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Tim Gocher runs a private equity firm, and teaches Sustainable Business at the University of Nottingham and London Business School. He is a Conservative activist.

At the press conference with Donald Trump, Theresa May proclaimed our proud immigration history for those who “want to contribute to our economy and society.” Fine words. But our recent history is far from proud.

Having lived and worked in many non-EU countries, with a non-EU wife, I’ve seen the UK immigration system from the other side. It’s ideal – for those prepared to defraud it. The only flaw is that it doesn’t work for job-creating entrepreneurs, high-skilled workers, high-paying students, doctors, nurses and many more. Having proactively terrified one valuable immigrant population, the Windrush “celebrations” were tokenistic and insulting. We must now enact wholesale immigration reform in order to stop alienating the most talented visa applicants.

Here, I explain how the “hostile environment” is implemented, how easy it is to fiddle, and how to fix it.

Loss of control

In 2005, the Home Office outsourced the frontline of visa applications to a private company, VFS. They now manage UK visa applications in 77 countries. Few applicants meet a UK government employee. This threatens our security and ability to understand an application’s context.

Instead, we rely on a bewildering array of paperwork, filtered by low-paid VFS clerks, with decisions made in the UK. Many submissions run to over 100 pages with supporting documents. The unfortunate truth is that many applicants come from countries suffering corruption, rendering local documents unreliable. These are often the same countries with the highest growth in technology skills, entrepreneurs, doctors, nurses and wealth. Decisions feel arbitrary.

I’ve met the CFO of a high-growth tech firm whose visa was rejected three times as he tried to establish a UK head-office for his company, which employs thousands. Student applicants, already accepted by leading UK universities and paying far more that EU students, spend months gathering largely irrelevant paperwork. These higher fees fund our research and facilities.

All this causes pain and uncertainty to applicants, UK businesses and our public services, and unnecessary damage to our reputation abroad. India and other allies are furious. In 2011, the Home Office put further restrictions on student visas, resulting in a 50 per cent drop in Indian applicants to our universities. They’ve gone elsewhere. Researchers at UCL say Australia has pushed the UK into third place for overseas students – students that add £20 billion to our economy. Canada is fast catching up. This year, Narendra Modi refused to sign an Memorandum of Understanding to return illegal immigrants, with the Indian High Commission stating that the UK hadn’t eased visa policies as promised and are still “cancelling visas on small pretexts.” Good luck getting that post-Brexit Indian trade deal.

Yet I’ve also heard those with less of a reputation to lose bragging about their UK visa acquired on the back of fraudulently acquired documents. A Deputy Ambassador at a German Embassy outside the EU told me that well-trained German government employees meet every applicant, even for tourist visas, and can tell within five minutes whether an applicant is fraudulent, regardless of the documentation.

Loss of income

The second problem is visa costs – not how much they cost, but how little goes to the Treasury. VFS effectively holds a natural monopoly and, with the Home Office, has steadily increased complexity and paperwork to justify eye-watering visa fee increases.

They have at least done us a favour by proving the high value which people attach to UK visas. A technology expert (tier 2) on the “shortage occupations list” pays a visa fee of £1,200 plus a healthcare surcharge of £200 per year. But that’s just the beginning. Due to paperwork complexity, an entire visa consulting industry has sprung up, clustering around VFS offices in non-EU countries. They tell you exactly how to write your application and which documents will trigger acceptance or rejection. They exist to game the system. With their costs and other charges, and a UK immigration lawyer, the total can easily top £4,000. If the application is rejected for any reason, they (or the UK company/NHS paying the bill) get nothing back. “Shortage occupation” visas have a monthly cap, leading to thousands being rejected recently.

The only money received by the Treasury is the health surcharge and a fraction of the visa fee. We don’t know that fraction. VFS doesn’t report its UK visa accounts separately and isn’t a UK company – it’s Swiss. We’re not alone. VFS is now operating for many other countries. But we don’t need to follow the herd over the cliff.

The hostile environment laid bare

Talking to these visa consultants is revealing. They are the first to say that the Home Office uses its distance from applicants to treat them as numbers, and that the most irrelevant missing paper will justify rejection (not questions – full rejections).

This mess is not an intended policy outcome – it has metastasised as a consequence of an arbitrary net migration target, outsourcing our interface with applicants, restricting student visas and capping visas for those we need the most. But it seems to have become a tool to reduce immigration numbers through painful attrition out of site of the UK electorate. This is the “hostile environment” at work.

Sajid Javid has made a good start, relaxing caps for doctors and nurses that saw 2,360 visas for NHS doctors rejected in five months, while almost 10,000 doctors’ posts remained unfilled. But thousands of other high-skilled workers are still rejected due to caps.

How to fix it?

First, we need to take back control of the application interface and ditch VFS.

Second, we must treat applicants as potential customers, rather than pesky threats to the immigration target. The private sector is just as adept as defining unwanted customers as wanted ones. Often this is done through pricing. Thanks to high visa application costs, we know we can set the bar high rather than relying on potentially fraudulent documents to prove wealth. If a certain visa is valued at £4,000, why don’t we streamline the paperwork, negate the middlemen, charge that much and use it to fund public services?

One stressed graduate student applicant gave me a solution. “My grandfather is paying my university and living costs. It’s taken four months to gather, translate and notarise paperwork proving our relationship and the income of three generations. Can’t they just ask us to pay upfront?” Good point. For some visas, Malaysia proves wealth by requiring a level of savings to be transferred to a fixed deposit which can be used by the government should visa conditions be broken (e.g. in the case of unpaid health bills or crime).

With EU net migration plummeting since the Brexit referendum, we need a non-EU immigration system that works for our economy and people. But regardless, Windrush should be enough of a lesson to build a fair and functional system.

149 comments for: Tim Gocher: The hostile environment costs us dearly – Britain would profit from a more reasonable approach

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