My Lords, I thank all noble Lords who have spoken, particularly the noble Baroness, Lady Lister of Burtersett, who tabled this debate and has given us the opportunity to discuss these important issues. Before I address the points raised, I will summarise how fees are set and the role of Parliament in setting fees for immigration and nationality applications.
It is important to emphasise that the Home Office cannot set or amend fee levels without obtaining the approval of Parliament. This ensures that there are checks and balances in place and full parliamentary oversight of the fees regime. Immigration and nationality fees can be set only within the limits specified by the Immigration and Nationality (Fees) Order, which include the maximum fee levels that can be charged on each application type or service. This is laid in Parliament and subject to the affirmative resolution procedure.
Individual fee levels are calculated in line with Managing Public Money principles and the powers provided by the Immigration Act 2014. Specific fees are set out in regulations, which are then presented to Parliament and subject to the negative procedure. The regulations laid by the Government in September increased fees across a number of immigration and nationality routes, including those for people seeking to visit the UK as a visitor and the majority of fees for entry clearance and for certain applications for leave to remain in the UK, including those for work and study.
Noble Lords are aware of the Government’s intention that those who use and benefit from the migration and borders system should contribute to its funding. In that, I agree with my noble friend Lady Altmann. The burden of operating the system should not unduly fall on the UK taxpayer. To answer directly the noble Baroness, Lady Blower, that is not profiteering—it is protecting the interests of the British taxpayer.
The increases that came into effect in October were, in the majority of cases, the first substantial increases made since 2018. They are proportionate when considered against wider price trends in the intervening period, to answer the noble Lord, Lord Coaker. At a time of high inflation and record migration, it is important to ensure that the system is sustainably funded. The recent increases have led to the raising of some concerns in the House around the impact on the UK economy and the potential for people to be deterred from visiting, working in and studying in the UK. As I have already set out, the Government’s policy is that the cost of operating the migration and borders system is to be funded by those who use it. This policy is at the heart of the decision to increase fees.
The Government have published an economic impact assessment—I will come back to this—alongside the regulations, setting out their potential impacts. The Government keep fees under review and will continue to monitor the position, but there is limited evidence to date that fee increases have impacted on the number of people coming to visit, work in and study in the UK. In answer to the noble Baroness, Lady Lister, the best interests of the child were considered in the economic impact assessment.
The noble Baroness, Lady Lister, also raised concerns about the potential for people to fall out of lawful immigration status and face significant debt and precarity. Those who are in the UK on family and human rights routes can be assured that these regulations made no changes to the provision of existing waivers and exceptions from the need to pay application fees in a number of specific circumstances. That includes affordability-based waivers for entry clearance and leave to remain on family and human rights grounds, which ensures that families unable to afford the fee are not prevented from making an application to enter or remain in the UK. Additionally, for children seeking to register as a British citizen, an affordability waiver was introduced in 2022 and has improved access to British citizenship for children who may face issues in paying the application fee. I say to my noble friend Lord Moylan that I will come back to this subject in a second.
These provisions ensure that the Home Office’s immigration and nationality fee structure complies with international obligations and wider government policy. We believe it represents the right balance between protecting the integrity of the department’s funding model and helping to facilitate access to immigration and nationality products and services, including for the most vulnerable. I note the concerns raised about the potential for these fee increases to increase the operational burden on the Home Office. We acknowledge that the recent increase may see more people seeking a fee waiver, but the Home Office has an obligation to ensure that the integrity of the migration and borders system’s funding model is maintained. I hope that provides at least some reassurance that those who cannot afford the fee will not be prevented from making an application to enter or remain in the UK on human and family rights grounds.
As I said earlier, in recent years the Government have taken steps to ensure that the fee for children seeking to register as British citizens is not a barrier to them making an application, through the provision of the waiver on the basis of affordability and the fee exception for children who are looked after by local authorities. Adult registration applications do not have a waiver available, but most of the applications for registration are made by children.
On the breach of the 21-day rule, I say to the noble Lord, Lord German, that—in comparing this with discussions about the treaty—there is a significant difference between primary and secondary legislation. On this particular rule, I regret that it was late. The scheduled date of commencement of fee increases was 4 October, in view of a planned laying date of 13 September, with the commencement date used as the basis for wider communications and delivery planning activity. However, late amendment to the regulations meant that this was not possible. Given that delaying the commencement date would have cost the department an estimated loss of additional revenue of about £2 million—a significant amount, which would have impacted priority functions—and that further changes to updated front-end systems would be needed at some additional cost and delay, it was determined that the original commencement date should be maintained.
5 pm
Further consideration has also been given to the prior announcement that was made to Parliament in relation to these increases on 13 July by the Chief Secretary to the Treasury as part of a wider Statement on public sector pay. If the regulations had been laid on the original schedule, the 21 days would have been met. The rule should be broken only when urgent action is necessary but, as noted previously, the department determined that it was necessary to maintain the 4 October commencement date to ensure that the full projected income from the fee increases was realised in 2023-24.
On the Explanatory Memorandum, the impact assessment was prepared for the instrument, but it was published on the website on 18 September 2023—again, it was a little late and I apologise.
The noble Baroness, Lady Lister, asked me directly whether visa fees are paying for public sector pay increases. As well as the cost of processing an application,
the Immigration Act 2014 allows the Home Office to have regard to a number of factors when setting the fees for immigration and nationality functions, including the cost of operating other parts of the system, benefits that are likely to accrue to successful applicants and the cost of processing the application. However, income generated from application fees can be used only to fund the migration and borders system. It is the Government’s policy that those who use and benefit most from the immigration system should contribute to the cost of operating the system, reducing the burden on the taxpayer. These increases allow more funding to be prioritised elsewhere in the Home Office, which will include paying for vital services.
On setting higher fees and deterring applications, there is little evidence that fee increases to date have significantly affected demand on work, study or tourism routes. When we make fee changes in legislation we publish impact assessments that evaluate potential behavioural impacts on prospective applicants.
A number of noble Lords, including the noble Baronesses, Lady D’Souza and Lady Lister, and the noble Lord, Lord German, asked how the UK’s visa fees compare with those of key competitors. UK visa fees are broadly competitive when compared with the fees charged by comparative countries globally. However, visa products are difficult to compare because visa offers—which include things such as benefits and entitlements gained, duration of stay and so on—vary significantly between countries. We will continue to keep our visa fees under review. As I have said many times, visa fees help fund the broader migration and borders system.
My noble friend Lady Altmann raised some concerns about the impact that increased fees will have on the economy. There is limited evidence suggesting that fee increases to date have affected volumes on those routes. The impact assessment published alongside the regulations suggests that an increase in fee levels is unlikely to have an impact on demand. On the numbers that the noble Lord, Lord German, was talking about, I do not see the fee increases as particularly burdensome on business. I have not read the precise paragraph to which he referred, but I cannot remember seeing a figure of tens of millions.
On indefinite leave to remain, a subject raised by the noble Baroness, Lady Lister, I am aware of concerns about the fee for indefinite leave to remain. The right to stay indefinitely in the UK is one of the most valuable entitlements of any product offered, which is why it is right that the fee for this product has increased in line with the changes being made to wider immigration and nationality fees.
A grant of indefinite leave to remain is not usually necessary to enable people to remain in the UK on the basis of their Article 8 or other ECHR rights, as these can usually be met through a grant of limited leave to remain. The provision of an affordability-based waiver for limited leave on family and private life routes allows an individual or family to remain here lawfully, and to then apply for settlement and pay the fee when the funds become available.
There was some interest in the statistics behind affordability fee waivers, and I am happy to report that I have some. Some 43,947 fee waiver applications were received in 2022. In the first two quarters of 2023, the number was 23,833—a reduction from the number received during the same period in 2022, when it was significantly higher.
We have not increased fees for limited leave to remain due to the need for further technical arrangements to be put in place to ensure that all applicants can pay the correct level of fee. It has not been possible to include this increase in these regulations, but it is the Government’s intention to increase the fee for limited leave to remain, including applications on family and human rights routes, at the earliest opportunity. Until then, the fee for limited leave to remain will stay the same.
I have talked a little bit about waivers. The right reverend Prelate the Bishop of Chichester made some very good points about publicising those fees, which I will take back. We have always provided for exceptions to the need to pay application fees in a number of specific circumstances, including affordability-based waivers for entry clearance and leave to remain on family and human rights grounds, and applications for child citizenship registration. These provisions ensure that the Home Office’s immigration and nationality fee structure complies with international obligations and wider government policy. We believe this represents the right balance between protecting the integrity of the department’s funding model and helping to facilitate access to immigration and nationality products and services, including for the most vulnerable. I also note my noble friend Lady Altmann’s points about an “in-between” fee, which I am very happy to take back to the office for further discussions.
The noble Lord, Lord Coaker, asked me about the immigration health surcharge. I hope it is appreciated that this is not the right time to discuss the proposed increase in that. The level of the immigration health surcharge is set in separate legislation, an amendment to which has been laid in Parliament and will be subject to debates here and in the other place. I am not sure when it is scheduled, but I think it is relatively imminent.
The noble Lord, Lord Coaker, asked me how much money was generated from visa and immigration income certificate and passport fees in 2022-23, which is a much broader range. It is about £2.8 billion, not including income from the immigration health surcharge. The full operating expenditure cost of the migration and border system was £7.5 billion in 2022-23, including the Migration and Borders Group customer service covering passports, visas, immigration, borders and enforcement.
I think I have answered as many of the questions as I can. I will write to anybody I have missed, and I apologise if I have. I offer thanks again to the noble Baroness, Lady Lister, for securing the debate and to all who have spoken today. It is an important issue and I hope I have been able to provide a degree of clarity on the rationale and detail of the Government’s approach.