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Immigration and Nationality (Fees) Regulations 2011

My Lords, I, too, am grateful to the noble Earl for his introduction and detailed and helpful explanation, and for agreeing to answer questions not necessarily confined to this order. As he said, the fees contained in the order are set in the context of the Immigration and Nationality (Fees) Order 2011, which we debated some weeks ago. I was interested by the remarks of the noble Lord, Lord Avebury. I have not taken it that this has been drawn to the special attention of the House. There are three categories in the report: instruments drawn to the special attention of the House, other instruments of interest and instruments that are not drawn to the special attention of the House and which presumably are not thought to be of interest either. That probably explains why the Merits Committee has not given any further explanation of its consideration of this. I suspect that it has an intrinsic interest in the fees structure arising from the decision of the Government to move to a flexible charging model aimed at allowing the UKBA to generate sufficient revenue. The noble Lord raised very apposite questions. The noble Earl, Lord Attlee, will not be surprised if I mention the context in which we debate this, and the responsibilities of the UKBA. The agency is expecting a reduction of 5,000 staff. Almost every day, Ministers talk about the new responsibilities of the UKBA. I have raised this matter on a number of occasions but have yet to receive a response to my concern about whether the UKBA is in a position to take a massive reduction in the number of its staff when it is having new responsibilities constantly placed on it. Perhaps the noble Earl will comment on that. We have already discussed the principle of the fees increase. This is our opportunity to look at some of the detail, and I will ask the noble Earl a few questions. Annexe 5 contains an interesting estimate of the decrease in annual applications. The estimate appears to be related in part to elasticity assumptions contained in Annexe 4. I note that on page 12 of the impact assessment there is some discussion of the methodology of estimating the decrease in applications. I will not tempt fate or put the noble Earl through agony by asking for an explanation of the methodology, but perhaps he would comment on how robust the methodology is, and how accurate are the estimates in Annexe 5. As the noble Lord, Lord Avebury, suggested, they will have a knock-on impact on the resources that will be made available to the UKBA. I also refer the noble Earl to page 13 of the impact assessment, where the consequence of the fees increase is expected to cost the UK economy £24.4 million in 2011-12, and £89.4 million over the next four years. My reckoning from the tables contained there is that the net result, taking account of the extra income through the fee charges, is a very small benefit of around £4 million per year. Can the noble Earl confirm that? To me, this means that the benefits are therefore extremely marginal. They might be advantageous in relation to Home Office funding and the funding of the UKBA, but because of the consequences to the UK economy, the overall profit and loss account seems to come out even. On that basis, can the noble Earl comment on whether this is really an appropriate way forward? I would be grateful if he would clarify the figures in the table on page 13 of the impact assessment, which I was confused by. These show revenue expected to be raised from fee changes in 2011-12 to be £24.1 million, yet in the first paragraph on page 14 of the impact assessment it is stated that the UKBA’s annual income is estimated to rise by £65.4 million as a result of the fee changes. I am sure I am being dense here—there must be a relationship between those two figures, but I could not see what it was. It may be that one of those figures is a netted figure, but rather like the noble Lord, Lord Avebury, I would be grateful for some clarification of those figures. Also, I would like to ask the noble Earl about the implication of the fee rises on fees charged by other countries to British citizens going out to those countries. I raise this because I was at an occasion organised by the Birmingham Chamber of Commerce last Friday, when someone in the discussion raised a question about reciprocal arrangements. A company sending a large number of employees to work in China, I believe, raised the point that it will now have to pay higher fees because the Chinese will put the fees up to reciprocate those charged by the UK. Is this an accurate assessment of the position, and has the additional cost to UK businesses operating abroad been factored into the Home Office calculations of the net cost and gain to this country, particularly when it comes to the economic assessment? Finally, I refer the noble Earl to paragraph 12.1 of the Explanatory Memorandum and the proposal to monitor the impact of fees. I welcomed the comments in his opening speech when he emphasised that his department would be monitoring the fees. Yesterday he said that everything is kept under review by the Government, as indeed it is—many a time have I told the House that a matter is under review—but I got the impression that this was a rather more active review. Can the noble Earl give a little more information about that, and say whether it would be possible to make some reports to Parliament on the progress of that review from time to time? I think Noble Lords would find that helpful: in terms of the impact and whether the assessment has been right regarding the reduction in the number of people coming here as a result of the fees increase; with some wider issues such as some of the points raised by the noble Lord, Lord Avebury; and with the issue of whether the calculations relating to resources to UKBA have proved to be reasonably accurate.