Anger over UK residencies being sold for £1m

The Government is facing fierce criticism over its failure to stop foreign entrepreneurs from buying residence in Britain for £1m. When the Tories introduced the immigration rule in 1994, Labour promised to abolish it if it came into power.

The Government is facing fierce criticism over its failure to stop foreign entrepreneurs from buying residence in Britain for £1m. When the Tories introduced the immigration rule in 1994, Labour promised to abolish it if it came into power.

Now, Simon Hughes, the Liberal Democrat home affairs spokesman, has demanded to know why the Government has cut benefits to asylum-seekers while giving foreign investors the right to residence here in exchange for cash.

The rules introduced a new "investor" category for non-EU citizens who want to make a permanent home in Britain. They do not affect the Conservative treasurer, Michael Ashcroft, because he holds a UK passport.

Under the change, anyone wishing to live in Britain can gain entry if they can show they will bring at least £1m with them and will invest no less than £750,000 of it in UK government bonds or an active, trading UK company. The only restriction is that the money cannot be invested in a property company.

After four years, if they can show they have made the UK their main home and neither they nor their dependents have had recourse to public funds or to working as an employee, they are granted the right to remain here permanently.

At Labour's 1994 conference, Gordon Brown, who was then the shadow Chancellor, said the rules would be abolished. "I'm serving notice on the Tory party's friends in far-off places. No more come and go as you please, pay as you like residency rules," he said.

Labour's immigration spokesman, Graham Allen, also objected strongly to the rules when they were announced in 1994 by Michael Howard, who was Home Secretary. "It seems that if you have the cash you can buy your way into Britain," he said. "Rules governing entry to the UK should be applied fairly and without discrimination regarding race, sex, colour or financial status... Under these arrangements if you are a millionaire you will get in. If you are an ordinary person, a husband trying to reunite with his wife, for instance, it is a lot tougher."

The Home Office said the numbers taking up the offer had been small, with 10 people applying in 1995, 30 in 1996 and 20 in each year since. The £1m bought entry for 12 months, a spokeswoman said, after which the applicant could ask for a further three years before applying for permanent residency.

Mr Hughes said he planned to table a series of parliamentary questions, asking whether the Government had any plan to reform the rules. "It is wrong that the wealthy may find it easier to obtain UK residency rights than many ordinary people find it just to get permission to visit relatives and friends here," Mr Hughes said. "This is definitely a case of one rule for the very wealthy and very different rules for everyone else."