Two announcements were made regarding UK immigration last week.  The quarterly statistics on migration were published by the Office for National Statistics on 25th February.   Application fee increases were announced by UK Visas and Immigration two days later.   

The ONS report lists the statistics in respect of migration to the UK for the final quarter of 2015.  It concluded that there had been a statistically insignificant rise in net migration, in the last year, due principally to a lack of emigration from the UK.   

The report shows the number of people applying for the Tier 1 (Investor) visa, which allows immigration of high net worth individuals if investing £2 million, to be falling sharply.  Forty six such applications were approved in the final quarter of 2015, the total for the year being just 192.   In 2014, there were 1,172 such applications.  Most successful applications were made by citizens of Russia, China and Brazil. 

The reasons for this fall are the subject of speculation.  Some matters which may be relevant include: 

  • proposed changes to the tax and immigration regime in the UK which make the prospect of residence less attractive;
  • the present economic positions of Russia and China,  two countries which have provided higher numbers of such applicants in recent years;
  • the availability of economic citizenship programmes in other European Union countries which allow citizenship more quickly for less cost;
  • the possibility that the UK may leave the European Union following the referendum on membership in June, which may restrict freedom of travel for British citizens.

On 26th February, application fee increases were announced.   Most of the application fee increases announced reflected the anticipated annual increase of around 2%.   More significant rises were announced in respect of the cost of settlement and nationality application fees (up to 25%) and those seeking to utilise premium UK Visas and Immigration services which allow for fast processing (those fees rise up to 33%).  

Timeframe

The fee increases will take effect on 18th March throughout the United Kingdom and on 6th April in the Isle of Man

Comment

The recent Migration Advisory Committee report on the future of skilled migration to the UK advised that the best way to restrict access to the labour market is through price rather than additional regulation or predicting which occupations may be in short supply in future (see our e-briefing here).   Such a restriction continues to be an important part of the Government’s immigration policy.  These two announcements can be seen respectively as a consequence of restricting migration through price and as an attempt to do so in future. 

In the case of investors, the November 2014 doubling of the investment threshold required immediately pre-dates the dramatic fall in numbers.  In combination with other factors, that appears to have prevented many such applications.     

Any impact of high application fees upon the net migration of workers has yet to be seen, but does appear likely.  In combination with the introduction of the Immigration Health Surcharge last year and the proposed Skills Levy to be added to application fees for Tier 2 migrants, those seeking to move to the UK as skilled workers may need to pay several thousand pounds per assignment in the near future. Aside from these announced changes, this may make employers think twice about whether an assignment is actually necessary.