New Clause 16

UK Borders Bill – in a Public Bill Committee at 5:00 pm on 20th March 2007.

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Fees

‘(1) Section 42 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004 (c. 19) (fees: power to set amount in excess of costs) is amended as follows.

(2) In subsection (2) after paragraph (d) insert—

“(da) an application or process in connection with sponsorship of persons seeking leave to enter or remain in the United Kingdom,”.

(3) After that subsection insert—

“(2A) Regulations under section 51(3) of the Immigration, Asylum and Nationality Act 2006 (fees), specifying the amount of a fee for a claim, application, service, process or other matter in respect of which an order has been made under section 51(1) or (2), may specify an amount which reflects (in addition to any costs referable to the claim, application, service, process or other matter) costs referable to—

(a) any other claim, application, service, process or matter in respect of which the Secretary of State has made an order under section 51(1) or (2),

(b) the determination of applications for entry clearances (within the meaning given by section 33(1) of the Immigration Act 1971 (c. 77) (interpretation),

(c) the determination of applications for transit visas under section 41 of the Immigration and Asylum Act 1999 (c. 33) (transit passengers), or

(d) the determination of applications for certificates of entitlement to the right of abode in the United Kingdom under section 10 of the Nationality, Immigration and Asylum Act 2002 (c. 41).”

(4) After subsection (3) insert—

“(3A) The amount of a fee under section 1 of the Consular Fees Act 1980 in respect of a matter specified in subsection (2A)(b) to (d) above may be set so as to reflect costs referable to any claim, application, service, process or other matter in respect of which the Secretary of State has made an order under section 51(1) or (2) of the Immigration, Asylum and Nationality Act 2006 (c. 13).”’.—[Mr. Byrne.]

Brought up, and read the First time.

Photo of Liam Byrne Liam Byrne Minister of State (Home Office) (Immigration, Citizenship and Nationality)

I beg to move, That the clause be read a Second time.

The purpose of the new clause is to tidy up some of the powers to raise money to help fund a robust and effective immigration system. I am afraid that I cannot offer the Committee any constitutional imagination, as we already have these powers. Section 51 of the Immigration, Asylum and Nationality Act 2006 gives the IND the power to cost recover. Section 42 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004 gives the IND the power to over-cost charge. The clause allows us to over-cost charge on the basis of the value of the service that we provide to the migrant who applies for leave to enter.

There are currently a number of limitations to the powers, however, and I should like to sketch out two or three of them for the benefit of the Committee. First, we do not have the power to charge for the introduction of sponsorship arrangements. That is significant, because we are shortly to introduce a points-based system, which means that sponsoring organisations, whether businesses or colleges, will have a much more important role. At the moment, there is no law that allows us to charge for such arrangements, and they are expensive. They allow us to put in place an enforcement and compliance network of people throughout the  country to ensure that sponsors behave appropriately. Given the conversations that we had about illegal working and bogus colleges, it is important that that network is robust and effective, so I would like the power to charge for introducing sponsorship arrangements.

The second limitation is a vires issue, which affects UKvisas. UKvisas is allowed to charge for its services under section 1 of the Consular Fees Act 1980. There are constraints on what it can charge for, however. In effect, it can charge only for administrative services that relate directly to consular activity, rather than for any aspect of enforcement of an effective immigration system that entails cost.

We want to do two or three things over the next couple of years to render our immigration system stronger. They include introducing sponsorship. The advent of the points-based system means that a lot of decision making will move abroad, so there will be no UK cost base against which we can charge. That means that there will be a volume shift of business overseas. It could be as high as 10 per cent., or it could be a little bit lower. The risk is that the UK cost base will be spread over a smaller number of applications. Given that many of the costs are fixed, one does not have to be a Nobel prize-winning economist to understand that there is therefore a risk of in-country fees going up.

The education and business communities and indeed the Select Committee on Home Affairs, of which the hon. Member for Hertsmere is a member, have consistently said that they want not divergence but convergence between out-of-country fees and in-country fees. A week or two ago, the CBI said:

“The current system clearly needs to be reformed. If rises in visa fees are necessary to fund these improvements, employers will see it as a price worth paying”.

The Home Affairs Committee said:

“The calculation of visa fees and in-country fees should be aligned” at least in terms of what costs are taken into account and the impact assessment that accompanies them. We want to ensure that there is a degree of flexibility, so that there is not a great deal of divergence between out-of-country and in-country fees.

The new clause allows us to do three things: it allows the IND to cross-subsidise between in-country fee streams, it allows us to cross-subsidise between out-of-country and in-country fees, and it allows us to over-cost charge where necessary for new sponsorship arrangements. The fees to be proposed for such over-cost charging will, of course, be subject to the affirmative procedure, as they are today, and we will have to consult on fees where we plan to recover over costs. Crucially, the new clause will allow us to set fees at the market value and retain the flexibility to protect key segments of the population, as we proposed to do recently with students and visitors.

It is not in our interest, of course, to hike up fees to such an extent that people do not want to come to this country anymore. That would be hugely damaging for the British economy given that each year foreign students pay about £5 billion in fees to our universities  and foreign visitors bring about £13 billion into the economy. I think that tourism is about the fourth or fifth biggest market sector in the economy.

The proposal will not, I am afraid, provide the IND with carte blanche to go crazy and put up fees as much as it would like. That would damage the economy and the country, and I think that the Treasury would have something to say about it. However, with new clause 16 we are seeking to acquire a degree of flexibility to help us render the charging scheme fit for the future.

Photo of Damian Green Damian Green Shadow Minister (Home Affairs)

The new clause is simply headed “Fees.” It is a very short name for a very long clause.

I would describe the Minister’s performance just now as elegantly cynical, which is part of a trend. The Government have found a potential gold-mine about which nobody has complained too much, because the proposal is for a stealth tax on foreigners, which is politically more acceptable given the previous raft of stealth taxes that they have imposed on the rest of us and given that they will use the money to fund the activities of the IND.

So far we have not had any numbers. I shall be interested if the Minister will tell us how much extra revenue the Department has calculated will result from the flexibility that he is adding under this new clause. I dare say that we will have the same debate on visa fees when that comes before the Delegated Legislation Committee in the near future because the same principle applies.

We have no objection to the proposal in principle. The Minister’s last point was a good one: clearly, it is not simply a question of what the market will bear from individual applications or even classes of application because—I assume—he is not proposing to disaggregate it to such an extent that the Department will guess what each individual visa will bear. Presumably, if Goldman Sachs wants to bring in a bond trader, it would be in its economic interest to pay millions for that visa, whereas even the most brilliant student at the best university would not justify that kind of payment.

As well as figures, it would be interesting if the Minister would give us an indication of the degree of flexibility that he is proposing and, therefore, of who is likely to be funding the measure. As he said, the new clause refers to sponsors and, therefore, to UK businesses, academic institutions and, presumably, UK individuals. To put actual figures in the new clause would be illuminating for the Committee.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

It is reasonable to have a certain amount of flexibility and so the new clause has its rationale. There are some strange situations regarding fees charged at the moment and there needs to be some flexibility for cross-subsidy.

Photo of Liam Byrne Liam Byrne Minister of State (Home Office) (Immigration, Citizenship and Nationality)

I am reminded that I should spend more time, rather than less with the hon. Member for Ashford because I had not thought about individual-specific charging regimes. That is an interesting idea and I shall task my officials with working out a policy on it this afternoon.

Mr. Blunt rose—

Photo of Liam Byrne Liam Byrne Minister of State (Home Office) (Immigration, Citizenship and Nationality)

I shall spend more time with the hon. Member for Reigate if he would like.

Photo of Crispin Blunt Crispin Blunt Opposition Whip (Commons)

I am grateful to the Minister, but what confidence should we have in his judgment and foresight on that measure? Only last night, he told Members in the Chamber of the House of Commons that he was

“sure that the hon. Member for Rochdale (Paul Rowen), who is representing the Liberal Democrats on that Committee, will forensically interrogate our proposals. On that basis, I commend the motion to the House.”—[Official Report, 19 March 2007; Vol. 458, c. 644.]

That was in response to the hon. Member for Somerton and Frome (Mr. Heath), who in stentorian tones, to the whole of the main Chamber of the House of Commons, said that

“it is not proper for this House, which prides itself on its ability to scrutinise when given the opportunity to do so, to allow to pass without any comment whatsoever a Ways and Means resolution that allows the Government, yet again, to ride roughshod over the House’s ability to scrutinise its business properly.”—[Official Report, 19 March 2007; Vol. 458, c. 643.]

The hon. Gentleman will have heard the interesting intervention from the hon. Member for Birmingham, Yardley, representing the Liberal Democrats here, in which he said that it was reasonable to have flexibility. I wonder whether the Minister would like to reconsider the terms in which he proposed the Ways and Means resolution last night.

Photo of Liam Byrne Liam Byrne Minister of State (Home Office) (Immigration, Citizenship and Nationality)

We have had to rely on members of the official Opposition for the most forensic analysis of the proposals this afternoon. The hon. Member for Ashford is right that further debates are scheduled about the precise charges proposed for next year. I live in hope that that forensic analysis is yet to come.

The hon. Gentleman made two important points, one about the degree of flexibility and the second wanting me to estimate the kinds of moneys that I might have in mind for the next financial year. We are putting forward no proposals for individual-specific pricing, although that is an interesting idea, which may warrant a bit more explanation. I am not sure that we would quite have that latitude within the provisions of new clause 16. More important, on the question of the amount of money that might be raised, when we published our enforcement strategy a week or two ago, I was optimistic that we might raise up to an extra £100 million through the measures in the next financial year. That is important because it means that we will be able to fund extra detention space and immigration officers and to strengthen our systems of immigration and of immigration policing. There are of course volume risks, but those are conservative assumptions. With that, I recommend the clause to the Committee.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

Ordered,

That certain written evidence already reported to the House be appended to the proceedings of the Committee.—[Mr. Byrne.]

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Photo of Liam Byrne Liam Byrne Minister of State (Home Office) (Immigration, Citizenship and Nationality)

I take the opportunity before we conclude our business to thank you, Mr. Illsley, and your co-Chairman, Mr. Amess, for such courteous and efficient chairing of business—so efficient that we have finished slightly earlier than anticipated, despite the level of analysis and the depth of discussion. I also thank the Clerks, the Hansard reporters, the police and others who have been connected with the conduct of the Committee. I think it has run extremely smoothly. In my Back-Bench career, I served on something like six Bill Committees in a reasonably short space of time, but this is by far and away the smoothest running Committee that I have sat on.

I was grateful too for the exemplary organisation of the public evidence sittings. Like many members of the Committee, I enjoyed the part that we played in the constitutional innovations that the Leader of the House steered through. I think that they were a valuable aspect of the scrutiny of the Bill. I also thank the Whips for the way that they have helped us stay on course. I would like to thank not only the Opposition Front-Bench spokesmen but all members of the Committee for the helpful and constructive way in which they have approached the debate. Finally, I thank my officials, who have worked extremely hard, often very late at night, over the past six months in order to put the Bill before the Committee. The Bill has been dispatched after a good deal of careful consideration. I thank the entire Committee, particularly the co-Chairmen.

Photo of Damian Green Damian Green Shadow Minister (Home Affairs)

I echo the Minister’s words of thanks, particularly to you, Mr. Illsley, and to your co-Chairman. It has been a life-enhancing experience to be on a Committee chaired by the two of you. Similarly, I particularly thank the Clerk of the Committee for her hard work and guidance during the discussions and the tabling of amendments and so on, and of course the Hansard reporters and the police. The Minister talked about constitutional innovations, but I think that thanking Whips in public is possibly a constitutional innovation that I, as a Conservative, will have to go away and think about before committing myself to. It might be dangerous.

I extend my thanks and the thanks of those on the Opposition Benches to the Ministers for such clear exposition as they have been able to give on some of the amendments and clauses. As we all know, this has been not only a well run Committee, as the Minister said, but a good-natured one. I hope that, in its way, it has done some good work in moving the Bill forward and scrutinising it so that we can return to it, refreshed, at its later stages and seek to improve it even more.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley 5:15 pm, 20th March 2007

I echo those thanks, and I think that people will thank me for my brevity if I sit down. I also thank the hon. Member for Reigate for quoting last night’s Hansard.

Photo of Eric Illsley Eric Illsley Labour, Barnsley Central

Before I put the Question, I thank hon. Members for their kind comments about myself and my fellow Chairman. I echo the Minister’s thanks to the police, the Hansard writers and the attendants. I  add my thanks to the Scrutiny Unit and the witnesses who gave evidence in front of the Committee. I congratulate Members for the good-humoured way in which they have conducted themselves throughout the passage of the Bill, particularly as we have been following something of an experimental procedure  over the past few weeks. Last, but by all means most, thanks to the Clerk for her hard work during the Committee stage.

Question put and agreed to.

Bill, as amended, to be reported.

Committee rose at sixteen minutes past Five o’clock.