Sixth Standing Committee
|
|
Andy Burnham: I, too, feel lucky to be serving for the first time under your chairmanship, Lady Winterton, and perhaps luckier to have such a loyal attack team of supportive colleagues to help me make my case. This is a useful opportunity for me to explain some of the background to the workers’ registration scheme and why we have raised the fee for applications under the scheme from £50 to £70. I shall begin by explaining some of the background to the scheme. I am aware that there may be a Division in the House at some point, but I hope that we can conclude our proceedings before then. The enlargement of the European Union in May 2004 offered the opportunity for the UK economy to gain from the potential benefits of the free movement of a wider pool of workers from the new member states. The UK, together with the Republic of Ireland, was the first member state to open up its labour market. Opposition Members made no mention of that and would do well to remember it. We were the first member state to open our labour market to workers from the new member countries. However, the Government also recognised the need to provide the public with reassurance that opening our labour markets to workers from the new member states would not result in resident workers losing their jobs, or in nationals from the new member states coming to the UK to access our benefit system. Only this week, I was in the Czech Republic. I mention that not to impress people with my jet-setting but to point out that we—the UK Government—were invited there to thank us for opening up our labour market. I was attending a conference of all member states at which the Czech Republic were encouraging other member states to do what we had done. We were congratulated on having taken what they said was a “bold and welcome step”. There was no mention of the fee related to the workers’ registration scheme, and nor was there any mention of bureaucracy or the problems created by the workers’ registration scheme. The moves that the UK made have been entirely welcomed by the new member states of the European Union. I believe that the eight accession countries—soon to be joined by two more—will regard us highly for opening up our labour market. The hon. Member for North Cornwall looks puzzled. The UK opened up its labour market, unlike some of our European counterparts. It is right that in the years to come we should get credit for and benefit from having done that. Those member states—rightly, in my view—are grateful for our having taken that step. The hon. Gentleman and others mentioned that
Martin Horwood: I hope that the Minister is not misinterpreting our remarks. I do not think that anyone in the Opposition objected to the principle of deregulating labour markets. The objection was to the enormous scale of the increase in one year, which was insensitive to small businesses. I hope that the Minister will explain the justification for that. Andy Burnham: I think that the hon. Gentleman is confused on that point, as was the hon. Member for North Cornwall. The fee falls to the individual. Both hon. Gentlemen need to be clear about their party’s position. As my right hon. Friend the Member for Warley (Mr. Spellar) and my hon. Friend the Member for Warrington, North (Helen Jones) pointed out, the question is whether the Liberal Democrats are in favour of a subsidised scheme—that is, keeping the fee at £50 and therefore not fully recovering the cost of the scheme. I believe that the hon. Member for North Cornwall ruled that out, so are the Liberal Democrats in favour of no scheme at all? Or will they go back on that and say that they favour a self-financing scheme? I should be grateful if they let us know their position. Mr. Rogerson: My point was, as the hon. Member for Aldridge-Brownhills (Mr. Shepherd) pointed out, that the scheme was envisaged as operating under a £50 charge and now, a short period later, we are talking about a £70 charge. That is the problem. Will the charge be increased further in a short time? We are waiting to see when the scheme will be reviewed. If the scheme can operate within sensible bounds—I am looking at efficiencies—it is worthy of support, but if the bureaucracy of the scheme is to be allowed to expand and suck in more money from poorly paid workers, we cannot support it. Andy Burnham: As far as I can see, the hon. Gentleman still has not understood the point. The scheme is supposed to pay for itself so that there is no cost—as my right hon. Friend the Member for Warley said—to the British taxpayer. We believe that that is the right approach; the hon. Member for North Cornwall believes otherwise. If he thinks that the £50 fee should be set in stone, he misunderstands the principle of a self-financing scheme, such as those that the Home Office operates on visas and other matters. The cost of the scheme can vary at any time and, if we were to stick to the same fee, it would, by definition, become a subsidised scheme. The hon. Gentleman should think through the matter before opening his mouth. Helen Jones: I am grateful to my hon. Friend. Will he assure those of us on the Labour side of the Committee that, while ensuring that the scheme is efficient, he will not reduce the necessary checks made on applicants, so that it works properly and fairly? Column Number: 14 Andy Burnham: My hon. Friend is absolutely right. That is why the scheme has been introduced, but also why a charge must be levied; it must do the job that we wish. The scheme was put in place to enable us to monitor the extent to which nationals of the new member states enter the UK’s labour market, and to enable us to restrict access to our benefit system. It is obvious that those checks must be of a high standard, but we must be able to recover the costs. The figures demonstrate that the scheme has been a success. Between 1 May 2004 and 30 June 2005, more than 232,000 workers registered under the scheme. It is clear that many are working in occupations and sectors, such as agriculture and hospitality, where employers have found it difficult to fill vacancies, particularly for lower-skilled jobs. That demolishes the point made by the hon. Member for North Cornwall about insensitivity to the needs of small businesses. It is also increasingly clear from the statistics provided by the scheme that workers from the new member states are filling vacancies across the UK, not just in the south-east. Mr. Prisk: The Minister described the scheme as a success, and said that 232,000 people had registered. Why did he estimate that only 10,000 would do so? Andy Burnham: The Opposition must think through their policy on immigration. Today, they are arguing in the House for more appeals on immigration, and complaining that changes might limit the number of students coming to the UK. However, they stood at the general election on a quota policy. Mr. Prisk: Just answer the question. You got the figures wrong. Andy Burnham: The hon. Gentleman said that I had received complaints that the scheme might be unfair on small business, but he complains that we may have underestimated the numbers. The scheme has been successful and is meeting demand in our labour market. Some people who have joined the scheme were, perhaps, already in the country and have chosen to regularise their position. It is true that the figures were some way out of line, but I would be interested to know whether the hon. Gentleman wishes that fewer people were coming or whether he is happy that they are helping the British economy. I would be grateful if he explained that. Mr. Prisk: What I want is competence on the part of the Government. I want a Government who will correctly estimate numbers when they devise a scheme and include the blessed start-up costs in that scheme. Why does the Minister not accept that they made a mistake and be honest with the Committee? Why will Ministers not say that they are terribly sorry for making dreadful mistakes on the costs and the numbers? Why is it always so difficult for Ministers to put their hands up and be honest with us? Andy Burnham: The hon. Gentleman misunderstands the nature of the scheme. It does not place a limit on the numbers of people that are coming,
Mr. Shepherd: This is cake-and-eat-it territory. We all know full well that certain newspapers expressed considerable alarm at the accession and the numbers that it would bring into the country. The Government have indicated that, on their best research, that would be only a few thousand people. The challenge to the Government was that other Community countries were exercising their ability to phase in access to their labour markets, and Denmark and other countries did so. The Government said that that would lead to smaller numbers, but in the event there were large numbers. I do not know whether the miscalculation and the costs of the scheme had been predicated on the lower numbers that were anticipated rather than the higher numbers that have come in. Andy Burnham: I fear that the charge of having cake and eating it lies on the hon. Gentleman’s side. I am hearing complaints about bureaucracy and being told that the nature of the scheme imposes burdens on small businesses but the scheme’s very existence enables us to quantify the numbers coming in, to see what they are doing, in which sectors of the economy they are working, and how they are contributing to the UK labour market. That, in essence, is what the scheme allows us to do. It enables us to judge whether the decision we took to open our labour markets has been beneficial. The hon. Gentleman is wrong to say that other countries opened their labour markets in a transitional sense. Only the Republic of Ireland, Sweden and the UK opened up their labour markets. The Chairman: Order. It may help the Committee if I pointed out that the order is quite narrow and we should not tread wider than its provisions. Andy Burnham: Thank you, Lady Winterton. Mike Penning: On the point about being able to quantify the exact cost because we now know the figures, has the Minister got in front of him how the figure of £70 was quantified? We have not. There is no evidence in the documents on how the £70 was arrived at. I will be happy to support the Minister and the Committee on the £70 if he can show how he came to his view. The Government got it wrong in saying the figure should be £50, so why should we believe them when they say that it should be £70? Andy Burnham: By definition, the original fee had to be based on estimates of the cost of running the scheme because it was not in operation then. Although it was not far from being the right fee, the original figure did not fully recover the costs of the scheme. Column Number: 16 Martin Horwood rose— Mr. Rogerson rose— Andy Burnham: No, I will not give way. The purpose of the regulations, which I am pleased that the hon. Member for Hemel Hempstead (Mike Penning) might see his way to supporting, is fully to recover the costs of the scheme. The methodology means the costs that the Home Office incurs in running the scheme. I could write to the hon. Gentleman with a breakdown of the costs, but the overheads that the immigration and nationality directorate incur include managed migration costs— Mike Penning: As a new Member, I am disappointed that that documentation is not available, but if the Minister writes to members of the Committee with those details we may understand a lot better how he came to the conclusion that the figure should be £70. Andy Burnham: It is good of the hon. Gentleman to make that point. I was about to explain how we arrived at the £70 cost. That is the purpose of a Committee. Martin Horwood: Will the Minister give way? Andy Burnham: No, I will not. I am answering the hon. Gentleman. The costs are the Home Office overheads of various parts of the Department that are involved in running the scheme. The overall costs are divided by the number of individuals coming through the scheme. That gives a unit cost per application so that we fully recover the costs. The £70 does not recover any fees from the start of the scheme—it does not backfill any deficit. It is simply that from 1 October that figure enables us to fund the scheme fully and make it completely self-financing. In opening our labour markets we are providing considerable advantage to people from the eight accession countries to come here to work, to gain skills and experience and then to stay longer in the UK and contribute or to take their skills back to their country. They will have developed a tie with the UK, which I believe will be in our long-term interests. We have offered considerable benefit to individuals in making the change, and £70 is considerably less than the cost of their travel and accommodation; it is a proportionate fee in providing a benefit to individuals that does not directly require the British taxpayer to pay for it. Mike Penning: The Minister is being generous in giving way. All that I am saying on a point of trust to the Committee is that it would have been much simpler if he had given us the breakdown that he now offers us in writing. We could have considered it this morning and it could have been in the bundle of documents before us. From my party’s point of view, this discussion would not even have taken place if he had been honest with the Committee. Andy Burnham: I have tried to explain to the hon. Gentleman that this links to a point made by his hon. Friend the hon. Member for Aldridge-Brownhills. The scheme has already been approved in principle by
The fee set out in the regulations is necessary to cover full costs. The service provided by the scheme meets high standards, which is also important, as 90 per cent. of applications are considered within 20 working days. Charging to recover the full cost of operating the scheme will ensure that the service provided to individuals who will benefit from it remains consistently high. The original fee was set by Ministers to support the introduction of the scheme at a level that did not recover the full cost to the UK Government. The new fee represents the right level to recover full costs as set out in Treasury fees and charges guidance. It does not seek to recover any deficit. Mr. Prisk: Is the Minister therefore suggesting that the scheme is changing Treasury rules on the way in which self-financing schemes are affected, rather than the numbers that the scheme is seeking to administer? To most of us, a reading of the explanatory notes would suggest that the fact that the start-up costs were excluded is the principal reason for the fee increase. Andy Burnham: The change is entirely in keeping with Treasury guidance that the scheme should be self-financing. That is exactly why the order has been tabled now—to enable the scheme to move forward, fully self-financing. I challenge the argument that increasing the fee will add to the burden placed on individuals, and may discourage workers from registering. The evidence that has been cited, that accession country workers were failing to register prior to the increase was no more than anecdotal. It has been suggested that there is a degree of under-registration in the agriculture sector. Agricultural workers have traditionally been associated with a high turnover of temporary workers, and it should not be assumed that the existence of a fee is the cause of any under-registration in that sector. Those accession state workers in the sector who stay with an employer for less than a month are not, as with other workers, required to register with the scheme. It is, in our view, doubtful that a modest fee increase of £20 will make the difference between a worker choosing to register and not doing so. I accept that a £70 fee may represent a significant sum to a person
Mr. Ian Cawsey (Brigg and Goole) (Lab): You need to finish, Andy. Andy Burnham: I am conscious, Lady Winterton, of a coming Division in the House, and that we may not want to reconvene; I seek your guidance on that. The Chairman: Order. I call Mike Penning. Mike Penning: Sorry, Lady Winterton. I am in your hands. The Chairman: Order. I called you, and the Minister has given way to you. Mike Penning: If the Minister would kindly listen to me, he would probably find it more important than what is going on on the Annunciator screen, but it will be recorded in Hansard that he was not listening to the intervention that he agreed to take. I agree with him that we should not have proceeded in any way in an illegal fashion, and the order should have been brought before the House as soon as possible, even though it was laid while Parliament was in recess. Why has it taken until half way through November for the order to be brought before the Committee, if it was so important to enact the measure? Andy Burnham: The order was laid some months ago, and the hon. Gentleman was not in the House at the time. As I said, the principle of the scheme has been approved by Parliament, so I do not see any problem in making this administrative change to support a principle that he has already told us he supports. That was a nonsensical intervention. I shall briefly pick up on some of the points that I have not yet covered and try to bring things to a close. The fee is a one-off charge. No fee will be levied in respect of re-registration when a worker changes jobs. The fee will not hinder labour market flexibility. The fee will be refunded for unsuccessful applications. Workers will gain many significant benefits when registering under the worker registration scheme. Those who register may be eligible for in-work support, and they will be entitled to employment protections, including the national minimum wage. We are required to notify the European Commission by April 2006 whether we intend to continue with the scheme beyond that date. That, rather than a price review, is the review referred to by the hon. Member for Aldridge-Brownhills. We will communicate our decision to the Commission in due course. I shall quickly deal with some other points raised. I have mentioned the efficiency of the scheme; 76 per cent. of applications are cleared within two weeks, and 94 per cent. within four weeks. Those are good service standards, and they should be welcomed by Members on both sides. Column Number: 19 The hon. Member for Hertford and Stortford asked about the percentage of applications made by workers from the various countries. Polish applicants account for 57 per cent. of the total, and Lithuanians account for 15 per cent. As the hon. Gentleman rightly said, those two countries account for the majority of applicants. Martin Horwood: I raised the question of the Government’s commitment to e-government. Does the Minister know what percentage of those applications have been made online? Andy Burnham: I am coming to that point. It is a useful suggestion. The scheme is not yet available in such a form, but it would usefully improve its efficiency and we will consider whether it can be incorporated. However, service changes such as that obviously require funding and investment. We cannot will the efficiency of the scheme without investing in it; without that, we cannot improve the scheme to the standard wanted by the hon. Member for Cheltenham. The hon. Member for Hertford and Stortford asked about the underlying figures. To a point, I have answered. Some people in the country have chosen to regularise their stay. The hon. Gentleman asked whether the next quarter’s figures would rise or fall; we believe that they are broadly stable at the present level. The figure of 232,000 is the cumulative number of applications received to date. The hon. Gentleman also asked about starter costs. They are based on an estimate of costs prior to introduction; we now have a better understanding, based on our experience of operating the scheme. Volumes have been high, which demonstrates the success of the scheme. I say again that, at this point in time, we are not recovering any deficit. Mr. Prisk: Will the Minister tell us, now or in writing, how much the administration of the scheme costs our taxpayers? Andy Burnham: Nothing as of now, but the hon. Gentleman is entitled to know the difference between the £50 fee and the running costs of the scheme. I will write to him with that figure—I do not have it to hand today—but a small cost is being borne. Martin Horwood rose— Andy Burnham: I would like to make progress. Many points have been raised, and I would like to answer them. The hon. Member for Hertford and Stortford asked about the regulatory impact assessment. One reason for the scheme is that it allows us to assess the impact on our labour market of workers from the accession states. We are using such evidence in developing our points-based system for managed migration. The charge does not fall directly on business; it falls predominantly on the individual. Column Number: 20 Mr. Prisk: Does the Minister believe that it has an impact on business—yes or no? Andy Burnham: I do not believe that it has an appreciable impact on business. A certain sector of business is saying that the £20 increase may deter people from coming to the UK to register. The charge levelled at the beginning of the debate was not about the bureaucracy of the scheme or how it is administered, but whether the £70 would be a barrier to entry to the UK labour market. The figures do not bear that out. The hon. Gentleman accused me of underestimating them, which in a sense answers his point; business is benefiting because the immigrant workers are filling gaps in the labour market that need filling, and we will all benefit from that. I do not accept his point. It is a good thing for business rather than a burden on it. The burden falls to the individual, but £70 is proportionate, given the benefits that the individual is being offered. I mentioned to the hon. Member for Cheltenham (Martin Horwood) that we would consider online registration. That is a reasonable suggestion. I am looking through the list of questions to see whether there are other points that I have not yet covered. Martin Horwood: If the Minister is short of points to consider, I offer one more on the question of start-up costs. I appreciate that he does not have the figures to hand; we have discussed that ad infinitum. Will he, however, tell us over what period the scheme was expected to recoup its start-up costs? Andy Burnham: The original estimate was £50, because we believed at the time that that would recover the cost. It is not a million miles away from the charge that is now being levied. Martin Horwood: With respect, my question was this; over what period was the scheme originally budgeted to recoup those start-up costs? Surely the Minister knows that. Andy Burnham: By definition, the scheme is not permanent. It will not exist in perpetuity. From 2011, people will have full access to all the labour markets of Europe. The scheme is temporary. We believed that £50 would fully recover the cost from the outset. [Interruption.] Perhaps the hon. Gentleman should listen rather than simply mutter from a sedentary position. Martin Horwood: Will the Minister give way? Andy Burnham: No. The intention was that the scheme would be fully self-funding from the outset, but because of different assumptions about the number of people entering the country, the original
I believe that I have covered all the points that have been made. There is every reason not to accept the Liberal Democrat bid to block the change. I believe that Members on both sides have said that they favour a self-financing scheme. I have heard no support for a
Question put and agreed to. Resolved,
Committee rose at twenty-nine minutes past Three o’clock. |
| |
| ©Parliamentary copyright 2005 | Prepared 17 November 2005 |