The Chairman: Before I ask the Clerk to read the title of the instrument we are debating, I apologise to members of the Committee for the rather cool temperature we are experiencing. We seek to govern the country, but we cannot even run our place of work at the Palace of Westminster. I hope that it is not part of the policy on climate change; I shall not be terribly keen on that policy if it is carried to this particular extreme.

The Parliamentary Under-Secretary of State for the Home Department (Meg Hillier): I beg to move,

As ever, Sir Nicholas, it is a pleasure to serve under your chairmanship. If only your powers could run to warming up the climate, it would be even better and more pleasurable for us all.

The order is the first part of a two-stage process to set fees for the new points based system that the Government are introducing and which has been led by my hon. Friend the Minister for Borders and Immigration. It will be implemented from February next year, starting with the first tier. It sets out the new applications, processes and services involved in setting fees. Subsequent regulations that will be laid in early 2008 will set the fee levels. The order does not deal with fees in any way, but simply sets the structures. It consolidates into one process the Government’s fee-setting powers for immigration and nationality applications that are currently run under two processes. There will be an opportunity for Parliament to consider all the proposals in the round when the regulations specifying fee levels are brought forward next year.

At the end of November, the statement of intent on the points based system was published by my hon. Friend the Minister for Borders and Immigration, and only last week my right hon. Friend the Home Secretary published a statement of intent for the points based system tier 1. The order is an important first step in the implementation of the new system that will be introduced next year to manage the migration of those coming to the United Kingdom to work, train and study and who thus will be useful to the UK. It sets out the new applications, processes and services for which we intend a fee to be paid under the system, such as licences for sponsors and certificates of sponsorship issued by sponsors.

The order will simplify and consolidate the Government’s powers to set fees in the future for immigration and nationality applications, which currently cover a range of different fees. Fees for applications made overseas are set through an Order in Council made under powers in the Consular Fees Act 1980, while fees for applications made in the UK are set in regulations laid before Parliament.

My right hon. Friend the Prime Minister announced recently the merger of UKVisas with the Border and Immigration Agency, which will take place in 2008, so next year is a big year for immigration reform in the UK. There will be the same fee-setting process, which will offer Parliament the true ability to look at all the proposals in the round. The order is fairly simple, but I am sure that many issues will be raised in our debate. I am looking forward to that discussion and to answering any questions that hon. Members wish to ask.

The Chairman: I remind hon. Members that the debate will last for one and half hours. [Interruption.] Order. The hon. Member for Wantage will note what I have said about the length of the debate—despite his interruption.

Damian Green (Ashford) (Con): I always hesitate to correct a Chairman, and I hesitate particularly when you are Chairman, Sir Nicholas, but my understanding is that the debate lasts for a maximum of one and a half hours. I make that observation in the interests of avoiding an outbreak of hypothermia among hon. Members on both sides of the House.

I am grateful for the Minister’s explanation of the Committee’s purpose. I should be entirely happy to risk contracting hypothermia in order properly to scrutinise meaningful legislation. However, as she has almost admitted, the measure is slightly peculiar, in that at best it is half of what would make interesting and worthwhile subject matter for debate. The half it omits is that concerning fees. The key element of the overall proposal is how much people will have to pay, and that is precisely what we are not discussing.

I am not sure whether it is in order to say so, but my gentle suggestion is that it might have been better had the two halves of the proposal—the one that we are examining now and the one that we shall consider early next year—been brought together so as to allow debate on a matter of crucial importance to private and public sector bodies, and indeed to many arts institutions. I understand that my hon. Friend the Member for Wantage might wish to address that latter topic, should he catch your eye, Sir Nicholas.

As the Minister knows from previous debates on the points based system, and in particular the new visa charging regime, the Opposition support the principle of reasonable charges for people who want to enter the country. It is fair that those who want to come and benefit from living in the UK should be asked to pay for their paperwork to be processed and to make a contribution to enforcement of the firm and fair immigration system to which I am sure all hon. Members aspire—although sadly the Government have failed to deliver it to us.

I have a series of questions for the Minister. We know that the fee will be set on a date early next year. Will she tell us when? More important, will she outline the important details we shall need to discuss? For example, will universities or large commercial institutions such as banks, which might expect to sponsor many thousands of immigrants a year under the terms of the order, be dealt with in the same way as a small business such as a restaurant, which might wish to recruit only one worker—perhaps for a number of years? Is the fee mechanism designed to operate on a per person or a per institution basis? What mechanism will exist to ensure a robust process that is still fair to all? In particular, will the Minister address the issue of the public sector? As all members of the Committee know, the national health service is one of the main users of immigrant labour. What financial arrangements will the NHS and individual health trusts have to make under the terms of the order?

Fulfilment of the purpose of the order will, on current rates of immigration, require a large bureaucracy, so will the Minister indicate what extra staff and resources will be needed to deal with the fees and licence applications? Is she confident that the Border and Immigration Agency can deal with them all without unnecessary delays that would damage our international reputation and our ability to compete for the best workers in the global marketplace?

Current Government policy is that immigration fees should be a mechanism for the Home Office to recover costs. Will the Minister therefore indicate the expected broad level of recovery for the coming years? How much money is expected to be recouped for the taxpayer? If that money is to be spent on enforcement, what are the contingency arrangements should something happen to the world economy or the British economy, and there are fewer fees to collect than the Home Office expects? It is difficult to do more than ask questions because the order is entirely lacking in any important details.

In conclusion, although Ministers like to talk tough on immigration, sadly that has not been matched by any effective action. The question hanging over the statutory instrument is what it will mean in practice. Until Ministers address the details, it is impossible to assess whether the measure will prove to be yet another disappointment in the Government’s trail across the landscape of their immigration policy.

Mr. Bob Laxton (Derby, North) (Lab): As you can see, Sir Nicholas, a couple of Back Benchers are sweating—my hon. Friend the Member for Jarrow has started to strip off a little. When it comes to heat or cold, these things are all in the mind. Think warm, and you will be warm, Sir Nicholas, think cold and you will freeze.

The Chairman: Order. Does the hon. Gentleman doubt the integrity of the Chairman? A ruling from the Chair is final and cannot be questioned. I am sure that the hon. Gentleman will continue with his speech, but perhaps he would withdraw his belief that the Chairman was wrong in his assessment of the temperature of the room.

Mr. Laxton: Far be it for me to doubt your integrity, Sir Nicholas, or to deny your assessment that this is a cold room. I am simply pointing out that two individuals—my hon. Friend the Member for Jarrow and me—are sweating in the Committee Room. These things are all in the mind.

I would like to raise one point with the Minister. Paragraph 7.4 of the guidance notes states:

I can understand that in so far as it comes under the points based system—tier 1, highly skilled migrants—but the implication is that it will also include people who are visiting the UK and want a visa for six months. There is currently an arrangement whereby such people have to provide details to show they will not call upon the health service and that the person they are visiting has sufficient money available to ensure that if anything goes wrong they will provide financial back-up. Under the new regulations, will that provision no longer be required?

Tim Farron (Westmorland and Lonsdale) (LD): It is a pleasure to serve under your chairmanship, Sir Nicholas, and while not wishing to demur from your final ruling that it is cold in the room, perhaps the hon. Member for Copeland would agree that compared to Cumbria, it is positively tropical. Members of the Committee will be delighted to hear that I intend to be brief and that I have no plans to force a Division. However, I have some concerns and would appreciate clarification. As has been noted, it is difficult to do anything other than ask questions when we are presented with only half a job.

I would be grateful for more information about the level of fees that will be charged in each of the categories specified in the order. It is peculiar to be asked to agree on a fee without being told what the fees might be and what the options are. I would also appreciate some reassurance that forward projections of future fee levels will be reasonable. Members may be aware that a table of fees for applications for leave to remain was approved through a statutory instrument on 26 March this year. In that table of fees there were increases of up to 55 per cent. in some cases. We opposed that statutory instrument, and I would like to be confident that such unreasonable increases will not occur in relation to the applications and processes in front of us today.

I am interested in the Minister’s predictions about the cost levels in the next statutory instrument, and would find it helpful if she could tell us how the revenue that is raised and generated by the fees is intended to be used. I would be concerned if the instrument was merely a revenue-raising exercise. I expect the fees to cover genuine costs, so I would appreciate an account of the associated costs and the overall revenue from charging fees.

I would also appreciate information about the overall costs associated with operating the charging system. Perversely, there will be some costs associated with introducing a fee system. I am sure that they will be absorbed into the overall fee, but it would be good to know what they are. Linked to that, we would be interested to hear the Minister’s account of why these particular processes and applications have been chosen to carry a fee when others, as yet, have not.

We have not heard the Government’s projections of the number of people—migrants and sponsors—who are likely to be affected by the introduction of fees. That information would be helpful. Has the Minister assessed the likely impact of the introduction of fees on British employers? Obviously, fees at a certain level will have an impact of one kind, while those at a different level will have an impact of another. That information would also be much appreciated.

We accept the principle of charging fees for applications from migrants and their sponsors, but we want to ensure that such fees are reasonable and relatively stable over time, and that the revenue raised by fees is invested in covering costs associated with the application process.

Mr. Edward Vaizey (Wantage) (Con): Thank you, Sir Nicholas, for giving me the chance to speak on this important statutory instrument, and I am grateful for the opportunity to sit on this Committee and raise a number of issues. For the avoidance of doubt, let me first say that I can barely feel my toes or my hands. It is certainly chilly in this room, and I can say that with confidence having been to the Arctic with the future leader of the Liberal Democrats. I know, therefore, what genuine cold feels like.

My hon. Friend the Member for Ashford alluded to the point that I was going to raise—[Interruption.]

The Chairman: Order. The hon. Member for Sunderland, South is an experienced parliamentarian and a past Minister and he would not wish to interrupt the debate on this statutory instrument. If he wishes to carry on a conversation, would he do so very quietly?

Mr. Vaizey: Thank you for your assistance, Sir Nicholas. I should have pointed out that I have some 70 minutes in which to banter on my theme. As Led Zeppelin are not on stage until 9 o’clock tonight, I may well be able to use the full time available to me—[Interruption.] Yes, some of us have strings that we can pull.

I was at university with the Minister and know her very well. We have notched up some 18 years of friendship, and I know her to be a cultured and civilised person—she certainly was at university, although several years of politics may have knocked that out of her.

Hilary Armstrong (North-West Durham) (Lab): Is the hon. Gentleman touting for a pair at the moment? I am not offering, but asking.

Mr. Vaizey: Given my record with my own Whips Office, I think that even if the most gentle of pairs presented themselves to me, my Whips would not accept them.

To get back to the subject, my hon. Friend alluded to the topic that I was going to raise, which is the implications that this order may have for many of our great cultural institutions. We have focused, albeit relatively briefly, on the implications of fee levels for those people coming into this country in order to seek work. We have alluded to a range of different institutions—from those in the international banking sector to small local restaurants—and the impact that the level of fees could have on them. As mentioned, the impact on, for example Goldman Sachs, could be very different from that on a local restaurant in, for example my constituency of Wantage.

The impact that the order could have on the cultural and artistic sector is significant. The National Campaign for the Arts, which is chaired by the very fragrant Joan Bakewell, has been in existence for some 15 years and has recently made these changes to the visa rules one of its major campaign themes. It has lobbied the Minister and the Government assiduously on the issue to make a simple point based on simple mathematics: an orchestra visiting this country—I was lucky enough to recently see the Lithuanian national philharmonic orchestra, which played at the Hexagon at Reading a couple of weeks ago—brings between 30 to 80 people with it. I can tell you, Sir Nicholas—although you do not need to be told this as you will know instinctively—that the 10 dates that the Lithuanian national philharmonic orchestra played in its 13-day sojourn in our beautiful country were sold out. Clearly, there is a huge appetite in this country to see cultural players from different continents and backgrounds who have different artistic interpretations come to this country to perform. The new visa rules that the Minister is intent on introducing will mean that the cost of bringing in such an orchestra will rocket from £4,000 to £5,000, to £80,000 to £90,000 in immigration fees.

The gradual squeeze of the cultural sector by the Government to fill the Olympics black hole that they have created as a result of their appalling inability to add up or even remember—[Interruption]. I will happily give way to the right hon. Member for North-West Durham in a moment. The appalling black hole created by the Government’s inability even to remember that they were going to charge value added tax for some of the Olympics means that money is extremely tight. The National Campaign for the Arts and other organisations have pointed out that many other enlightened countries have put together a package of measures for cultural cross-fertilisation and have created a cultural visa, for which individual arts organisations can apply to bring over a specific cultural organisation, such as an orchestra, to play at an event.

I have alluded to the issues as clearly as I can. I cannot illuminate the Committee on the immigration issues affecting tonight’s Led Zeppelin concert, but that is perhaps an example of where they could probably pay the immigration fees themselves. I am talking about orchestras, visiting art exhibitions, and other elements of the subsidised arts that could suffer significantly from the Minister’s proposals. I ask my former university colleague, the Minister, to mention that problem when she responds.

The Chairman: In the absence of any other Back-Bench speaker I call the Minister.

Meg Hillier: The hon. Member for Ashford and other hon. Members have asked a number of interesting questions, one of which was why we are introducing the measure in two parts. The simple answer is that we are following parliamentary procedure. We must work within the legislative framework that we have and first we must have the power to set the fees. In early 2008 we will make the regulations using any additional legislative powers necessary to set the fees. At that point, there will be an appropriate opportunity for full parliamentary scrutiny on that and on the proposals we are discussing.

The hon. Gentleman also asked other questions, particularly about the different types and size of employer and how we will ensure that the system is fair. He also talked about the bureaucracy involved for the Border and Immigration Agency. On financial arrangements, in respect of the national health service, for example, we will be charging NHS trusts seeking to bring in migrants under the points based system a licence fee. In addition, we will charge a fee for a certificate of sponsorship for each migrant being sponsored. We consulted the NHS and, indeed—I will go on to address the particular points made about the arts and culture sector—we consulted all sectors on this matter. I will mention now some of the points made in relation to some of the people we have consulted and how we handled the consultation.

We began a targeted stakeholder consultation from 23 October to 9 November 2006. The consultation document was sent to more than 493 people and stakeholder groups. We received 132 written responses from 92 educational establishments, 17 employers and 23 arts and entertainment organisations. We received 31 responses after the official closing date, but of course we took those on board as well. We held a number of consultation events that were attended by 171 representatives from the education, employment and arts and entertainment sectors. That gives a flavour of the consultation and shows that we have been talking to people about this matter for some time. Although we are considering the order today, which is moving on the point based system, the fact of its existence is not and should not be a surprise to anyone seeking to sponsor someone or to any migrant who was previously thinking about entering and needed to follow that process.

The hon. Gentleman asked how we would cope with the people who apply. I remind him and other hon. Members that we currently have fee systems and we manage with those. We are reducing 80 different routes into the country to five with the points based system, so in many ways we are simplifying things. More than 200 staff will be working on the sponsorship system, which will deliver benefits from prevention of abuse in the immigration system by ensuring that those entering the country are here legally and properly.

We are focusing our resource, as I mentioned in my opening comments, on ensuring that the right people can bring in migrants so that they can comply within the law and ensuring that we are bringing into the country the people that we need to do work. We take advice from the Migration Advisory Committee, which will advise us on which groups to bring in.

The hon. Gentleman also asked how we would deal with costs if the numbers of people were to take a downturn. We are listening closely to the Migration Advisory Committee on whom we should be allowing into the country and on skills gaps, which will determine how we do our forward planning and adjust in respect of any estimates on the numbers available. A good deal of the Home Office’s work, including passports and immigration fees, for example, depends to a degree on demand. We are well used to managing that demand and keeping a good track of any odd dips or increases in demand and recognising seasonal upturns and downturns. We feel confident that, with our experience, we will cover the points and concerns that the hon. Gentleman mentioned.

The hon. Gentleman also mentioned the level of costs recovered. We have an agreement with the Treasury to recover £100 million a year above normal administrative costs for four years. We are managing costs to deliver a robust system without unfair impact, either on fee payers or taxpayers. Of course, should we not recover money through this system, the burden would fall on taxpayers. It is right that general taxation does not take the burden of the fees.

The hon. Member for Westmorland and Lonsdale—a lovely part of the world—asked what would the fees be and whether I would make any estimates. I am reluctant to go into fees guestimates at this point, because we are not debating the actual fees structure, but I reassure the hon. Gentleman that we aim to keep migrant fees—that is, for those entering the country—at broadly the same level as their comparator existing fees. The aim is that people moving from the current system to the new points-based system should not see too great a change. However, we need to recover the costs of the points-based system, so there will be variations. We are able to use the fees structure to consider whether what we are doing already is fair and whether we can make the system better. Within the limits set by the Treasury, we will use a number of factors, such as value of entitlements to the migrant, while maintaining the UK as an attractive destination for work, study, to visit and for cultural visits.

My hon. Friend the Member for Derby, North raised an important point about those tier migrants and visitors who do not have a sponsor. We will shortly be publishing a public consultation on that point, which I am sure will interest my hon. Friend. The consultation will examine visitor routes in general, because that is something that the points based system does not cover, and it will include provisions relating to family visitors. I hope that my hon. Friend and other hon. Members will contribute to that; I am sure that we all face such issues in our constituencies. However, visitors will always need to satisfy the entry clearance officer of their intentions and compliance with immigration laws at the point of entry, which I am sure that we all agree with.

I have addressed a number of the points raised by the hon. Member for Westmorland and Lonsdale about fee increases. We want people who are going through the system to contribute to the end-to-end costs of the process—it is not right that those costs should fall on the system. We already have a fee system, so it is not as though people who are not paying anything will suddenly have to pay a lot of money; people already have to pay for the process. There will, of course, be an opportunity to comment on those fee proposals in detail when they come forward in 2008.

That brings me to the points raised by the hon. Member for Wantage about the cultural and artistic sector. We have had a great deal of discussion with the sector, as I mentioned. While the Lithuanian state symphony orchestra is no doubt excellent, as a member of the EU it does not have to worry about immigration fees. Our appetite is now whetted for the skilful playing of the Lithuanian state symphony orchestra, as I am sure that the hon. Gentleman would never want to sell us a dud. It sounds fantastic and I shall make a point of mentioning to my Lithuanian counterpart when I am next in Europe that his national symphony orchestra is receiving such rave reviews in this place.

Tier 5 in the points based system will cover fees for performance artists. It will be rolling out in about the third quarter of 2008, on current estimates. While we will be looking at fees next year, we will be having further discussions with the sector. We are aware of its concerns and our aim is to develop a set of fees that are fair and sustainable. Many people in this country benefit from cultural exchange, with people arriving here and performing across a range of cultural and arts sectors. Equally, we would like reciprocal arrangements for our artists who travel. Representing a constituency that is as multicultural and diverse in arts as mine, this is an issue that is close to my heart. I know that my hon. Friend the Minister for Borders and Immigration feels the same way. We will continue to hold down prices as far as possible, to ensure that those routes, which are of great interest and importance, continue to benefit the UK.

We have had an interesting debate in the short time that we have had. Given the temperature in the room, all that remains for me to do now is to commend the draft order to the Committee. I thank the hon. Members present for their patience.

The Chairman: One thing I have learned from this debate is that the hon. Members for Derby, North and for Jarrow must be very warm-blooded. In fact, I might go further and say hot-blooded, but I am not sure that that is not a compliment.

Question put and agreed to.

Resolved,

Committee rose at four minutes past Five o’clock.