Clause 94 - Fee for work permit, &c.
Nationality, Immigration and Asylum Bill
Mr Humfrey Malins (Woking, Conservative)
Since Labour took power in 1997, work permit regulations have been relaxed and simplified. That has had the dual effect of making it easier for employers to bring to the UK non-European economic area nationals, especially those in sectors with skill shortages, and of reducing the need for employers to seek legal assistance when making such applications. We welcomed those measures, as did various industry representative groups such as the Computing Services and Software Association and the Confederation of British Industry.
With that background, we are slightly perplexed by the recommendation to charge employers who need to make work permit applications. It seems contrary to the Government's assumed aims for several reasons. First, there is a danger that high charges will discourage some small and medium-sized businesses that have a genuine requirement to employ individuals from non-EEA countries from going through the formalities involved in applying. That could damage the businesses that are then unable to fulfil skills requirements. It may also encourage some employers to employ people outside the regulations, for example on visit visas. That practice is already widespread.
The second possible consequence is that because of the increased risk associated with making work permit applications, employers may be more likely to resort to using legal professionals to make the applications, thereby increasing costs again. That will give a major advantage to companies that have in-house legal departments, and will needlessly discourage companies with smaller profit margins and turnovers.
We are not blind to the possible benefits of introducing fees. It is estimated in the Bill that fees for the expected 175,000 applications next year will raise about £15.8 million, which will reduce the burden on the taxpayer. However, we are concerned about proposals to move that £15 million burden on to the shoulders of employers, who are already having to pay increased national insurance contributions. Another
possible benefit could be to discourage applications that are either fraudulent or likely to fail, but that might not happen. At the moment, among the worst offenders in the fraudulent use of work permits are recruitment agencies that masquerade as employers and body shop people to the UK. Introducing charges would have little or no effect on dissuading them from continuing, as the mark-up that they get from body shopping is so high that a fee would not be noticed. They will just pass the fee on to their unwitting candidates, as is often the case with legal fees.
Our final concern is about the Secretary of State's discretion to make an exception in certain applications. The aim is to raise £15.8 million through the scheme, and it estimated that there will be 175,000 applications next year, but we do not know whether all employers will share the burden equally. The Home Secretary may be considering excluding the health care and teaching sectors from the charges, so what level of charges should we expect for the other sectors? If the Secretary of State decides to exclude other industries as time goes on, how will that affect the companies that need to make extension applications? If the Secretary of State does not intend to exclude those sectors from charges, is it a good use of resources to be spending time moving entire funds from one branch of government to another?
However, as industry and skills requirements change, we do not oppose the provision to enable the Secretary of State to use his discretion on such matters, and we want to avoid yet another new Bill being presented in just a few years time. I urge the Secretary of State to consult widely on the issue, and recommend that he considers excluding from these charges small businesses with perhaps fewer than 20 employees, or with a turnover of less than £1 million. He may also want to consider making the first five or 10 applications in a 12-month period free of charge. We therefore propose that the charges do not exceed £150, so as not to put a massive burden on small and medium-sized enterprises. That figure is significantly lower than that of the United States or France. However, the Republic of Ireland and Germany followed our lead in relaxing work permit regulations, from which they have greatly benefited. They have not felt the need to introduce fees. We support the introduction of fees with some misgivings, but believe that the burden on business will not be too great if a maximum fee is introduced at this stage and if there is consultation on the other points raised.
Amendment No. 300 would insert:
''but no fee shall be payable by non-profit organisations.''
Several non-governmental organisations have expressed strong support for that proposal. The Immigration Law Practitioners Association in particular believes that a distinction needs to be made between profit-making and non-profit-making organisations on the fees charged for work permits.