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Immigration and Nationality (Fees) (Amendment No. 3) Regulations 2008

Volume 704: debated on Wednesday 29 October 2008

rose to move, That the Grand Committee do report to the House that it has considered the Immigration and Nationality (Fees) (Amendment No. 3) Regulations 2008.

The noble Lord said: In moving this Motion, I will repeat things said recently in the other place and in this House. The Government are determined to continue to drive through the real improvements in the immigration system that we have said that we will deliver. In April 2008, we created a new force, the UK Border Agency, which brings together UKvisas, the Border and Immigration Agency and Customs at the border. We are seeing the results. I realise that I am in danger of repeating what was said to most noble Lords here just a few moments ago but, since April, we have seen the prevention of some 10,000 individuals crossing the channel; we have searched more than 500,000 freight vehicles; and we have confiscated and detected more than 1,000 forged documents. In addition, anyone applying for a visa now has their fingerprints checked against UK databases. So far, we have enrolled some 3 million sets of fingerprints.

We have started rolling out the tough new Australian points-based system. Analysis has shown that, if the points-based system had been in place last year, around 10 per cent fewer skilled and temporary migrants from outside Europe would have been allowed into the United Kingdom. Since we introduced new penalties for employers to combat illegal working in February 2008, fines worth about £8 million have been issued. We have also unveiled foreign national ID cards, which will go live later this month.

The problem with all this is the cost to the Exchequer and the taxpayer. This year, we will spend over £2 billion on securing our borders and managing the immigration system, of which £670 million will have come from fees paid by those using the system. It is right and fair to the users of the immigration system and to the general public in the UK that those who benefit most from the immigration system should contribute proportionately more to the true end costs.

For the £600 multi-tier sponsor licence fee, the sponsor is a medium or large sponsor and already holds a tier 4 or 5 sponsor licence. In respect of the first fee, the facility to apply in person is highly valued by customers as an alternative to a postal application. Tier 1, post study, will be the first applicants under the points-based system able to make a premium application under the phased implementation of the points-based system. Implementing this route will generate income estimated at £2.6 million until March 2009.

In respect of the reduced entry clearance fees, we propose that a 10 per cent fee reduction be offered to workers who are nationals of states that have ratified the Council of Europe Social Charter—namely, Turkey, Croatia and the Former Yugoslav Republic of Macedonia—applying for entry clearance. Setting these fees at reasonable levels will minimise lost income and limit the impact of a fee exemption at posts overseas. It is within UK treaty obligations to reduce or abolish fees for workers under the Council of Europe Social Charter.

We have also removed the fee exemption for workers under the 1996 Council of Europe revised Social Charter. Workers from Albania, Andorra, Armenia, Azerbaijan, Georgia, Moldova and Ukraine will now pay the standard entry clearance fee. We do not feel that it is appropriate to maintain a fee exemption in respect of nationals of states that are party to a treaty that the UK has not ratified and to which it is therefore not bound. Making these changes generates income estimated at £340,000 until March 2009.

The sponsor licence fee is for medium or large sponsors who have previously applied to bring in students or temporary workers for a fee of £400 and who subsequently apply to bring in skilled workers. We want to charge £600 for the second application, which would mean that they pay a total of £1,000, taking them up to the cost of a stand-alone tier 2 licence fee. That is an unusual category of application, for which we expect volumes to be negligible.

The fees proposed here are all fair and proportionate. They would recover the costs of considering the application and contribute to the true end costs of the system. These changes are a vital step as we deliver a fairer and more effective immigration system. I commend this instrument to the Committee. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Immigration and Nationality (Fees) (Amendment No. 3) Regulations 2008. 27th Report from the Joint Committee on Statutory Instruments.—(Lord Brett.)

I thank the Minister for explaining these regulations, which are becoming a regular annual feature of our lives.

The noble Lord says that they are almost monthly. We understand the reasoning behind what I call the Robin Hood system of charging more for those who can afford the cost and less for those who cannot. However, I am a little surprised at the rapid change as regards exemptions for workers who are nationals of states covered either by the Council of Europe Social Charter or the Council of Europe revised Social Charter. These exemptions were introduced barely a year ago. I should be grateful if the Minister would explain why they are suddenly being changed. Has the number of applications in that time been so great that a charge is seen as a deterrent? The Minister said that exemptions should not apply as regards a treaty that we have not ratified. However, that situation applied last year, so why introduce a change this year? It is quite bouleversé.

Will any more categories be introduced before the total number of fee categories is completed? These regulations come through fairly regularly and there are all sorts of tiers and parts of tiers. It would be helpful to be told when they will be fully completed. The Explanatory Notes suggest that consolidation of the current regulations and fee charges will take place as part of the annual review in 2009 and 2010. However, the current fee charges may not be the end of the story. It would be helpful to be told whether we are nearly at the end of this process or whether we are still in the middle of it, as well as whether the consolidation will lay out the full fee regime or whether we will still be messing around with one or two categories every few months. The noble Lord, Lord Avebury, said in an aside that this was likely to occur monthly rather than annually, so we shall take it as likely to occur monthly.

I have nothing more to offer on these regulations. They are clearly part and parcel of the new way of limiting immigration into this country and rationalising the charges that we make, but we need answers to the three questions that I asked.

The Minister began his remarks by repeating some of the comments that he made in answering the Oral Question asked this afternoon by my noble friend Lord Greaves. I repeat what I said then: I hope that the Government will not claim that the credit for the fall in immigration, particularly of those coming here to seek work, belongs to the points-based system when we are already seeing a huge fall in the number of employment vacancies and a rise in unemployment, which we can be absolutely certain will get progressively worse over the next 12 months. Regardless of whether there was a points-based system, there would not be as many people coming here to work, or, indeed, in any other category of immigration. I fervently hope that the Government will not try to claim that the credit for limiting immigration belongs to the points-based system when that has nothing to do with it; falling immigration is a product of the world economic downturn.

I am fascinated by this. I do not know whether the noble Lord or the Minister saw the report and the comments of the chairman of the Equality and Human Rights Commission, which were reported today, that more than 1 million immigrants will be leaving just because, as the noble Lord said, this country is in a deep recession.

Yes. The noble Baroness reinforces my point. Most of the people who came here, such as the huge number who entered from Poland after accession, have gone back, leading to a net reduction in immigration from the east-EU accession countries, which people were so terrified of when those immigrants first came in. The regulations and the points-based system have nothing to do with those numbers, which we talked about at Question Time.

The regulations come under the regime set by Section 51 of the 2006 Act, which gives the Secretary of State power to specify fees for services provided in connection with immigration and nationality, and by Section 42, as amended, of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004, which allows the fees to be set at levels higher than the cost of providing the service, as well as to cross-subsidise other services without any clear upper limit.

I intervened in the noble Baroness’s speech to say that this event was not annual but almost monthly. To summarise, your Lordships discussed the original fees order on 8 March 2007 and the original regulations three weeks later. Since then, we had amendments to the order on 13 December 2007 and two sets of amendments to the regulations on 25 February 2008 and 17 June 2008. Although it may have been a bit of an exaggeration to say that this happens monthly, this is the sixth time that we have looked at the procedures under the current legislation. This makes it ever more difficult for practitioners and the users of the system to find their way through all the paperwork.

The Immigration Law Handbook consolidates legislation up to the point at which it is published, but the current version, from early 2007, has none of these instruments. What Parliament and users need, if we are to understand this avalanche of secondary legislation and comment on it usefully, is a draft consolidation of the original order. I think that this was the noble Baroness’s point. We need consolidation as we go along, including all the amending instruments up to the one under consideration. If the Home Office wanted to be helpful, it could publish the fee regulations, as they would be amended by this instrument, as an appendix to the Explanatory Memorandum each time a new instrument is tabled. There will be many more instruments; we have dealt with only a fraction of the six tiers that are involved in the points-based system.

The Library helpfully provided me with the Butterworth consolidation of all the regulations up to the regulation preceding this one. I laboriously inserted into it the amendments provided by this set of regulations, although that should be done by the Home Office. I have handed to the Minister’s officials work that I did over the weekend to consolidate this amendment into the previous ones. If the Minister looks through it, he will find that it is easy to follow because anything that has been removed from the previous regulations has been struck out in red. You can easily look through it and see exactly what these regulations have done. You cannot tell that simply by looking at this set of regulations unless you have the previous five instruments to refer to.

The fee for a particular service may reflect the benefit that the Secretary of State thinks will accrue to a successful applicant. However, if that calculation is made, the Secretary of State is not obliged to tell us on what assumptions it was based or to explain how the arithmetic was done. In the case of a tier 1 post-study migrant, we are told that, in the target consultation on the fees and charges to support the points-based system that was undertaken a year ago, one employer respondent agreed that tier 1 and tier 2 applicants should pay slightly higher fees, which presumably means slightly higher than the cost, because they could earn more.

Unfortunately, this consultation is not available on the UK Border Agency website or in the Printed Paper Office. I was under the impression that, if any document was referred to in a Motion before the House, it should be made available to Members; if that does not extend to the Explanatory Memorandum where this consultation is referred to, it jolly well ought to. I suggest that where any consultation is mentioned the document should be put on the relevant website and made available in hard copy for noble Lords to refer to either in the House or in Grand Committee.

The UKBA internal summary of the consultation, which the agency kindly sent to me when I asked for it, asked for comments on the proposal to set fees for applications under each of the tier 1 categories at levels that would continue to recover more than the normal administrative costs of considering the application. The respondents to the consultation largely agreed, subject to the costs being “reasonable”. UKBA says that it took on board the suggestion by some respondents that the post-study work migrants should pay less because they start as low earners. This has already been taken into account in setting their fee at £400 compared with £750 for normal tier 1 applicants. What would the amount have to be to recover the pure costs so that users can see whether the actual amounts being charged are slightly higher, which respondents said would be acceptable, or much higher? Why is it not possible in these consultations to give respondents a rough indication of the costs for bare recovery, the additional amount needed to recover the expenditure associated with appeals against refused applications, and the elements of cross-subsidisation?

The object of the exercise is to make the successful applicants in tiers 1 and 2 not only pay for the cost of processing their own applications but also cover the additional overheads incurred by unsuccessful applicants, including the cost of the appeal system and the cross-subsidisation of other elements of the points-based system. As I have said before, this makes it more expensive for a non-EU national to come to the UK under the points-based system than any other country in the world, including Australia, about which we had an argument with the Minister’s predecessor over the actual figures. I have proved to my own satisfaction that our costs are higher than those of the Australians.

In the previous regulations there was an exemption from tier 1 general and tier 2 entry clearance applications for citizens of both CESC and CERSC states, as referred to by the noble Baroness, Lady Hanham. However, as I understand it, that was a mistake. Citizens of the CESC states will now pay 10 per cent less than the tier 1 standard entry clearance fee of £600 with a similar concession on tier 2. We have not ratified the revised Social Charter and perhaps the Minister will confirm that we have no foreseeable intention of doing so. We are therefore not obliged and never were obliged to make any concession to non-EU signatories to the CERSC. On the other hand, the exemption from charge in respect of all tier 1 and tier 2 leave to remain applications made either by CESC or CERSC nationals is maintained because these exemptions were in place before. It is confusing to have what looks like a permanent distinction in the entry clearance and leave to remain treatment from CESC and CERSC nationals respectively. When the points-based system was first announced, it was billed as a simplification of the immigration system, but with every development it becomes more and more complex. Would the Minister explain the distinction between the CESC and the CERSC states? I share the concern of the noble Baroness, Lady Hanham, that we have not had a proper explanation of that treatment.

As regards the application for sponsor licences, the Explanatory Memorandum states that there was agreement among respondents that large businesses should pay higher fees so that small businesses and charities could be cross-subsidised. Again, no figures were given and the unpublished consultation shows that there was a,

“general request from all the sectors to provide actual figures”.

The universities, in particular, said that the Home Office lacks understanding of the enrolment process, which involves setting out fees in their prospectuses well in advance. The fee for a sponsorship licence for tier 4 migrants—students—is £1,000, which I suppose is not a significant cost when spread across the number of foreign students attending most universities with a unified system of admission, but is it fair in the case of universities such as Oxford, where admission is determined by the colleges? The universities make the point that they are charities but, although there was a promise by the Government that charities would pay a reduced sponsorship licence fee, that has not been honoured. Universities pay the same as any other large sponsor.

I do not see the amount of the fee for individual certificates of sponsorship, which are required from institutions of higher education. In its written evidence to the Home Affairs Select Committee inquiry, Managing Migration: The Points-Based System, Universities UK said that it would like a more considered and staged implementation and a more flexible approach to the certificate process for tier 4. In 2006-07, there were more than 239,000 non-EU international students at UK higher education institutions and almost 20 per cent of the staff were non-UK, to say nothing of the large number of visiting academics who come here on short visits. Those international students and staff make a vital contribution to the sector academically, culturally and financially, and there needs to be far more advance notice of the introduction of the PBS as it affects them.

The chairman of ILPA, giving evidence to the Home Affairs Select Committee on 8 July, said that when tier 1 went live on 29 January, and again when the next phase of tier 1 implementation happened on 30 June, the guidance notes for the sponsors were published on the same day, making it impossible for employers to check their practices for compliance in advance. If the same thing happens on 25 November, HEIs will be in serious difficulties. We want an assurance from the Government that they will discuss the timing with the HEIs and agree with them on a suitable interval between the publication of the guidance and the rollout of further tiers, especially tier 4, going live.

The universities also protest that they are being given no chance to test the sponsorship management system, which is the IT system into which they are required to input details of their tier 2 and tier 5 employees on 25 November, yet that system is required to operate from that day onwards not only here in the UK but at every visa post in the world. I have, with the noble Lord’s assistance, a paper that I received from Universities UK, setting out those and further points of concern about the regulations—I will not go into further detail on that, because he will have that in writing.

Finally, unemployment was already increasing at the fastest rate since the early 1990s before the world financial crash; redundancies were increasing and job vacancies were falling. UKBA figures in August showed that the number of eastern European EU migrants applying to the worker registration scheme in the second quarter of 2008 had fallen to the lowest level since accession. Presumably, as redundancies soar and vacancies plummet, the number of foreign workers in tiers 1 and 2 needed by the economy has already shrunk. It would be useful to know what the Government estimate the numbers in those categories will be over the next 12 months.

I want to deal with the practical application of rules in posts overseas and make a few suggestions to my noble friend, of which I have given him notice. What I have to say is part of a transparency agenda. In my view, transparency serves the public interest, whether for the consumer or public administration.

I understand that the regulations deal primarily with fees payable in the United Kingdom and that other statutory instruments deal with fees payable outside the United Kingdom. However, the regulations cover arrangements for some countries abroad, in particular those countries that ratified the 1961 European Social Charter. I am using the SI as a peg to deal with the practical administration of the fees regime as it exists overseas. With that in mind, I suggest an amendment to the wider regime of fees payments. I understand that the UK Border Agency publishes an annual report, the problem with which is that statistical data are general and do not cover the operations of individual UK Border Agency posts overseas where visas are granted. Parliament is entitled to have far more detailed information on the work of individual offices overseas, and therefore I make the following suggestions which are based on my experience of how the system works.

An amended regime should be created to include the submission by UK Border Agency outposts overseas of an annual return to be included in the agency’s annual report. The return should show the number of visa applications where fees are payable in each outpost overseas; the categories under which each application is made; the number of applications approved; the number of applications refused; the number of applications where fees have been refunded; the number of applications refused where the decision has been overturned at an immigration appeal tribunal and the number of persons employed at each outpost overseas, separating British nationals stationed overseas from locally engaged staff, with the actual length of each appointment. I would guess that this information is available at stations overseas; or it should be. I think also that the National Audit Office would have done some work in this area already as part of its economy, efficiency and effectiveness remit.

May I interrupt? I am struggling to equate what the noble Lord is saying with the regulations. I do not know whether there is any advice as to how far we can stray outside the terms of the regulations before we go quite beyond the pale, but this seems to be pretty far.

In so far as the order deals with fees, this is pretty well on the margins of the regulations but essentially within them. Why do I believe that the information should be made available? I have tabled a number of Questions for Written Answer on a particular case, that of an application made by a person who applied for entry into the United Kingdom in Tbilisi in Georgia. There have been a large number of questions going back nine months, some of which have taken a long time to answer. In one case I think it took five months to get a holding answer which arrived at the end of July, just before the Recess. In that case, realising that something was wrong, I went to the tribunal with prepared documentation because I knew that the decision which had been taken overseas was wrong. Indeed, the tribunal chairman ruled that the decision should be overturned and the person was given access to the United Kingdom. That case threw up deficiencies in the way the system operates abroad.

This is basically about the practical application of the regimes that we establish in the United Kingdom. When I rang the ambassador, he told me that he could not intervene in these kinds of decisions. It begs the question: at what stage and to whom are officers overseas accountable for the decisions they take? I cannot see where the accountability lies. My suggestions for amending the regime are about securing a greater level of accountability, because Parliament is entitled to know what is happening in each office. They would not greatly increase the workload of stations overseas in so far as they already submit some of that information centrally to the United Kingdom. That information should be made public in an annual report.

We have previously discussed unsolicited mail and unsolicited questions. I am sure that all questions are truly solicited, but they go far beyond my brief or my knowledge. I will attempt to answer the many detailed questions put by the noble Lord, Lord Avebury, and I will send written responses to my noble friend.

A phased implementation plan for tier 4 will be published tomorrow. It has been developed with Universities UK and the sector. It has already been agreed that universities with registered charitable status will be charged £400. We will respond in writing on the broader university framework.

As I have said, I can confirm that CESC states will receive the 10 per cent reduction. We have not ratified the revised Social Charter, and if that is not immediately on the horizon, it should be. The noble Lord, Lord Avebury, also asked about costs. I will let him have that information in due course. The fees are set within a fairly strict financial limit set by the Treasury. Within that overall limit, we set fees bearing in mind the value of the successful applicant or migrant while maintaining that the UK is an attractive destination for work and study, or to visit. As he rightly said, there is a considerable advantage to the United Kingdom’s Exchequer from the £2.6 billion of fees paid by overseas students per year; it is not something we take lightly.

The overall cost for tier 1 and tier 2 is £100 million. As to any costs over that, as the noble Lord said, the subsidy rates are intended to allow the subsidy of small sponsors at the expense of larger sponsors. Whether they are monthly, annual or bi-annual, we appear to have new regulations at frequent intervals. That is in part because of the introduction of the new phased five-tier system. When the introduction of fees takes place for the tax year starting in April 2009, it is intended to consolidate the charges for this year. There have been inevitable changes to the regulations this year due to the phased roll-out of the points-based system. Criticism about the ability of employers and others to see and understand the information is taken. In its response, the department will seek to provide assurances that it will deal with this point expeditiously.

On the two points made by my noble friend Lord Campbell-Savours, I am not qualified to judge the tangent one must reach before escaping the regulations. Although perhaps it is not a question I should answer, as I have been given notice, it seems sensible to seek a detailed response for my noble friend in due course.

I was so brief in comparison to the noble Lord, Lord Avebury, that one of my questions has been overlooked. Why have the exemptions under the Council of Europe Social Charter and the Council of Europe revised Social Charter been dismissed after such a short time? They were introduced only a year ago. I asked whether it was because there had been so many applications or for another reason.

I confess that that was due to my lack of legible writing. I also omitted another charge to which I shall respond first because it is easier; namely, whether the Government would seek to take any credit for the fact that the new system comes in at a time when there is a falling roll of people seeking to join. It is beyond belief that the Government would ever take credit for anything for which they are not fully responsible, but I am assured that if they ever seek to do so, the noble Lord and his colleagues on other Benches will be the first to remind the Government that the credit is not necessarily due to them.

When the PBS fees regulations were drafted in April, a decision was taken to include a fee exemption for entry clearance applicants for workers who were nationals of countries that had ratified the 1961 Council of Europe Social Charter. The fee exemption was included to ensure compliance with our obligations under international law and a consistent approach towards in-country and out-of-country applicants, as similar exemptions already apply to leave-to-remain applicants. However, the 1961 Social Charter requires us to abolish or reduce fees for workers. We are therefore offering a 10 per cent reduction in fees for workers in compliance with our international obligations, while ensuring that those who benefit from the immigration system contribute to the cost. We also wish to discourage spurious applications. Applications from workers from countries that have ratified the 1996 revised Social Charter will pay the standard fee, because, as I said, the UK has not ratified that charter and is not bound by it.

Ministers are never encouraged to give in to the temptation to admit to mistakes, and I will not give in to it on this occasion.

Faced with the question, “Have you stopped beating your wife?”, I was always told that the advice was to take the fifth amendment. I do so on this occasion.

On Question, Motion agreed to.