Budget impact of pre #97 Gurkha Settlement

Dear Mr Raven

Your correspondence dated 20 July 2010 has been considered to be a
request for information in accordance with the Freedom of Information Act
2000.  You requested the following information:

On 29 April 2009 Phil Woolas stated that the cost of giving pre '97
Gurkhas settlement rights (estimated at the time as £1.4 billion per
year) would come from the defence budget.  Please can you confirm the
amount of your budget spent on pre '97 Gurkhas since May 2009 and the
number of former Gurkhas and the number of family member that this
involves? 

Although the Ministry of Defence has taken the lead in the work across
government to prepare for the anticipated increase in immigration from
those Gurkhas who retired from the Brigade of Gurkhas before 1 July 1997,
the costs associated with settlement do not, for the most part, fall to
the defence budget.  The principle applied for these costs is that they
are borne by each government department with responsibility for the
particular benefit, credit or service to which the ex-Gurkhas and their
families are entitled.

You make reference to a statement by Phil Woolas MP to the effect that the
estimated cost of giving settlement rights of £1.4 billion would fall to
the defence budget.  In fact, during the debate held on 29 April 2009
(Official Report, Column 988), Mr Woolas made the following statement:

"The hon. Member for Eastleigh asked about costs.  I answered his point
before, but I am not aware that I used the £1.5 billion figure.  The
£1.4 billion figure is our best guesstimate, but I must tell the House
that that is an annual figure that will not apply forever.  If, as a
result of decisions for Gurkhas, the policy to be adopted by the
Government and accepted by the House were to allow settlement rights for
Commonwealth soldiers and former soldiers that went beyond those currently
available, there would be implications. In our view, we believe that in
total they would run into billions of pounds."

The figure of £1.4 billion was the result of cross Government
consultation on the potential financial cost to the UK of allowing all
former Gurkhas to settle here.  It covered pension benefits, tax credits,
child benefit costs, NHS costs and education costs.  None of these costs
are covered by the defence budget.

During the debate Mr Woolas also referred to the campaign to make
retrospective pension arrangements for those Gurkhas who retired before 1
July 1997:

"Indeed, I think that I am right to say that the Ministry of Defence
pension is a pay-as-you-go pension. An additional cost to it would have to
be met from defence budgets."

This is an entirely separate matter from the cost of any increase in
immigration following the change in the immigration rules.  The cost of
providing retired Gurkhas with Armed Forces Pension Scheme (AFPS)
equivalent pension benefits for all pensionable service before 1 July 1997
has been estimated at £1.5 billion over 20 years. 

One area of expenditure that does fall to the defence budget is the cost
of setting up and running an office in Kathmandu in order to provide free
help and advice with completing the visa application form, obtaining the
necessary supporting documents and generally helping ex-Gurkhas to make an
informed choice about whether life in the UK is for them.  The cost of
setting up and staffing the Settlement Office amounted to £20,000 in
financial year 2009/2010 and a similar budget has been earmarked for the
current year.  The office has dealt with almost 10,000 visits since
opening in October 2009.

The Ministry of Defence is not involved in processing visa applications
from ex-Gurkhas and their families.  You would need to contact the UK
Border Agency for details of the number of overall successful settlement
applications submitted to them.  However, I understand that they do not
monitor if or when someone chooses to use their visa and would be unable
to tell you how many successful applicants had subsequently moved to the
UK to settle.  If you wish to pursue this further you should contact the
UK Border Agency at: 
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Yours sincerely

Jonathan Sanderson

Jonathan Sanderson| LF Sec SO2 Sec (F&C)a| Land Forces Secretariat
(Foreign & Commonwealth)

IDL 24 |Headquarters Land Forces| Blenheim Building| Floor 2| Marlborough
Lines| ANDOVER, Hampshire| SP11 8HJ

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