Tier 1 Investor Visas ‘Not Fit For Purpose’

According to Professor David Metcalf OBE, Tier 1 (Investor) visas are “absolutely not fit for purpose” and he said the UK derives “absolutely no gain” from the operation of this golden system of immigration and citizenship for wealthy individuals. Quite paradoxically, these revelations, made by the chair of the independent Migration Advisory Committee (MAC), come off the heels off the government’s concerns that criminals are using the buoyant London property market to conceal their ill-gotten gains. Under fire from the Home Affairs Select Committee on Tuesday 20 October 2015, Metcalf also admitted before MPs that the home secretary failed to consult him prior to launching her failed bid to reduce net migration to the tens of thousands. Things are made even more scandalous by the fact that the British taxpayer is doling out huge sums of money to potentially dodgy foreign businessmen and oligarchs who invest in gilts and are recklessly rewarded with accelerated settlement rights and citizenship over and above the interest money earned from investing in government bonds. Interestingly, Metcalf also backs the controversial minimum income requirements for spouses and suggests a “minimum gross income figure to support a two-adult family of between £18,600 and £25,700”.

So-called Tier 1 “golden visas” are fashionable among the Chinese and Russian elites and Chinese investors (more than 350 in 2013-2014) using the scheme are increasing at an exponential rate. Although the scheme brings billions to the UK in investment its weaknesses are all too apparent to MAC and Transparency International says that the visas are being used to launder money. Metcalf is very concerned that the home office is handing settlement rights out to rich individuals and he also thinks that the UK is paying foreigners for the privilege of acquiring British citizenship. Metcalf’s claims could not have come at a more inopportune moment because the Chinese president Xi Jinping is visiting the UK on a four-day state visit and the two countries have just signed business deals worth £40 billion. The seriousness surrounding the deal-making was so profound that even Labour leader Jeremy Corbyn succumbed to pressure and decided not to engage in political grandstanding by upsetting Xi Jinping – who was clear that opportunity may knock just once and had played hard to get with president Obama in a recent state visit to America. On his best behaviour, a conciliatory Corbyn even shook Her Majesty’s hand to mark of the solemnity of the occasion. (This is so notwithstanding the fact that his fellow trade unionists are urging Cameron to put pressure on the Chinese president to tackle cheap Chinese steel imports that are wreaking havoc on the British steel industry which is near collapse – thousands of jobs have been axed because of the closure of Tata steel plants in Scunthorpe and Larnakshire and more layoffs are expected elsewhere.)

But the speaker of the House of Commons John Bercow, who seems to have an extremely poor family life, could not resist heckling president Xi by reprimanding China’s lack of respect for “individual liberty” and made pointless threats about how the world was “watching” Beijing’s political moves. However, the Chinese leader, who is clearly a dictator by western standards, decided to rise above the provocative remarks and insults levelled at him. Acknowledging that he was addressing the “mother of parliaments”, he nevertheless asserted that ancient Chinese legal texts predated the English legal system and stressed that one Chinese legal charter was 2,000 years old.

A cunning character, he could probably see a bright red star burning over London in the years to come and much to his delight even the Duchess of Cambridge went out her way to please him by wearing a spectacular red dress. The president is clearly on a mission to expand China’s domination of the UK and in advancing his designs he simply repeated the Chinese proverb:

an opportunity missed is an opportunity lost.

Other politicians made more aggravated attacks at the Chinese president. It seems pointless to repeat them and although I do not support the Chinese Communist Party  I would like to thank Chinese engineers for delivering key energy related infrastructure in Pakistan in spite of the risks they face from terrorists.

Unlike the western powers which have only created the problem of jihad for Pakistan and China by nurturing the Taliban under the government of former prime minister Benazir Bhutto, despite all the dangers they are exposed to in a country bubbling with militancy, Chinese engineers courageously continue to put their lives at risk for the sake improving things for the poor in underdeveloped parts of Pakistan.

When pilloried by the BBC for being the head of an undemocratic, opaque and cruel state, president Xi quite dubiously said that China respects human rights and David Cameron took his new friend’s dodginess even further by saying that he is on a twin mission for China to invest billions in the UK and simultaneously also improve its human rights record with Downing Street’s help and guidance. President Xi indulged in cultural relativism and defended China’s troubling human rights record by arguing that his country had produced “a path of human rights suitable for Chinese conditions”. Understandably, Cameron is under attack for letting China buy the UK’s silence in relation to human rights atrocities in Tibet.

However, Cameron is keen to avoid confrontation with Beijing and wants to erase the memories of his meeting with the Dalai Lama in 2012, a cock-up after which he had to rush off on a visit to Beijing in 2013 in order to mend fences with angry Communist Party bosses. It is said that, back then, president Xi awkwardly received Cameron for dinner and the British ambassador advised the prime minister that “on a fuck you scale of one to 10 it was about a four”.

Her Majesty was acutely aware that it was a critical moment in the bilateral relations between the two countries and that Chinese investors are set to provide a third of the money to fund the UK’s nuclear reactor in Hinkley Point C; termed the “flagship project of cooperation” by president Xi. Possessing much superior diplomatic skills in comparison to the vain, pompous and incompetent politicians who surround her, the Queen also encouraged cultural relativism and Her Majesty applauded China’s “visionary concept of One Country Two Systems” as propounded by the former Chinese leader Deng Xiaoping whose open-ended economic policies exposed China to capitalism. Deng Xiaoping thought that socialism does not mean shared poverty and envisioned China as a socialist market economy; for such radical thoughts he was, of course, victimised by Chairman Mao during the Cultural Revolution.

The visit promises other cooperation between the UK and China and apparently measures are being taken to ease visa restrictions on Chinese nationals. With 185,000 Chinese visitors in 2014, the number of tourists have more than doubled since 2009 (89,000 visitors) and it is expected that from January 2017 the fee for a multiple entry two-year visit visa will be slashed from £324 to £85 and that enrolment facilities for biometrics will be expanded from nine Chinese cities to 50.

On average, Chinese tourists spend a total of half a billion pounds annually or £2,688 each per trip while visiting in the UK. Overall, visit visas to Chinese nationals have almost trebled over the last 5 years from 115,000 in 2009 to 336,000 in 2014, with spending increased by 326%.

Furthermore, a 10-year visit visa with unlimited entry rights for regular Chinese visitors is also under consideration and 10 Downing Street has (rather dubiously) said that:

This means we will have the best offer in Europe in terms of visas. We are prioritising China because of the huge potential we think it has.

It is said that the changes put the UK on a par with the US 2014 offer and new visitor visas for Chinese tourists will be valid in the UK for 2 years – 4 times the usual 6-month limit for a standard visitor visa.

Pro-China sentiment surpassed the chants of pro-democracy activists on the streets of London on the first day of president Xi’s visit and it is suspected that the paraphernalia used by the crowds that have greeted him was especially shipped from China for the occasion and the red banner reception that he received was stage-managed.

It is feared that the Hinkley nuclear reactor may turn out to be a bad deal like the poor value for taxpayer money symbolised by the Tier 1 (Investor) visas under which British taxpayers are being milked by corrupt ultra rich foreign elites. Because of the deep ideological rivalry with Chinese communists, the Brits are quite afraid that things may go awry and their future partners in China’s state-run CGN nuclear energy company might end up betraying them. Yet the government insists that 25,000 jobs will be created by the deal and that six million homes will be supplied energy. Critics of the deal between EDF and CGN say that it will cost twice as much as what it presently costs to produce one unit of electricity and they are also concerned that the Chinese might switch off the UK’s nuclear power during wartime in order to get even for all the terrible things the British empire did in the past. But Cameron and Osborne are not daunted by such predictions and construction of the UK’s first nuclear power plant in a generation is set to begin “within weeks”; the prime minister described the deal as “historic” and China could be allowed permission to build its own nuclear reactor in Bradwell (Essex) as early as 2022 in exchange for its £6 billion stake in the Hinkley project in Somerset lead by the powerful French state energy company EDF.

In relation to the useless golden visas for investors under Tier 1 of the points-based system (PBS), a clearly agitated Professor David Metcalf explained to the Home Affairs Select Committee that the motive behind the scheme was for the UK to benefit but instead:

We are giving settlement away. We are paying the Russians and the Chinese to come here. We are paying interest on the gilts, and when they get their citizenship, we give them the money back, so British residents are paying them to come here. My own view is the system is absolutely not fit for purpose.

Investors can use golden visas to invest £2 million or more in UK government bonds, share capital or loan capital in active and trading UK registered companies. They may work or study and are normally able to apply to settle after 5 years. However, if they invest £10 million, they are able to apply to settle after 2 years. And if they invest £5 million, they can apply to settle after 3 years.

In its report entitled Gold rush: Investment visas and corrupt capital flows into the UK
Transparency International is adamant that UK investor visas are being used as a tool to launder the proceeds of corruption from around the world and:

In particular, it is highly likely that substantial amounts of corrupt wealth stolen from China and Russia have been laundered into the UK through the UK’s ‘golden’ visa programme.

In return for £2 million of qualifying investments, a foreign investor can receive a UK golden visa and, after five years, permanent residency in the UK. Our analysis shows that, out of 3,048 golden visas granted by the UK since the scheme began in 2008, 60% have been awarded to Chinese and Russian nationals.

The immigration minister James Brokenshire (who only recently vowed to attack wrongdoing “from all angles”) and Sarah Rapson the director general of UK Visas and Immigration also gave evidence to the Home Affairs Select Committee. Brokenshire claimed that the home office had enhanced the robustness of Tier 1 investor visas by precluding the use of loans to qualify for the scheme and imposing mandatory requirements in relation to using UK bank accounts. But given how utterly corrupt global predatory banks such as HSBC, Barclays, RBS and Deutsche Bank etc are it is hard to see what difference the requirement could possibly make. Unlike some other European countries, the UK does not allow the £2 million to be invested in property and it is not possible to use assets or possessions such as property as evidence of funds for investment. But no mechanism exists to preclude Tier 1 investors investing in gilts or shares from snapping up further property in the UK and reselling it at a profit.

Sarah Rapson made interesting comments, about the use of local knowledge in the student visa process in India, which seem to have pleased some members of the Home Affairs Select Committee. But MPs were unimpressed with the fact that a Tier 2 sponsorship licence application that would fail today may well succeed tomorrow.

Clarification was also sought about why a formal internal appeals process does not exist in such cases and the committee also questioned the efficacy of the system given the fact that expensive judicial review is the only real way to seek relief in cases involving refused Tier 2 applications. MPs noted that the practice was totally at odds with the fact that the stated aim of the PBS was to simplify things whereas judicial review proceedings expose the home office to costs liability and negative publicity.

About Asad Ali Khan, BA, MSc, MA, LL.B (Hons), LL.M

Senior Partner, Khan & Co, Barristers-at-Law
This entry was posted in China, Citizenship and Nationality, Immigration Rules, Judicial Review, MAC, Pakistan, PBS, Settlement, Tier 1 and tagged , , , . Bookmark the permalink.

2 Responses to Tier 1 Investor Visas ‘Not Fit For Purpose’

  1. mkp says:


    The person running EDF’s Hinkley nuclear power project in Somerset has resigned.

    A Christopher “Chris” Bakken III, EDF’s Project Director for Hinkley Point, left the company to take up a new job in the US.

    The news comes amid claims the energy company’s board recently failed to proceed with a final investment decision for the nuclear project.

    EDF said Mr Bakken had been a “key leader” and played an important part in the turnaround of the Nuclear Generation business.

    “In this capacity, he played a major role in the development of the [Hinkley Point] Project, in particular to make sure the project is ready for FID [Final Investment Decision] and set up to succeed,” it added.

    Philippe Bordarier, Chief Nuclear Officer at EDF Energy Generation, who has been with the energy firm for two years, will take over the role.

    EDF stated: “He has brought many valuable skills and experiences with him and been at the heart of the successful relationship and business delivery between the French and UK nuclear operating fleets. These leadership and stakeholder engagement strengths are particularly critical for the next phase of the HPC.”

    CEO Vincent de Rivaz added he is “absolutely confident that Hinkley Point C will be reaching a final investment decision soon”.

    Last month DECC granted consent for a new connection for the Hinkley C nuclear power station. The government has pledged £2 billion of initial support for the project.

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