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Last Updated: Friday, 18 January 2008, 11:38 GMT
English test call for 'fat cats'
Man writing cheque
Cash must be invested within three months, the government says
The Lib Dems have attacked the government for waiving English language tests for "fat cat" foreign investors.

Under a new system, everyone coming to work in the UK from outside the EU will have to learn English.

But potential investors with 1m or more in the bank can stay for three years without learning the language.

Ministers say they do not want to deter investment but Lib Dem peer Lord Oakeshott said it was "one law for the rich and another for everyone else".

"How very New Labour to do a favour for foreign fat cats who can't even say 'good morning' at passport control," said the Lib Dem peer.

Strict controls

He said the move, which comes into effect later this year, would "open the door to dodgy foreign businessmen" and he questioned the government's claim it would encourage investment.

If they wish to make the UK their permanent home, they will have to pass an English language test like everyone else
Home Office spokesman

"If you can not speak a word of English, how can you invest it productively?," Lord Oakeshott told BBC News.

But a Home Office spokesman said there would be strict controls to ensure wealthy migrants had the money they claimed - and that it was subsequently invested in British business.

He said they would have to hold 1m or more in the bank or have 2m worth of assets to avoid the English test.

The cash can be loaned to them - provided it comes from a bank or other financial institution regulated by the Financial Services Authority.

Within three months of arriving the country, foreign investors must spend 750,000 on government bonds, shares or loans to UK companies - apart from property investment firms, the spokesman said.

Investors would be able to stay in the UK for three years without having to sit an English test and may be able to apply for an extension beyond that.

But the spokesman added: "If they wish to make the UK their permanent home, they will have to pass an English language test like everyone else."

Sports stars

Challenged on the plan during an appearance before the Lords Economic Affairs Committee, immigration minister Liam Byrne said the government was keen to encourage foreign investors.

He said: "What we don't want to do is cut off the opportunity of bringing in large amounts of capital that are going to be invested in productive things.

"You have got to apply a balance and I think that the number of investors that we would foresee coming in would actually be quite small."

Mr Byrne also stressed foreign sports stars will also have to pass an English test to the equivalent of GCSE Grade C, in line with other migrants not coming to the UK as investors.

"Should we be insisting that all footballers - or indeed England managers - should be able to pass an English test before they come in?," said the immigration minister.

"At the moment I am afraid our proposal is that they should."

New England manager Fabio Capello is currently taking a crash course in English - but he will not have to sit a test as he is a citizen of an EU country.



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