The government’s official immigration advisers have defended proposals to auction off visas giving the right to settle in Britain to the highest bidders.
The suggestion, from the home secretary’s migration advisory committee (Mac), had been criticised by immigration lawyers for creating an “eBay culture” for permanent UK residence.
Under the proposal, overseas millionaires will be invited to bid for a limited proportion of investor or tier-one UK visas that allow holders and their families to live indefinitely in Britain.
Professor David Metcalf, the chairman of the migration advisory committee, defended the proposal to auction off investor visas. He said: “Some people say ‘isn’t it awful to sell off visas? Well, it is better than giving them away, which is what we are doing now.”
The proposals are being put forward in response to concerns that the existing investor visa route fails to benefit the UK and has simply become a cheap way for some wealthy Russian, Chinese and Middle Eastern families to settle permanently in Britain.
The existing route, known as tier one of the points-based immigration system, lets rich individuals accelerate the process of being allowed to settle in the UK by between two and five years depending on how much is invested.
Applications have been running at about 600 a year to apply under this route, which does not require applicants to be able to speak English or have a job to come to.
Official concern over the use being made of tier-one visas first came to light in December 2012 when the Home Office announced that leveraged investment funds held in offshore accounts could not be used to fund their investments in Britain.
There has also been concern that the investments made have often been in government gilts or loans to the applicant’s own businesses – neither of which are directly beneficial to the British economy.
The Mac proposes that about 100 “premium” investor visas should be auctioned off each year with sealed bids and a minimum reserve price of £2.5m.
Successful bidders would be expected to invest at least that amount in gilts, infrastructure bonds and other investments. They would be required to donate £500,000 to a “good causes” fund.
The current £1m minimum to qualify for the route is to be raised to £2m and the “premium” route for those willing to invest £5m and £10m is to be scrapped.
In return, they would get a fast-track route to the right to settle permanently in Britain in two years instead of five years and a relaxed residency requirement meaning they would only need to spend 90 days a year instead of 180 days a year to qualify. They would not automatically get a UK passport but would have to apply in the normal way.
A total of 560 overseas millionaires applied for investor visas in the 12 months to last September. Fifty of the applicants were turned down. Most who have applied have been Russian and Chinese.
Metcalf said the idea of a visa auction had been experimented with in Singapore but the committee had come to the solution as a group of economists trying to find a mechanism to establish the market price.
“At the moment the Brits get very little out of this and the investors get an awful lot. With an auction that requires them to give money to good causes, such as funding for cancer research.” He denied it was selling passports.
Metcalf has told MPs he believes it is time to think more creatively about the operation of the investor visa route.
“It may very well be that we should be auctioning some of these slots,” he told the Commons home affairs select committee. “There should be a proper discussion about it. Equally it may well be that we should be letting people in if they endow a Cambridge college, a major teaching hospital or the London School of Economics with £10m,” he added.
Nick Rollason, head of business immigration at the Kingsley Napley law firm, warned that an auction of investors’ visas would create an “eBay culture” for visas that would be unpopular with the British public.
Another leading immigration lawyer, Sophie Barrett-Brown of Laura Devine Solicitors, added: “An auction approach has, rightly, been rejected by the Home Office previously (when the points-based system was first introduced) and sent out the wrong message to the public.”
She said the alternative suggestions expected in the Mac report had to be seen in the context that it had been asked to provide an analysis and recommendations on the economic impact of tier-one investors: “The UK government will take into account wider policy considerations in deciding which of the migration advisory committee’s suggestions to follow,” she said.
UK visa sell-off plan defended by government"s immigration advisers
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