David Cameron has slammed the brakes on government plans to demand a £3,000 migrant bond from “high risk” overseas visitors after news of the policy provoked uproar in Delhi and threatened his attempt to boost trade links with India.
The prime minister’s allies said Mr Cameron had “not signed off” details of the policy – trailed in Sunday newspapers – while Lib Dem and Tory business ministers warned that the idea would be damaging to Britain’s economic interests.
Mr Cameron has told Theresa May, home secretary, that he will not sanction any policy that undermines his growth agenda or the “open for business” message he delivered on a recent trip to India.
“The prime minister has not cleared this policy,” said one ally. “He doesn’t want to do anything that cuts across the message he took to India.”
Although Downing St said pilot studies involving the use of migrant bonds – or deposits – for some visitors would go ahead, neither Mr Cameron nor Nick Clegg, his Lib Dem deputy, have agreed the scope of the scheme or the size of the bonds.
Mr Cameron is especially keen that the pilot study targets “high risk” individuals and is not seen as being aimed at any particular country.
Ms May wanted the trial of a £3,000 bond to begin in November, levied on short-term visitors from India, Pakistan, Sri Lanka, Bangladesh, Nigeria and Ghana.
Vince Cable, Lib Dem business secretary, has expressed concerns about the proposal and his anxiety is shared by David Willetts, Tory science minister. Mr Cable raised the issue in cabinet on Tuesday, saying he was concerned the home office was misrepresenting the pilots as a way of bringing down net migration.
The Home Office said on Tuesday the November pilot would be “highly selective”, focusing only on those visitors from India and other countries thought to present a “residual risk” of overstaying. “Any pilot will not apply to all visitors from the selected countries and the vast majority of visitors will not need to pay a bond,” a spokeswoman said.
It is understood those who have already visited the UK would not be subject to the levy.
“It is certainly a stupid move, but it is also extremely bad public diplomacy”
“It is certainly a stupid move, but it is also extremely bad public diplomacy”
- Brahma Chellaney, New Delhi-based strategic affairs analyst
However, tour operators were dismayed at the introduction of any type of deposit system and complained they had not been consulted.
“This doesn’t exactly garland the welcome message we are extending to India and other countries,” said Tom Jenkins, chief executive of the European Tour Operators Association. “This really seems disproportionate to the threat. It feels the inbound market is being sacrificed to a domestic political agenda.”
Mary Rance, chief executive of trade body UKinbound, said: “It would be a very incongruous step to take at this time, when we are in open dialogue about trying to improve the process \[for visitors]. It should be easier rather than \[more] difficult for visitors.”
The proposals have been badly received in India’s business community, with executives used to travelling freely to London echoing the vociferous complaints of the nation’s leading trade bodies.
“In simple terms, it’s madness,” said Tarun Kataria, Mumbai-based chief executive of investment bank Religare Capital India. “It would create endless degrees of uncertainty, and such a large sum of money is bound to have an impact on the number of people going to Britain from India.”
The move led to demands on Tuesday for a tit-for-tat response from India’s government, including an article on FirstPost, a widely read news site, headlined “Why India must retaliate against UK £3,000 visa bond” and editorials in leading newspapers calling for a rethink.
Security analysts said the move was likely to undermine Mr Cameron’s attempts to deepen the UK’s bilateral relationship with Asia’s third-largest economy.
“It is certainly a stupid move, but it is also extremely bad public diplomacy. It will raise a hue and cry here,” says Brahma Chellaney, a strategic affairs analyst at New Delhi’s Centre for Policy Research think tank.
“It really just doesn’t make any sense. It will have detrimental effect on the UK-India relationship, and it will create a bad image for the UK in India, and also uproar elsewhere in the world.”
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