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Immigration and Nationality (Fees) (Amendment) Order 2023

Volume 832: debated on Monday 24 July 2023

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Immigration and Nationality (Fees) (Amendment) Order 2023.

Relevant document: 44th Report from the Secondary Legislation Scrutiny Committee. Special attention drawn to the instrument.

My Lords, this fees order sets out the immigration and nationality functions for which a fee is to be charged, and the maximum amount that can be charged in relation to each of those functions. In the order we are debating, we are proposing a number of changes that will facilitate major government policy, play an important role in the simplification of the Home Office’s fee structure, and allow vital decisions to be made to ensure that the migration and borders system is properly funded.

Before I set out in detail the changes proposed in the order, I reiterate that the Government’s aim is to reduce the burden of operating the migration and borders system on the UK taxpayer. The fees set within the parameters of this order are a vital part of the Home Office’s funding settlement. Without the flexibility afforded by the order to adjust fees for all immigration and nationality routes through separate legislation, it is not possible for the Home Office to take a balanced approach to setting fees.

It is therefore vital that the maximum amounts set out in the order allow appropriate choices to be made on individual routes to support a balanced overall approach, avoiding the potential for increases to fall disproportionately on routes where there is flexibility to adjust fee levels. Noble Lords will be aware of proposals to increase fees across a number of immigration and nationality routes. Those fees can be set only through separate legislation, which will be laid later this year, and not the instrument we are debating today. That separate legislation will be accompanied by the production of a full economic impact assessment.

Turning to the changes we are proposing to the fee maximas, the majority of these have not changed since the previous order was laid in 2016. The changes we propose, which are accompanied by an economic impact assessment, will provide the necessary flexibility to make changes to fee levels where they are required to ensure that the sustainability of the migration and borders system is maintained and that we are able to set fees at a level that recovers the cost of processing an application.

As the Committee will know, the United Kingdom is launching an electronic travel authorisation scheme that will strengthen the security of our border and support our wider ambition for digitising the UK border. This is a familiar concept to the majority of international travellers, with many of our international partners having had similar schemes in place for a number of years. My Written Ministerial Statement on 6 June this year outlined the intention to set a fee of £10 for each application on the initial rollout of the scheme. The order before us provides a power to charge a fee for the scheme and sets the maximum fee that can be set by the Home Office for each application. Although we have announced our intended fee level of £10, that fee cannot be set through this order. We will set the fee formally through the immigration and nationality fees regulations, which, as I said, will be subject to approval by Parliament later this year.

We are continuing to simplify our fee structure by removing fees that have become increasingly redundant as part of the wider transition to digital evidence of immigration status or that are no longer required to support wider policy objectives. We will remove the chargeable function for biometric enrolment for all remaining instances of the £19.20 fee in the regulations, reducing the number of fees that customers are required to pay in relation to an application in respect of biometric enrolment. We are removing the £161 fee charged in country for a transfer of conditions for those with limited leave to remain because this fee is now largely obsolete, with all new customers applying in country now issued with a biometric residence permit or digital status.

We are also removing the fee to amend details on physical documents—such as name, sex marker, nationality and photograph—for those with limited leave to remain. This will bring these customers in line with those issued digital status and those with indefinite leave to remain, who are not charged a fee to make this sort of amendment. Finally, the order provides that we will no longer charge a fee for a like-for-like replacement of a biometric residence permit where that document has expired. This will primarily benefit those with indefinite leave to remain, whose cards have a maximum 10-year validity, with most due to expire in 2024.

The final changes that we are proposing in the order will ensure that it and subsequent fees regulations are aligned with the wider policy changes being made in the migration and borders landscape. Under new arrangements being rolled out as part of broader reforms to the innovator route, contact point meetings—a term defined in the order—will be required between an endorsing body and the individual applicant to assess progress against their business plan. The fee maximum for these meetings is set at £500. The fee for each assessment will be £500 and will be set in the Immigration and Nationality (Fees) Regulations in the next year, ahead of these meetings being chargeable in April 2024.

The current sponsorship system is being reformed, with the existing system of certificates of sponsorship being phased out and replaced with the “sponsor a worker” service. This will happen in stages with a limited beta test in 2024, during which both the certificates of sponsorship and the “sponsor a worker” scheme will operate side by side. The amendment that we are making in this order will facilitate this charge, providing a fee maximum to be set at the same level as the certificate of sponsorship, which is £300.

In closing, the changes that we are proposing through this order are vital to providing enough flexibility to amend fee levels, with the approval of Parliament, to ensure that the system is sustainable. I beg to move.

May I ask my noble friend the Minister about something to do with the policy background? In discussing the changes for which the order provides, both in function and fee levels under the regulations, my noble friend referred to one of the policy objectives: the overall security of our borders. In discussing security here and elsewhere, the Government have referred to pre-entry checks that will facilitate entry at our borders. My related question is: is there any proposal or plan to have ongoing checks, including checks when a successful applicant leaves the country, given that the proposed electronic travel authorisations will last for up to two years for short visits? If so, what does the Home Office intend to do to operate these?

My Lords, I want to raise two main issues with the Minister. He will undoubtedly not be surprised to hear that the first is a process issue; the second will deal with the operation and impact of this SI.

As the Minister knows, he is the Minister responsible for all SIs in the Home Office. I am sure that he will have seen and noted the criticisms and comments expressed in the 44th report of the Secondary Legislation Scrutiny Committee of this House, which draws this SI to the special attention of this House, and its findings on the Home Office’s approach to SIs more generally.

I also note the Minister’s remarks to the Secondary Legislation Scrutiny Committee in giving evidence on 11 May. There is much information in that evidence, so I will restrict myself to looking at Explanatory Memorandums and the Minister’s role in all Home Office SIs. The committee’s report states:

“The Home Office’s Explanatory Memorandum (EM) omitted key information about the wider context of the policy changes, something that has been a theme of our comments on recent EMs from the department”.

As this is where the examination of these matters is concerned, would the Minister like to respond to this point?

Secondly on the Minister’s role, I note the judicial analogy he gave in evidence to the committee. The question was being asked by the noble and learned Lord, Lord Thomas of Cwmgiedd, who is of course a former Supreme Court judge. He asked the Minister,

“do you look at the Explanatory Memorandum before it is sent out, or are you a bit like some Silks who never read the skeleton argument that they will subsequently have to defend?”

The Minister replied:

“I cannot confess that I read every SI that the Home Office lays before Parliament and every Explanatory Memorandum. If there was a really controversial or difficult SI, the expectation is that it would be raised with me as the SI Minister and I would review it”.

The noble and learned Lord, Lord Thomas of Cwmgiedd, then went on to ask:

“Do you then, in that process, go through it, read it and say, ‘Look, this hasn’t got the right disclosure. You ought to be making this point and that point’, a bit like you would as a Silk dealing with your junior?”

To this the Minister replied—and I am sure he remembers this:

“I shall certainly take that away and adopt that as best practice”.

Could the Minister tell us how that best practice is going, having adopted it? There are clearly criticisms in this report and the Committee would like to hear how the Home Office Minister is responding on behalf of the whole Home Office.

I turn to the content of the SI, on which I have three issues to raise. The first is the impact on tourism from the ETA, the second is the impact on universities—I shall cite Cranfield University in particular—and the third is the operations of the common travel area. This SI touches on all three and there are certainly matters that could do with further explanation.

First, on tourism, the Secondary Legislation Scrutiny Committee report, in paragraphs 7 to 10, outlines the range of potential negative economic impacts. Given that the figure the Minister referred to is based on the cost of ETAs and processing them, rather than the impact on the tourism industry, and given the flexing from the difficulty in understanding how many people this will deter from entering the United Kingdom, why has visitor expenditure not been quantified in the documentation that accompanies this SI? I am sure that there are data that outline visitor spend per head in country. Any tourist who comes into this country will be spending money here on hotels, food, visitor attractions and so on. Does the Minister agree that it is possible to quantify the level of expenditure per head? If the reduction is 1% or whatever figure is inherent in the documentation, you could quantify that as a loss to the tourism industry.

If the Minister does agree with that, the question arises: how can you offset that? Of course, you can offset it by further expenditure on tourism promotion outside the United Kingdom to get people to come here. The money raised could also be used in some way to help the tourism industry, to compensate for any reduction in numbers that might occur.

Secondly, the 22% increase in student visa fees will provide another trigger to reduce the overseas student population. Once again, it makes us less attractive, and I wonder what the Government’s current position is on the number of overseas students studying in the United Kingdom’s universities. If that is a positive thing, we need to be doing positive things to state that. There are universities, such as Cranfield, as I explained, which work with a particular focus on postgraduate students, and they need some reassurance about the messages coming out from the Government—particularly this fee regime—that are not providing the most welcoming approach that our universities both seek and desire financially in a global marketplace for those who will become students in this country and will have some affiliation with this country in their future careers.

The third issue relates to the CTA. I am genuinely seeking explanations and advice from the Minister. I was trying to think of an easy way of putting this. Let me describe a character whom I have invented, called Jo O’Malley—which means they could be a man or a woman. I am not talking about the Jo O’Malley who comes from County Cork, I am talking about the Jo O’Malley who comes from Boston, Massachusetts, who takes the easy route into Ireland because of an Irish background and name, through the special facilities for Americans at Dublin Airport. He or she may not know what the regime is for the ETAs in Northern Ireland. They come in with an appropriate one for the European Union, to enter Ireland, and then they wander across and look at things in Northern Ireland. Perhaps they decide, “Let’s get on a ferry and go across and see what northern England has to offer”. As the Minister explained, there will be no checks or inspections of documents either at the border between Northern Ireland and the Republic or between Northern Ireland and the rest of the United Kingdom—Great Britain. If there is no one checking, how do we know whether people have an ETA or not? We just do not have that information unless there will be some checks— because Jo O’Malley would walk through, not having to show any documentation, into Northern Ireland and then off the ferry into England as well. That is a possibility and it is laid out—the Minister said that there would be no checks in either case.

How will it work? I do not understand how that understanding of who will do the checks and what will be checked will work.

I have a point of clarification. What I do not understand, behind the noble Lord’s probing, is that if it is a requirement under law to have an ETA for all visitors coming, for instance, from the Republic of Ireland, if they travel on a ferry, as the noble Lord suggests, over to somewhere else, or indeed if they come to this country—it will not be required for the Republic but it will for Northern Ireland—is it not the law that they must have it? For instance, it is very important for insurance purposes if they are taking a car on the ferry. They must be covered under law and they must have an authorised travel document, as I understand it. So why would this be an issue, given the way that our law works? If you are obliged to do something, it is expected that you will do it.

I thank the noble Baroness; she has asked the question to which I particularly wanted to know the answer: how do you enforce it? There is no way of knowing whether anyone has any documentation at all. Whether people avoid it deliberately or because they do not know and they are just moving around, at some stage we have to know—and we do not know. It is easy if you are coming in from Europe, because if you are doing so in any other capacity there is definitely a documentation check, but there is no documentation check coming into the United Kingdom and Great Britain. That is the bit I am trying to find out and that is why I have asked the question. I know this is very tricky and that discussion is going on about it, but I just do not understand how enforcement of any sort will—or could—take place.

My Lords, following the passage of the Nationality and Borders Act 2022 and related changes to the Immigration Rules in March this year, this order is the next stage of a lengthy process to implement the Government’s planned ETA system. Ministers have set themselves a target to begin issuing ETAs to people from Qatar and other Gulf states this autumn and for the scheme to be fully operational by the end of next year.

With respect to the new ETA system, the scope of the order is limited to fees to be charged and requirements for applicants to submit biometric information. A number of the most important issues, about how the scheme will work and what impact it will have, are left for another day. The new ETA system is a major undertaking, and its effects will be wide-ranging.

Significant numbers of UK-bound travellers who do not need a visa will be required to obtain formal clearance to enter the UK for the first time. Whether or not the system will function as it should will depend to a substantial degree on the effectiveness of new technologies that are still in development. In this case, the ETA system will require applications to be made and, eventually, biometric information to be submitted, online or via a new app which is yet to see the light of day. The Government say that even the decision-making process may be automated. That will take highly sophisticated technologies, and robust testing will be essential before the new system comes online. Will the Minister therefore provide an update on what progress has been made in the development of those technologies to date, and tell us whether he believes that the Home Office is currently on track to meet the deadlines it has set for the rollout of those changes?

There is a series of questions about the potential impacts of the order, especially on the tourism sector and the wider economy, including how travel across the border with Ireland might be affected. I have yet to be convinced that Ministers are taking adequate steps to address the concerns raised by stakeholders and to mitigate the unintended consequences. With regard to tourism, the impact assessment published alongside the order recognised that it is reasonable to expect a fall in tourist numbers once the ETA has been implemented, and that revenues can be expected to decrease as a result.

Concerns about the implications for cross-border travel between Northern Ireland and the Republic are especially acute in this sector. However, the impact assessment fails to capture the different effects that the ETA may have across the UK’s different nations and regions. That is a significant oversight. Members of the Northern Ireland tourist board have expressed extreme concern about this issue. They feel that their marketing strategy is very much based on an all-Ireland approach and that the ETA might risk this. Will the Minister therefore set out what steps the Home Office plans to take to mitigate any adverse effects on the tourist trade that these changes may have across the UK, including but not limited to the effects on Northern Ireland?

Given that we are dealing with an order that addresses fees, can the Minister tell us what consideration the Government have given to the potential merits of ring-fencing some of the income generated from applicants’ fees as a means of providing financial support to any business that may find itself struggling with the transition?

Alongside the measures pertaining to ETAs, this order makes changes to the maximum fee level applicable to a range of UK visa routes. For the most part, the proposed increases are relatively modest. The notable exception is for student visas. At present, applicants cannot be charged more than £490, but the order would increase the maximum fee to £600, which equates to a more than 20% increase on the current level, with significant potential implications for international student numbers. As the Secondary Legislation Scrutiny Committee has noted, the scale of the increase is particularly striking when measured against the actual cost to the Home Office of processing those visas, which is less than half of what applicants have to pay. The Government’s impact assessment for the student visa fee increase acknowledges that this potential change is likely to have significant knock-on effects on the number of visas granted to international students and, as a result, on revenue from tuition fees, on which so many of our leading universities remain reliant.

Can the Government go some way to quantifying this? The noble Lord, Lord German, talked about quantifying these impacts and was disappointed by this lack of quantification, but, of course, this funding can be monitored as the system continues to roll out as there will be a number of stages in future. I seek reassurance from the Minister that the impact of the system as it is rolled out will be monitored in a quantitative way as far as possible.

My Lords, I am very grateful for this constructive short debate. Turning to the various points that have been raised, first, I confirm to my noble friend Lady Lawlor that the Home Office will continually monitor the suitability of a person to hold an ETA and will cancel an ETA once granted if that becomes appropriate. An ETA can be cancelled on a range of grounds, including criminality, exclusion or deportation and on non-conducive grounds. Clearly the whole point of having an ETA of limited duration—two years—is that when a further application is made, further checks are run on the applicant. The electronic travel authorisation scheme is designed in such a way that the security of our borders is paramount.

On the process point made by the noble Lord, Lord German, as the SI Minister for the Home Office, I am very familiar with the work of the Secondary Legislation Scrutiny Committee and the content of its report. I reassure him that, as I said in my Written Ministerial Statement on 6 June, our intention is to charge a fee of £10, and this order allows for £15 as a potential maximum. As this order establishes only the chargeable function and the maximum chargeable fee, not the actual intended fee, the Explanatory Memorandum for this SI focused on the chargeable function and maximum rather than the intended fee, which will, as I said in my earlier remarks, be set out later this year in the immigration and nationality fees regulations.

The Secondary Legislation Scrutiny Committee raised concerns with the Home Office that the Explanatory Memorandum did not, as the noble Lord said, provide enough information about the bigger picture of the ETA policy and should have included the intended level of fees and the rationale for them. I have explained the logic behind the way we have set out the Explanatory Memorandum for this instrument, but of course I will bear in mind what the Secondary Legislation Scrutiny Committee said when I prepare and review the Explanatory Memorandum for the fees regulations that will be introduced later this year, and of course I will reflect more generally on the point in relation to fees legislation in future. I thank the noble Lord for raising the point.

I turn to the three substantive points on the content: first, the impact on tourism. As I understand it, the average spend per visit for non-visa nationals in 2022-23 is estimated by the Home Office at £722 per head. It is on that basis that we have proceeded. Clearly, the noble Lord’s question in relation to the impact on tourism was really in the context of the suggestion that somebody would be put off from visiting the United Kingdom because of the need to pay for an ETA. In the context of a world where virtually all the likely competitor destinations are also charging for a similar electronic travel authorisation, I suggest to the noble Lord that the fee of £10 is very reasonable.

The ETIAS—the electronic travel authorisation proposed by the European Union—is to be set at €7, when that comes in. However, for example, the one used by the United States, the ESTA, is set at $21—£16.36 at today’s rates. The Australian version is 20 Australian dollars, or £10.51, and the New Zealand version is 23 New Zealand dollars if completed online and 17 New Zealand dollars if completed on a mobile app. The Canadian version is 7 Canadian dollars and, as I say, the EU’s version is €7. So I suggest to the noble Lord that the £10 level is an appropriate one, and will not have any adverse impact on tourism in the context of the global position.

Perhaps I could probe a little deeper there, because we get most of our tourists, in bulk numbers, from within the European Union. That is the number we are looking at, and where people can choose which other country they want to go to. They have a choice of 25 countries, including the Republic of Ireland. The difficulty here is that it is suggested that there will be a 1% drop in the number of tourists to this country, and it is that bit I am trying to find out. If they are predominantly from the European Union, then it is not the cost issue there, because for people who are in the European Union, there is no cost to moving from one country to another. So I would just like to probe a little bit more on that.

As I say, it is the Home Office’s view that the cost will have a negligible impact on the choice of destination. Interestingly, just picking up on a point that the noble Lord raised, the Republic of Ireland is not proposed to be part of the ETIAS, and has chosen to opt out, as it is not in the Schengen area. So the Republic of Ireland is something of an outlier now in this field, which of course ties back to the point that I will come to in relation to the noble Lord’s third point on the common travel area.

I turn to the noble Lord’s second point: the impact on universities. Fees for immigration and nationality applications are kept under review, as the noble Lord knows. Increases to student visas were announced as part of a wider announcement on fees on 13 July by the Chief Secretary to the Treasury. Those changes will be made in the same regulations that I have already discussed that will come later this year. Those fees will be within the maximum that we are setting in today’s order. While the student fee maximum was increased by a small amount in 2022, the Home Office has determined that further flexibility is necessary to ensure that we are able to take a balanced consideration of fee levels across all routes. The amendment we are proposing to this order will allow this to happen over the longer term.

The Government are of the view that it is right that those who benefit most from the immigration system should contribute towards the cost of operating it. We also note that there is limited evidence that past fee increases have affected demand on study routes.

I turn to the noble Lord’s final point, in respect of the common travel area. As now, there will be no routine immigration controls on journeys within the common travel area and no immigration controls whatever on the Ireland/Northern Ireland land border, as the noble Lord would expect. However, as is currently the case, individuals arriving in the United Kingdom, including those crossing the land border, will need to continue to enter in line with our immigration framework, which obviously will include the requirement to obtain an ETA when they are introduced. I should add that an ETA will not be necessary for an Irish national, of course, because they have special status.

The general principle that one enters the common travel area while adhering to the immigration framework is a long-standing and well-established one. Those crossing from Northern Ireland into Ireland have long been expected to comply with immigration requirements. Once granted, an ETA will be valid for multiple journeys over an extended period, as I discussed in relation to the point made by my noble friend Lady Lawlor. Third-country nationals who are already legally resident in Ireland will be exempt from the requirement to obtain an ETA when travelling to the UK on a journey within the common travel area. In order to benefit from this exemption, if required to do so by a UK immigration official, non-residents of Ireland will need to present physical evidence demonstrating that they are legally resident in Ireland. I hope that this answers the point raised by the noble Lord, Lord German. Guidance as to the forms of identification that will be required has been provided as of Thursday last week; I can provide a copy to the noble Lord after this debate.

I turn to the points made by the noble Lord, Lord Ponsonby, in relation to the process; in particular, how we have tested the tech for electronic travel authorisations. I assure him that I have personally tried the tech. It is very impressive and is swift and easy to use. It simply uses a mobile phone handset, the chip in the applicant’s passport and their credit card details, while their biometric details are taken by the camera on the phone. I assure the noble Lord that this technology has been subjected to robust testing and the Home Office remains on track to launch the scheme in Qatar in October this year.

We have made a deliberate decision to have a phased rollout, starting with Qatar, before rolling it out worldwide in 2024, to ensure that our systems and processes can accommodate the expected number of applications; we expect the figure to be in the region of 30 million a year. We have invested in brand new technology to ensure that customers receive the best user experience when applying for an ETA. As I say, the Home Office has done extensive testing on the mobile application. We are using the same technology that we used for the highly successful EU settlement scheme, so we are confident that the tech should be fully successful when the scheme is launched; as I say, we remain on track to launch in October 2023.

I have already partly responded to the question asked by the noble Lord, Lord German, about Northern Ireland tourism. I can assure him the Home Office has been working closely with tourist bodies across Ireland to ensure that the ETA requirement has as little impact as possible on Irish tourism, both from Northern Ireland into the Republic of Ireland and the other way around. We are committed to working with stakeholders to ensure that the requirement is effectively targeted through a variety of channels and to mitigate any risk of it being seen as a barrier to pan-Ireland tourism, if I can call it that.

Finally, on the noble Lord’s point about the general increases proposed, these increases clearly reflect that the majority of fees have not been subject to a significant increase since 2018, despite a context of high inflation and record high migration into the UK. As I have already said, it is the Government’s policy that those who use and benefit most from the immigration system should contribute towards the cost of operating the system, reducing the burden on the UK taxpayer. The increases announced by the Government will mean that a greater share of that cost will be met by those users of the system. This in turn will allow more funding to be prioritised elsewhere in the Home Office, including to pay for vital services and support public sector pay rises. These increases, which are within the existing fee maxima, will, as I have said, be made through separate legislation after the Summer Recess.

I reassure noble Lords that the immigration fees will be kept under review over the lifespan of this order and will be updated within the parameters that we are setting today. In the event that fee levels are changed, they will need to be approved by this House and accompanied by a full economic impact assessment. I commend this order to the Committee.

Motion agreed.