say that some of that may have something to do with the general economic situation in some of the key countries from which people would normally apply for these visas. However, it might also reflect that the toughening of the rules is having the desired effect.

Lord Green of Deddington: Exactly so. The collapse in the numbers is very good news. It illustrates just how bad the scheme has been. Is it not the case that if you invest £10 million, you get indefinite leave to remain after two years?

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Lord Bates: That is the case.

Lord Green of Deddington: After that, it is only a matter of time before you get your passport. This is, in effect, selling passports, as the Minister has just acknowledged, and, sometimes, in cases where it may not have been entirely advantageous. But they can also take their money out of the guilds. Are we really persuading people to invest in a serious and useful manner in Britain by a scheme like this? I rather doubt it.

Lord Bates: The noble Lord, Lord Green, makes some very good points. I was looking behind me for some inspiration that would enable me to provide a brilliant argument as to why that is not the case. In fact, there were just nods, as if to say, “Yes, that is about right”. This is something that we need to keep under very careful review, and we do. When we get advice from the Migration Advisory Committee that there are problems with the scheme, we have, in the past, shown that we will take action.

On some of the points that were raised about property, there is no suggestion from anyone that people would not be able to own property in any part of the world. The housing issues that were raised are not linked to the scheme. Under the coalition Government, we significantly raised the stamp duty to about 12% on larger homes at that level. In a similar vein, the Chancellor announced in the Autumn Statement that there would be a further levy of an additional 3% for people coming in and purchasing a home in the UK as a second home. That was on top of the increase to 12%. Significant things are happening, but it is about how we maintain an offering on the international stage which ensures that we can attract people with exceptional talent, people who want to come and invest here, and people who want to study, visit or work here so that they can contribute to the public good of this country. We need to keep that under review. That is something that the Government continue to do. I am sure that we will want to take note of the comments made in the course of the debate ahead of Report. I am sure we will revisit it then, but until that point I hope that the noble Lord will feel able to withdraw his amendment, temporarily.

Lord Rosser: I am not quite clear on what the Minister said in the last part of his comments. Is he saying that he intends to reflect on what has been said and write to us prior to Report? What does he envisage will happen between now and Report?

Lord Bates: Forgive me for trying to be reasonable. I was simply saying that this was an interesting argument that I listened to and followed. A number of points were raised from all parts of the Committee, expressing concerns about how this system operates. I want to go back and talk with colleagues about the system and how it operates, and then come back with answers to the points raised or suggestions as to how things could be improved.

Lord Howarth of Newport: If this does come back, will the Minister share with the House how the Government intend to make their position credible and defensible before this international conference, at

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which the Prime Minister will claim that Britain is leading in the security of its provisions to prevent money laundering?

Lord Bates: Her Majesty’s Government’s position is always credible and defensible. Most people would recognise that this is a sensitive area, but the UK has taken a very strong stand in the international community on tackling money laundering. It does that consistently through raising matters at the G20, which is a prime vehicle for operating on this, and through the OECD, which has its regulations as well. We will continue to do that. I would have thought that everybody would welcome the fact that the Prime Minister is taking this leadership and wanting to see how further things could be done. It is absolutely the role of this House to apply pressure to the Executive to make sure that they are living up to the arguments and principles that they seek that others observe.

Baroness Hamwee: Can I add a tiny bit of extra pressure on the Executive between now and Report and ask whether the Government have information about the effect on housing numbers and housing prices as a result of this policy? That might be quite difficult as a lot of it will be anecdotal, but it is a jolly big anecdote along the south bank of the Thames, of units that are sold off plan and will probably remain empty. There is a great deal of concern about the impact of the role played by those taking advantage of this route on the housing shortage and on housing prices.

Lord Bates: Housing is outside the scope. I know that the effect on the housing market will be an interesting point of research, but we are focusing on the visa that is primarily targeted into government gilts, or loan stock or equity in UK-registered corporations. Those are the bounds of it. I mentioned that we have taken action before. This will probably excite even more attention, but due to EU law on free movement of capital, the Government believe that there would be legal difficulties in treating residents and non-residents differently by, for example, restricting purchases or charging a higher rate of tax.

I have said what I have said. I am quite genuine. A point has been made. I should just temper the Committee’s expectations because I spent the first two pages of my speech defending the scheme, saying that it was important to send out the message and that these investors were coming. I do not accept the generic term of “dodgy” with “investor”. A lot of investment into this country has been of immense value in providing jobs and wealth to the people who are here. However, I will go away and reflect on the points that have been raised about the specific working of the scheme and come back on Report where those arguments can be tested.

7.30 pm

Lord Wallace of Saltaire: My Lords, I have some sympathy with the noble Lord in having to reply to this debate. I am fascinated by the caution expressed by the Labour Front Bench and I hope that the

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Labour Party will not find itself in a position of wanting to defend the super-rich against the criticism from the Liberal Democrats—of course, I speak for the Liberal Democrat Front Bench on this. Perhaps the Labour Party will reflect a little further on that between now and Report. I hope that I will not miss Report. I have to admit to everyone here that I am going on holiday for the first two weeks of March. I am going to Antigua, but I shall not ask whether I can buy citizenship while I am there.

Lord Bates: I will put a special plea to the business managers that we schedule Report then.

Lord Wallace of Saltaire: My Lords, I hope that the Minister will be able to write to all noble Lords on the Committee between now and then with a number of answers. Have the Government examined the Canadian experience and looked at why the Canadians abolished their category? Have we considered the same? Can the Government explain why they accepted all of the Migration Advisory Committee’s proposals on tier 2 for the immigration skills charge, but did not accept two rather important proposals from the Migration Advisory Committee that there should be a limited number of sealed bids and a substantial donation to a good causes fund as part of the conditions?

I admit that the origins of my interest in this are from when I went as a representative of Her Majesty’s Government to the capital of a former Soviet state and found myself talking with someone who was clearly very much part of the oligarchy running the country. He told me that he had just been appointed ambassador to Britain and this was rather difficult for him because at that moment he held British citizenship as well as citizenship of his state. He was going to have to come back to his own country for some weeks while this was sorted out, but he had recently bought his son the house next door to his in Chelsea and as his son was rather young he did not want to leave him on his own for so long, so he was not quite sure how he was going to manage it. I began to think it was a little odd. I decided in my two days in that country that it was not a particularly democratic one and the distribution of wealth was clearly in the hands of a very small number of people, although one or two of them offered me some extremely generous gifts, which I, of course, had to pass on. It opened my eyes to something not desirable, not in the interests of this country and not contributing to our economy.

I would have been much happier if the figures I had discovered on tier 1 had shown that the exceptional talent category had 2,000 to 3,000 people in it, the entrepreneur category 3,000 to 4,000 people and the investor category, 50. That is the sort of thing we should have if we believe the Prime Minister in his commitment to attract the brightest and the best. We have got it the wrong way round at present. I wish the coalition Government had been able to push a little further in that respect, but we will make up for it. We will do our best to push the Minister and see how far we can go. For the moment, I beg leave to withdraw the amendment.

Amendment 242S withdrawn.

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Clause 56: Power to make passport fees regulations

Baroness Hamwee: My Lords, I hope this will be quick. This is a probing amendment. Clause 56 is about fees, not really about immigration, although some of it might be. The issue I would like to probe is about passports, not immigration. Clause 56 (4) provides that there may be fees which exceed the cost of “exercising the function” in question. I would be grateful if the Minister would explain to the Committee what is proposed and what lies behind this. Is it about a premium service, rather along the lines of the premium visa service? From time to time, over the years, I have heard complaints about that among the business community—probably not voiced directly to the Government. They are having to pay premium fees for what should be the basic standard service. Is there anything that the Minister can say about customer satisfaction on this? It is worth spending a minute or two getting on record the Government’s explanation of payment over and above the cost of providing proof of citizenship. I beg to move.

Lord Bates: My Lords, the passport fee provisions in the Bill require that all Home Office passport-related costs are fully reflected in the fee structure. That means we can recover the costs associated with processing UK passengers at the border through the passport fee. This is reflected in our spending review settlement. They also allow for a surplus on optional, premium and fast-track services, which we intend to use to help protect the quality of, and fee for, the standard passport service and, over time, reduce the standard fee. We do not intend to generate surpluses to fund other unrelated Home Office activity. Premium or fast-track service delivery is currently, and will continue to be, based on insight into and awareness of customer expectations and needs. In future, we intend to set fees for premium services at a level which ensures that they are economically viable to the customer and ensure that Her Majesty’s Passport Office can recover the cost of the services delivered, while protecting and maintaining the standard passport service.

The services and fees will be set out in regulations. As set out in the existing Clause 56(1), fees are set to meet the cost of such functions associated with the issuing of a passport or other travel documents. They will require approval from Her Majesty’s Treasury and Parliament. Therefore, the regulations do not provide for fees to be set at a level deliberately aimed to achieve an excess or surplus on the overall service. The regulations would provide for the fee for specific premium elements of the service to be charged above cost, but any income derived from that would be required to be used to maintain or reduce the cost of other services provided within the overall passport function.

Although I recognise that this is a probing amendment, the proposal would not work, first, because the use of fast-track services is a matter of individual customer

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choice and therefore subject to fluctuating demand. Unplanned surpluses, or even deficits, may therefore materialise in-year. Secondly, and more importantly, the level of fees for individual services should be determined by the overall cost of delivering the whole passport function, not the other way around. Our ambition is for the standard passport fee to remain at the current level initially and to fall over time as the cost of passport functions is reduced. This will be achieved through transforming delivery through digital and online services, complemented by the customer’s ability to choose the access services with an appropriate level of fees to reflect the higher level and speed of service provided. I hope that, with that explanation, the noble Baroness will feel able to withdraw the amendment.

Baroness Hamwee: My Lords, having listened to that explanation, it seems that the amendment pretty accurately reflects what the Minister has been saying, but I will not spend time on that now. Since we are talking about passports, does the Minister have in his brief the target time for the issue of a passport on application at the moment—which I presume is the standard service—against which a premium service will be designed?

Lord Bates: It is five days for domestic and 14 days for overseas. There are, of course, some elements of variance, but those are the standard times.

Baroness Hamwee: That is helpful, because to issue a passport in less than five days strikes me as going some, though perhaps it may not be so difficult if it is a renewal. I shall be interested to see what the premium service purports to offer. I might be about to hear.

Lord Bates: The premium service is four hours: well worth the money.

Baroness Hamwee: I might hand it over to the noble Lord, Lord Green, to interrogate. What checks are undertaken for that? I beg leave to withdraw.

Amendment 242T withdrawn.

Clause 56 agreed.

Clauses 57 to 59 agreed.

Schedule 12: Civil registration fees

Lord Wallace of Saltaire: My Lords, at this stage I shall be extremely brief although I am very happy to talk further, out of Committee. The purpose of the amendment is to probe. A Government who are deeply and publicly committed to the promotion of marriage appears to be imposing charges on it. Before I run off to the Daily Mail to tell it that the Conservatives are making marriage more difficult, perhaps we could

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explore the implication of some of these additional charges and discuss what the Government really intend with them. We are in favour of settled relationships, both civil partnerships and marriage. The Government have said many times before that they want to promote them. That is the purpose of this probing amendment. I beg to move.

Lord Bates: Currently, both the local registration service and the Registrar General provide a range of services in connection with the registration of births, marriages, civil partnerships and deaths for which, in some instances, there is currently no power to charge a fee. The existing fee-raising powers are restrictive and out-dated and do not cover the full range of services provided. For example, the Registrar General is involved with the verification of around 5,000 divorce documents each year which have been obtained overseas and also provides blank certificate stock to over 30,000 buildings for use in certificate issue. These are just two examples of services provided by the Registrar General for which there is currently no provision to charge a fee to the end-user and where the expense must be recovered from central funds.

Schedule 12 will modernise the process of setting fees for registration services and enable fees to be set for those services which have previously been provided without charge. The provisions also move existing fee-charging powers into regulations, providing more flexibility and making it easier to amend them in the future. This will allow the local registration service and the Registrar General to recover more of the costs of providing registration services. It will reduce the reliance on central funding and ensure that, where possible, any costs are borne by the users of the services on a cost-recovery basis in line with Treasury guidelines.

I hope that helps the noble Lord and he will feel able to withdraw his amendment.

Lord Wallace of Saltaire: That is extremely helpful. I am happy to withdraw the amendment.

Amendment 242U withdrawn.

Amendment 242V not moved.

Schedule 12 agreed.

Clauses 60 and 61 agreed.

Clause 62: Regulations

Amendments 243 and 244 agreed.

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Amendment 245 not moved.

Clause 62, as amended, agreed.

Clause 63: Commencement

Amendment 245A not moved.

Clause 63 agreed.

Clause 64: Extent

Amendment 245B agreed.

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Clause 64, as amended, agreed.

Clause 65 agreed.

In the Title

Amendment 246 agreed.

Title, as amended, agreed.

Bill reported with amendments.

Committee adjourned at 7.46 pm.