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Mr. McNulty: I appreciate that it is early days in the application process, but what the hon. Lady has just said is entirely wrong. Early signs are that international student applications in this country are up 5 per cent., not that they are appreciably down or that there is a trend downwards. That is simply a matter of fact from Universities UK.

1 pm

Mrs. Gillan: The Minister needs to consider this in relative terms. Although he believes that applications are up 5 per cent., I suggest that he look at the Organisation for Economic Co-operation and Development's report on the UK's market share in international student recruitment, which shows that the number is down by 3 per cent., although I agree that that covers the period since 1999. Acceptances for international undergraduates through the Universities and Colleges Admissions Service from key markets are also down this year in certain areas—by 22.5 per cent. for China, by 18.6 per cent. for Singapore, and by 7.9 per cent. for Malaysia. Those statistics have been provided by Universities UK.
 
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Some 40 per cent. of vice-chancellors who responded to a Universities UK survey in December last year reported that they had seen a fall or no increase in the number of international student enrolments in the last academic year, and 50 per cent. said that they had missed their targets for international student recruitment. According to a snapshot survey by Universities UK, many institutions report a decline in international student enrolments for entry in 2005 compared with 2004. That decline inevitably means heavy financial losses for institutions—some universities report expected losses of between £1 million and £3 million this year.

UK Visas reports a decline in student visa applications in a number of key posts, including Beijing, Islamabad, Hong Kong, Kuala Lumpur and Chennai. In Beijing, student visa applications are down by 38 per cent. and in Islamabad by about 37 per cent. In the further education sector, colleges report decreases of 20 per cent. in their income from international fees. I find it hard to understand where the Minister's information about an increase in applications comes from when the evidence that Universities UK has put before me shows quite a different position.

At the same time, for example, the USA has had an increase in student applications during 2005, and is issuing about 15 per cent. more student visas this year compared with previous years, encouraged by a US Government campaign in China to attract international students to US institutions. I am informed that US visa officers have been advised to concentrate on the intention or ability to study, rather than on the intention to leave on completion of the course. Visa officers concentrated previously on the intention to leave and often had doubts about applicants' intentions to leave, and therefore refused more applications.

Australia has been running an electronic visa application system in China for several months, and it is proving popular with international students owing to its efficiency and speed. It appears that electronic applications for UK visas in countries such as China are still several years away.

All those indicators certainly show that we are not doing our best to encourage international students to study in this country. Certainly, in the context of increasing global competition and given the evidence that the market may be suffering, the Government should not press ahead with these potentially damaging measures. Although the downturn cannot be attributed to a single factor—I am being fair—visa changes are still the most commonly cited reason for recruitment difficulties this year.

It is always good on Report to go back to read what was said in Committee. Once again, the Minister has certainly admitted that attention needs to be given to illegal overstaying as a result of a leave to remain refusal being communicated after the original leave has expired. That is very welcome. However, he has not addressed concerns about the fact that the appeal against removal will not be exercisable in the UK. He has not adequately explained why he thinks it acceptable that students who find that they need to stay for an extra couple of weeks—for example, to attend graduation ceremonies—must return to their home countries to appeal against a
 
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decision to remove them from the UK, when it is absolutely clear that, in many cases that relate to students, that will result in the individuals missing the occasion for which they require leave to remain in the UK.

Simon Hughes (North Southwark and Bermondsey) (LD): Entirely in support of that proposition, may I tell the hon. Lady something that is not theory, but a real experience that many hon. Members have had to deal with for their own constituents and others? I know of someone from Latin America who did a masters degree for a year, finished in the summer and graduated in December, but was required to go back with all the additional expense entailed. In the meantime they were being encouraged to apply for both jobs and further academic opportunities, but they could not do that if they were not in this country, so their whole career was put in jeopardy because of the imposition of that requirement.

Mrs. Gillan: I am grateful to the hon. Gentleman for giving that example because it certainly puts the flesh on the bones of the points that I am making and that other hon. Members will make when they speak to this group of amendments. It is sad to think that someone's career can be blighted by archaic rules practised in this country, when it would be easy for the Minister to make exceptions in such cases and dispense with the anomalies that we are pointing out.

Simon Hughes: A further anomaly is produced—the Minister is alert to this and I hope that he will be sympathetic—when those people have to return. An integrity issue then arises: what do they say is the purpose of coming back? The purpose is to graduate, but are they seeking to come as a visitor, a student or to continue the job applications? So someone who has been entirely open and honest and has contributed to the British economy and society and wants to contribute further may be caught out completely inadvertently because they are in a no person's land when they come back.

Mrs. Gillan: Again, I am grateful to the hon. Gentleman for making that point. I have been trying to outline exactly that Catch-22 situation, which is something that the Government need to take seriously, as Opposition Members have done.

Universities UK and the other organisations in the education and immigration sectors firmly oppose the scheme that the Government propose in the Bill. I was disappointed that the Minister was not willing to accept the amendments that I moved in Committee. Unfortunately, these amendments are more narrowly focused on preserving appeals only for international students. Since the Minister repeatedly emphasised in Committee that he understood the education sector's concerns, we hope that he will now reconsider at least some of these proposals. I should like him to tell us whether he has had any representation from the Department for Education and Skills about how it feels about the provisions that he is proposing from the Home Office.

Again, we must put the proposals clearly into context. There are 210,510 international students in higher education in the UK today. International fee income
 
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accounts for 8 per cent. of the total income to the higher education sector. That is about £1.5 billion a year. A further 75,000 international students are studying in further education colleges, and they bring £58 million in tuition fees alone into the FE sector. It is estimated that, in the round, international students contribute about £5 billion to the UK economy through their spending on goods, services, accommodation and so on.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): May I just reinforce the importance of not just that direct economic contribution, but the long-term lifetime contribution of those students' links with the UK, especially if they have studied a practical subject such as engineering? They are much more likely to look favourably on dealing and trading with us when they go back to become major decision makers in their own countries. How we treat them makes a big difference to how they will relate to this country in the future.

Mrs. Gillan: The hon. Gentleman is absolutely right. We are sending the wrong message around the world about the way in which we welcome students here. We are underestimating the enormous long-term benefits that people who are educated in this country can enjoy. Many hon. Members will have been to places abroad where people have said proudly that they were educated in the United Kingdom. That is seen as a badge of honour, so the Government must take anything that damages our reputation in that area seriously before deciding to dispense with public relations so readily through such a draconian measure.

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