According to a report in the Times, the Home Office approved 735 applicants from wealthy foreign investors from outside the EU for UK residency permits in the year to June. The previous year saw an approval of 500 such applicants while in the year to 30th June 2009 saw just 100. These applicants have to enter through the Tier 1 (Investor) Visa route and have to invest in shares, government bonds or loan capital to qualify for the visa. Now the minimum investment requirement has become £2m as opposed to the previous £1m requirement.
The majority of the migrants have traditionally bought government bonds or gilt-edged bonds so an assumption can be made that those 735 approved applicants got their visa by lending money to the treasury.
Millions of people can get access to £1m or even £2m for a riskless investment in Britain. Additionally with an investment of £10m, the investor can apply for permanent settlement rights after just two years. For this reason the scheme has drawn criticism from some quarters that it favours the rich.
It’s also argued that by effectively lending money to the Government does not help in the long term in reducing the deficit,, it only finances it. Therefore there are competing arguments in favour of donating the money to the Treasury instead.
However this would bring accusations that the Government was ‘selling’ UK citizenship. A proposal by the Migration Advisory Committee suggesting the auctioning of these visas where the proceeds over a particular threshold were to be given in for good causes was not accepted by the Home Office.
The Times report also mentioned that out of the approved applicants last year there were 295 Chinese and 180 Russians, possibly including the families of Chinese officials fearful of Xi Jinping’s corruption crack down, and wealthy Russians leaving Russia because of the Putin regime.
The benefits to the UK of wealth based immigration? The competing arguments
Some would welcome rich investors who, it is argued, spend money and pay taxes when they settle in the UK. A line which is often adopted by the UK Government, that it encourages economic growth and prosperity. It is further argued that the concentration of wealthy foreigners in certain parts of the country, particularly London, has driven up property prices and has skewed and polarised the property market. Opponents also argue that consumption and spending is marginal and in any event the paying of tax falls when income and taxable wealth exceeds a particular threshold.