Lords propose closure of the Tier 1 (Investor) visa
Baroness Hamwee and Lord Paddick (Liberal Democrat) have tabled an amendment to the 2015 Immigration Bill proposing the abolition of the Tier 1 (Investor) visa.
Their proposal would see the route closed both to new applicants and those switching their visas to the Tier 1 (Investor) route in the UK from 1 January 2017.
It is not clear what has prompted this proposal. It may be that there are continuing doubts around the economic benefit of the route to the UK and speculative concerns around whether the investor visa is being used by criminals (see Transparency International UK’s report – Gold Rush: Investment visas and corrupt capital flows into the UK).
Why this proposal is being tabled now is also unclear. 2015 saw a tiny number of investors applying to come to the UK down from around 1,172 in 2014, to around 200 last year. In addition, historical concerns about how the route could be used by those whose wealth was dubious have largely been addressed by a 2015 immigration rule change, which now requires extensive due diligence to be undertaken on the source and origin of funds by UK banks (as having a UK investment account is a precondition). This source of funds and wealth information is now often being requested as part of the visa application, both in relation to the Investor themselves and any third parties who have made the funds available.
What is clear is that the popularity if the Tier 1 Investor route has been badly affected by the increase in the minimum investment from £1 million to £2million in November 2014 and geopolitical and economic factors affecting the two main source countries for these visas, China and Russia.
There are clearly now enough safeguards in place to ensure the integrity of the Tier 1 (Investor) route. Contrary to popular belief, the Investor route is not a “passports for sale” visa – it requires an extended period of residence with significant presence before someone can obtain permanent residence in the UK and only a year later would they become eligible for British Citizenship, subject to security and character checks.
What the UK now needs to do, rather than closing the route, is to think about how to attract a greater number of investors and to put their investments to work in the UK economy and in wider UK society.