UK visas should be auctioned, migration advisers say

The right to settle in Britain should be auctioned off to wealthy foreign investors, government advisers say.

At present migrants can gain entry by investing £1m or more in the UK.

But the Migration Advisory Committee says ordinary British citizens gain little from this.

It recommends doubling the minimum investment to £2m and auctioning slots with a reserve price of £2.5m - with any surplus going to good causes in a scheme similar to the National Lottery.

The changes recommended in the committee's report would apply to settlement rights only and not citizenship.

It would be the first scheme of its kind anywhere in the world - but the decision on whether to implement it rests with Home Secretary Theresa May.

A Home Office spokesman said: "The government is grateful for the MAC's report and will carefully consider its recommendations."

'Premium' route

The migration advisers expect about 100 visas a year to be auctioned with the "winners" getting accelerated settlement in the UK - after two years rather than the five it is with the other investment routes.

Auction winners would also benefit from relaxed residency requirements, effectively halving to 90 days the amount of time an individual has to remain resident in the UK a year.

At the moment, migrants who invest £1m, £5m or £10m get permission to apply for permanent residence in the UK after living there for five, three or two years respectively. They do not need to speak English and can bring their spouses and dependants.

The Migration Advisory Committee suggests the auction system could replace the "premium" routes for those who invest £5m or more.

Sir David Metcalfe, chairman of the committee, said the current scheme brought very little economic benefit for British citizens, because most applicants were buying gilts to qualify - so were effectively loaning the government money, rather than investing in the UK.

Sir David said: "The Brits get very little out of this at the moment. The migrants get a huge amount."

He said that under the proposed scheme, thanks to the good causes fund, British people would get something out of it, adding: "I don't find it demeaning (to the UK) at all."

He said the proposed scheme was not about "selling off British passports" - investors would still have to have lived in the UK for a minimum of five years before they could apply for full citizenship.

'eBay visas'

Immigration lawyers have attacked the idea of auctioning off UK visas. Nick Rollason, head of business immigration at Kingsley Napley, told The Financial Times it would create an "eBay culture" and leave a bad taste with the British public.

Sophie Barrett-Brown, a senior partner with Laura Devine solicitors, said: "An auction system 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."

Investors could help fund inner-city sports facilities, the committee says

But Sir David said the immigration lawyers had made their comments before seeing his committee's report and he compared them to the Leeds United football team of the 1970s, who he said would "kick people in the tunnel" before the start of the game.

He also suggested the lawyers were only interested in the "fat fees" they received from their foreign clients, adding: "Why don't they have the same concern for British citizens? Why are they hostile to a good causes fund?"

Sir David said causes such as the fight against prostate cancer or providing sports equipment for inner-city schools could be funded by auctioning off visas - and he suggested the scheme could even be administered by the National Lottery.

Deficit payments

At the moment, he said, the main benefit to UK residents from the investor route was from the stamp duty they paid on property purchases but this had been greatly exaggerated because "someone else would buy the house if the investor did not".

Claims investors were helping to pay off the deficit did not hold water either, he argued, as their contribution was tiny compared with the £300m of gilts sold every day by the British government.

But the migrant investors and their families, on the other hand, benefited from Britain's property rights, schools, capital markets and legal system, he added.

The UK has operated a migration route for investors and their families since 1994 - but the amount they have had to invest has not changed in that time.

Last year, 560 investor visas were issued, with a further 1,030 issued to the applicants' dependants. The figure has gone up from 140 applicants in 2009, with 264 dependents.

Nearly half of the investor visas issued since 2008 have gone to Russian or Chinese nationals - 433 and 419 respectively - followed by US citizens, on 93, Egyptians , 46, Indian, 44, Kazakhstanis, 41, Iranians 38, Pakistanis, 38, Australians, 36 and Canadians, 36, out of a total of 1,647.