With a Border Agency in turmoil, Michael Binyon considers an urgent review of Britain’s Visa Policy to prevent it losing millions in foreign business

Britain is losing millions of pounds a year in lost business, student fees and tourist income because of new restrictions imposed on visas for citizens from key emerging markets.

India, Turkey and Russia, among other nations, have all repeatedly complained that obtaining a British visa is now so time-consuming, costly and fraught with bureaucratic obstacles that potential investors are discouraged from doing business in Britain. Foreign businessmen say that a British visa is now more difficult to get than a Schengen visa, which allows them to travel freely in most of continental Europe, and is often harder to obtain than one for the United States.

In Britain, employers and researchers say they are being hit by blocks and delays on visas for key workers recruited overseas, while universities and colleges fear they are losing out to competitors abroad in attracting high-paying overseas students. Shows, exhibitions and musical events across the country have had to be cancelled at short notice because key performers were unable to obtain permission to visit Britain in time.

The British Council has called for an ‘urgent review’ of Britain’s visa policy, saying that the new restrictions are causing huge damage to British higher education and driving away foreign students. The Council says that Britain now has ‘the toughest immigration regime compared to its competitors.’ A recent comparison with Australia and the US found that both had relaxed stricter visa criteria after suffering falls in overseas student applications.

Aggravating the growing frustration of employers and colleges has been the new rule forbidding any British diplomats from intervening to help ask for a visa refusal to be reconsidered by entry clearance officers. Responsibility has been transferred soley to the UK Border Agency, itself in turmoil after the publicised failures to enforce proper border controls. Agency officials have little local knowledge of key emerging markets. Diplomats say the change has made it impossible for embassies to support visa applications by those whose visits are diplomatically important.

‘It’s been a disaster,’ one retired British ambassador said. ‘As diplomats we’re not allowed to do anything now to sort out difficulties on the spot. Ten years ago I could say that most applicants could be assured of a visa within a day. Now the queues are growing again. People can wait for days.’

The new rules have caused fury in key markets such as India, a country targeted by David Cameron in his bid to boost British trade overseas. The difficulty and cost of getting a British visa was cited as one reason why India recently chose to place a lucrative defence contract for new fighter aircraft with the French company Dassault, rather than with Britain. The Hinduja brothers also said a prohibitive visa regime was driving away potential Indian investors from Britain.

Other key markets have also expressed exasperation. Egemen Bagis, the main Turkish EU negotiator, on a recent visit to London denounced the refusal of the EU to ease visa requirements for Turks, citing Britain as a particularly difficult destination. A few years ago Cem Mansur, one of Turkey’s leading musical conductors who studied in London and has a house there, was outraged to find that on his latest application he and his wife were granted visitor visas but his one-year-old child was refused entry.

British officials say the new restrictions are necessary because many visitors attempt to remain in Britain illegally. The National Audit Office estimates that 50,000 non-EU migrants came to Britain in 2009 while claiming to be studying. It says that almost 160,000 overseas people, including students, are in the country illegally and should be removed.

Diplomats admit that the restrictions are causing resentment and ill-will, but say they are powerless to intervene. Exacerbating the resentment is the outsourcing since 2007 of visa processing to private companies, as happens now in 48 countries, including India and Russia where there are large numbers applying to visit Britain.

The Government says this cuts costs and the number of British consular staff needed overseas. But private, locally-engaged companies have no leeway, simply collecting the fee and forwarding the information to the UK Border Agency. Applicants can no longer argue their case in person to a consular official. They say exceptional cases are routinely refused if they do not fit the visa processing company’s guidelines.

The cutbacks have also hurt applicants from countries where embassies no longer deal with visas. Iraqis have to go to Jordan or Istanbul (more than 700 miles away) to apply for British visas, and in some African countries applicants have to travel hundreds of miles to visit in person the nearest British embassy empowered to deal with visas, often in another country.

 As a result, artists, musicians, academics and those invited to conferences in Britain often miss their performances or are unable to keep engagements. The British Council has lobbied hard for flexibility, but with little success. ‘We had at least 50 students turned down last year,’ said a retired diplomat now heading the academic council. ‘Surely there ought to be a better method of screening so that bona fide students are not prevented from coming here.’

The Council has also said the extremely high cost of student visas – running into hundreds of pounds, as Britain insists on recouping as much of the processing costs as possible – is forcing students to consider studying in America or other countries where visa costs are lower. British education exports were worth £14.1 billion in 2008-09. Over 40 per cent of international students in British higher education came via sub-degree courses – the level targeted by government curbs on visas to prevent bogus student applications.

The government has admitted problems with the operation of the visa regime and has promised to improve the system. But in some cases, denying visas is part of a sanctions regime – in countries such as Syria or Zimbabwe. And in one key market, Russia, this has led to a mutual standoff that is hurting bilateral trade and tourism. Visa restrictions on Russians were increased five years ago in the wake of the killing of Alexander Litvinenko, an exile poisoned in London. Russian government officials have been refused entry to Britain or given visas that end as soon as their official business is over. Last year a deputy finance minister, whose son was attending a language school in Britain, was not allowed to stay an extra day at the end of a banking conference to see him.

In retaliation, Russia has made it harder and costlier for Britons to obtain visas to Russia. Britain is one of only four countries whose citizens have to complete a four-page application form. Twice as long as forms for any other west European country, the questionnaire asks details of every foreign visit made in the past 10 years, a list of all colleges attended, including courses, telephone numbers and subjects studied, as well as complete previous employment record with the names of work superiors.

The Russian Foreign Ministry openly admits that this is a tit-for-tat measure. ‘We are obliged to be extremely rigorous because of the inflexibility shown by Britain to Russians,’ a Foreign Ministry official in Moscow told The Times.

The effect, however, is to hinder trade and investment. At a reception last summer hosted by the British Consulate at the St Petersburg International Economic Forum, a businessman told The Times: ‘I had been thinking of investing in Britain. But I will now look to France or Germany instead, as it’s becoming impossible to be sure that I can get a visa for Britain or how long it will take.’

Britain recently resumed contacts with the Russian security authorities, broken after the Litvinenko affair, but has done nothing to liberalise visas – although this was the main request made to Mr Cameron during the Prime Minister’s visit to Moscow in September 2011. Before he arrived, a British diplomat privately confided that Britain would go slow on the issue ‘because it is the only leverage we have over the Russians.’