The Chairman: Does a member of the European Scrutiny Committee wish to make a brief explanatory statement about the decision to refer the relevant documents to the Committee?

Mr. Bob Laxton (Derby, North) (Lab): I do. New procedures are in place. The European Scrutiny Committee used to meet wholly in private, but it meets now partly in public. I am sure that members of the Committee are aware of the arrangement whereby a member of the European Scrutiny Committee is selected to give brief details about its position on certain issues—in this case, I am referring to economic migration to the European Union. It might help if I explain the background to the documents and say why the European Scrutiny Committee recommended them for debate.

The European Commission proposed the two directives because the EU has skills shortages and the size of its labour force is expected to shrink. Their purpose is to make the EU more attractive to economic migrants from outside Europe. The first of the directives is aimed at attracting highly qualified nationals of third countries who wish to move to a member state. They would not be required to make one application for a work permit and another for a residence permit. Instead, they could apply for a EU blue card that entitled them to live and work in the member state to which they applied. The blue card would be valid for two years and renewable for further periods of at least two years. It would entitle the holder to the same treatment as nationals of the member state for some purposes including pay, training, some social security benefits and tax credits. Member states would be free to decide for themselves how many highly qualified immigrants to admit. After two years, the card holder would be entitled to apply to another member state for a blue card to live and work there. The second member state would not be obliged to grant a card.

In January, the Government drew the attention of the European Scrutiny Committee to the United Kingdom’s existing arrangements for the admission of highly qualified nationals of third countries. There are differences between the UK’s arrangements and those specified in the draft directive. The Government told the Committee that the proposal for the EU blue card required further detailed examination and that they had not yet decided whether to opt into the directive.

The second directive relates to the single procedure and common set of rights. Its aim is to make the EU more attractive to economic migrants, but its benefits would not be confined to highly qualified people. The draft directive would require all member states to have a single procedure whereby economic migrants could apply for a single permit entitling him or her both to live and to work in the member state. Refusal of permission would be open to challenge in the courts. Each member state would have discretion to decide the conditions for the granting of permission. The draft directive would also require member states to give permit holders a common set of rights, and thus receive the same treatment as the nationals of the member state for certain specified purposes including pay, working conditions, training, some social security benefits and tax credits.

The UK already has a single application procedure for a single permit. The Government told the European Scrutiny Committee in January that that part of the draft directive would be broadly compatible with existing UK policy, but that the proposal for a common set of rights would have a significant impact on UK immigration policy and, in particular, on the policy that people subject to immigration control should not have access to public funds. In January, the Government had not decided whether to opt in to the draft directive, and in February they told the European Scrutiny Committee that they had decided not to opt in to either directive.

The European Scrutiny Committee concluded that the draft directives posed three key questions. First, is it necessary and desirable for EU legislation to prescribe the conditions for the admission of highly qualified third-country nationals or should each member state decide for itself what the conditions should be for admission to its territory? Secondly, is it necessary and desirable for EU legislation to prescribe a single application procedure and permit and a common set of rights for third-country nationals? Thirdly, should the UK opt into the draft directives? Because of the importance of those questions and their connection with the Commission’s wider vision for a common EU immigration policy, the European Scrutiny Committee recommended the documents for debate.

The Chairman: I call the Minister to make an opening statement.

The Parliamentary Under-Secretary of State for the Home Department (Meg Hillier): As ever, it is a pleasure to serve under your chairmanship, Lady Winterton. I know that you will ensure that there is good order in the debate.

As my hon. Friend the Member for Derby, North outlined, the directive was published on 24 October 2008. One proposal was for blue cards that set out conditions of entry for highly qualified third-country nationals who wish to work in member states. A second proposal was for the single application procedure and the permit to reside and work in member states. Crucially, the proposals involve a common set of rights for such third-country workers. The Commission’s aim was to enhance the competitiveness of the EU economy and improve the ability of the EU to attract and retain highly skilled migrants.

Having weighed up the proposals carefully, the Government’s position is emphatically not to participate in the directive. That is for three main reasons. We want to play as full a part as possible in the EU’s immigration and asylum policies. However, we believe that the development of our points-based system for the management of legal migration to the EU will address those matters far more effectively from a UK perspective than any European agreement. It is important that our immigration policy targets those with the skills and talents that the UK needs. We have set up a couple of organisations, in particular the Migration Advisory Committee, which in time will advise us on the new points-based system.

We have three months to decide whether to opt in. Whatever the view of the Home Office, it is important that we canvass views across Whitehall to ensure that all parts of Government are in accord. That is why we did not make our position clear at the moment of publication. Quite rightly, we listened to others in the Government to ensure that there was a common view before making our decision not to opt in.

It is worth going into a bit more detail about what the directives involve. The highly qualified workers directive includes the possibility for highly skilled migrants to move from one member state to another as a highly qualified person. However, we strongly believe that that would give such workers preferential access to the labour market over third-country nationals arriving from outside the EU. Once a person is in, they are on a fast track to ease of travel around Europe. However, getting in in the first place could be more difficult.

That proposal is completely at odds with our points-based system, which was unveiled by the Minister for Borders and Immigration in his announcement of 29 February, when the first tier for highly skilled migrants went live. We borrowed that system from those that work very well around the world, in particular from Australia. We believe that it will meet the needs of the UK labour market effectively.

We also feel that those who are not European economic area nationals but are resident in a member state should not be treated differently from non-EEA nationals. We do not think that we would meet UK immigration standards, which are tougher than elsewhere in Europe, if we adopted the approach in the directive. Doing so would very clearly erode our decision to maintain our own immigration controls, which we see as vital with respect to third-country nationals.

The proposal for a single application procedure is broadly compatible with our points-based system. We already implement a process whereby there is a single authority for issuing and a single permit that is issued to the applicant. Any significant amendment to the instrument could lead to incompatibility with the points-based system. That would concern us.

An area of real concern to the UK is a common set of rights for third-country workers. That would provide rights that go firmly against our long-standing policy that anyone subject to immigration control should not have access to public funds. Equal treatment of third-country nationals in education, for example, will mean that people from third countries are charged the same fees at university as UK and other EU nationals. Loss of the fees would have a serious financial impact on many higher education institutions. The thinking behind the directive is different to the UK’s approach to the rights of third-country nationals and to the management of migration flows. That is another clear reason why we did not want to support the approach.

Our decision needs to be seen in the context of the points-based system that we have introduced. We believe that that system will be more transparent to users and the wider public. Someone applying to enter the UK as a highly skilled migrant will be able to test for themselves whether they have the necessary qualifications and the likely points. That will prevent people from putting in applications that are unlikely to be successful, which will save them money and will mean that they do not waste their efforts. The system, therefore, will be a major benefit.

The points-based system has been worked out to ensure that only those who have the skills that will benefit the UK economy are admitted. The independent Migration Advisory Committee has been set up to advise individuals on the particular skills that are needed in the UK. Such advice will be based not on the needs of the wider EU labour market, but on the UK’s needs. With EU expansion, it is worth remembering that the needs of Slovenia or Poland, for example, may be different to the needs of the UK. We feel that it is important to maintain our own approach while still playing a role within the EU. We agree with the European Union Committee’s 14th report of 2005 on economic migration to the EU that labour migration can sensibly be regulated only at a national level. For those reasons, the UK decided not to participate in the adoption and application of the proposals.

To date, we have sought to participate, to the widest extent possible, in EU measures where they are consistent with our policy of retaining our border controls and where they are in the national interest. That has meant that we have not opted in to EU measures on legal migration. Nevertheless, the Government welcome the opportunity to discuss and debate European co-operation on legal migration, and we will continue to be involved in the discussion and the negotiation of those directives, and continue to seek to influence developments if it is in the UK’s interests to do so.

The European Scrutiny Committee raised three key questions. The first was whether it is necessary or desirable for EC legislation to specify the conditions for the issue of permits entitled by highly qualified members. We believe that our points-based system will answer that particular point. The Committee also asked whether it was desirable to have a single application procedure. I think that I have covered that. We believe that EC legislation would bring little added value to what we do already.

In response to the third question, on whether the UK should opt into either, both or neither of the proposed directives, the UK Government’s position is very clear: we will not opt in to either of the directives.

The Chairman: We have until half-past 5 for questions to the Minister. May I remind hon. Members that questions should be brief? It is open to an hon. Member, subject to my discretion, to ask a series of related questions, one after the other. In doing so, I hope that hon. Members will bear in mind the interests of others who may also wish to pursue a sustained line of questioning.

Mr. Dominic Grieve (Beaconsfield) (Con): I welcome you to the Chair, Lady Winterton. I shall ask one question at a time. If that gets answered and nobody else wants to ask one, perhaps I can come back with another one.

Will our signing up to the Lisbon treaty have an impact on our ability to choose not to opt in to directives of this kind? In particular, will such measures be subject to qualified majority voting? If they are and they were to return to the Committee at a later date, the options open to the Government, which the Minster has chosen to exercise today, would not be available to us.

Meg Hillier: The Lisbon treaty essentially does not change anything on immigration matters. The UK has always had the opt-in opportunity and we still do so under the Lisbon treaty. Hon. Members will be aware that the UK is keen to maintain our strong borders, which we should be able to do with the well-managed points-based system. The matter would be a subject for qualified majority voting in future.

Tom Brake (Carshalton and Wallington) (LD): It is a pleasure to serve under your chairmanship today, Lady Winterton. I shall ask the Minister two related questions.

I understand the reasons deployed by the Minister for not opting into the proposals. However, if the UK Government find their policies on the points-based system, for instance, not to be as effective as the European Union’s proposals in attracting highly skilled workers to the UK, would the Government consider in the future opting in?

The Chairman: Order. The Minister will answer the first question, then I will call you again, Mr. Brake.

Meg Hillier: The hon. Gentleman asked what the UK would do if it found that the points-based system was not effective. We cannot opt into something after a certain period, but we are confident that the points-based system will be effective. I have outlined why we believe in the importance of national Governments having control over such issues: there is not necessarily a common need across the European Union for particular skills. The mechanisms that we have set up include not just the points-based system, but the advisory committees, which ensure that Ministers are given proper advice. For example, we have currently suspended tier 3 for seasonal workers, because we believe that there are enough people within the European Union to fill those jobs. We believe that we can be more responsive using the points-based system and have every confidence that it will be successful.

Tom Brake: I thank the Minister for clarifying that there will not be the option to opt in at a future date. Could she say for the benefit of the Committee—or write to me, if this is out of order—whether the Government will be reviewing the success of the points-based system, and at what point?

Meg Hillier: I can write to the hon. Gentleman with precise review dates, but the system is being rolled out over 18 months, starting with tier 1, which has already had a number of applications. The figure changes daily, so Members must forgive me for not committing myself to today’s figure, which will be different from the one at the end of last week. We will be monitoring the situation. We have constant negotiation and contact with various sponsor bodies and others, and are always open to reviewing and looking at the system. We have set up a robust system. Anything we change will mostly be on the basis of information from the Migration Advisory Committee.

May I correct what I said in reply to the earlier question from the hon. Gentleman? I apologise for misleading the Committee. We could opt in after adoption, although it is unlikely that other member states would agree a directive that we could adopt without our needing to amend it. The outcome of what I said was right, but I inadvertently misled the Committee on the procedure involved—my apologies.

Mr. Grieve: My second question may be somewhat hypothetical given that the Minister is clearly not taken with the proposals. What consideration has been given, at European level, to the discriminatory nature of the proposals? Hitherto we have always had the accepted principle that we discriminate in favour of other EU nationals, but that we have common policies for those outside the European economic area. However, one of the features of the proposals clearly envisages that blue card holders will enjoy special privileges, including access to benefits, which other non-EU or non-EEA nationals will not have. That raises the question of whether that is discriminatory and might fall foul of the European convention on human rights. Has that been considered? Has the Minister a view?

Meg Hillier: The Government and I certainly have a view, which is one of the reasons why we did not opt in. We felt that we have strong rules at present, while the earned citizenship Green Paper goes further in discussing what public benefits people have. We already have firm rules about people’s access to publicly funded services and we feel strongly that is what needs to be the case. We have an agreement across the EU about not giving people from outside the EU with blue cards particular benefit over other people. I shall have to write to the hon. and learned Gentleman about precisely what discussions have taken place in Europe. We have given our views on the proposal, which I have outlined to the Committee, but member states that are keener on it will doubtless have gone into it in more detail. I attend the Justice and Home Affairs Council. In fact, I have attended every one of its meetings since I became Minister. However, we have not discussed the proposal at that level of detail at Council meetings; we have discussed it only at peripheral level, partly because the UK will not be opting in.

Mr. Crispin Blunt (Reigate) (Con): The Minister has given an admirably clear statement as to why those matters are appropriate to be decided at national level, both practically and philosophically. Will she explain why the Government have therefore been party to a treaty that allows the United Kingdom an opt-in facility?

Meg Hillier: We are party to the Lisbon reform treaty because we negotiated the right to opt in that we have at present. That was one of the important concessions that we negotiated. Perhaps I have misunderstood the hon. Gentleman’s question. I do not know whether it is in order for him to clarify it. We have agreed a treaty under which we can opt into certain proposals, as we already do.

Mr. Blunt: That is entirely the point. The Government have negotiated a treaty under which, on the basis of the Minister’s explanation of their position on the United Kingdom’s interests, it could never be in the country’s interest to opt into those measures. They should be decided at national level, so why has she allowed the United Kingdom to become party to a treaty that could in future undermine that position, particularly if other people are directing the affairs of the country?

Meg Hillier: Perhaps I should make it clearer that, on matters of immigration such as this, the UK currently has the option to opt in, as it does, equally, under the Lisbon treaty. That means that if we do not opt into a measure, it will not apply to the UK; therefore, the UK Government’s position stands.

Mr. Grieve: Following on from that question, by way of clarification, is not the difference between the existing position and the future position that, at present, as we have heard, the United Kingdom Government have an option to opt into individual proposals and that in any event decisions must be unanimous, but that following the signature of the Lisbon treaty, if we decide to opt in generally to the framework, we would be bound by qualified majority voting decisions?

Meg Hillier: That is not so radically different from the proposal that we are examining today. Other countries may wish to co-operate on legal migration and to use qualified majority voting. The British Government have the choice of whether to do so. That was one of our successes during the Lisbon negotiating process, which was led so effectively by my right hon. Friend the Prime Minister.

Tom Brake: Will the Minister set out the position that has been adopted by Ireland and Denmark if she is aware of it? She may have had discussions with them on the matter. I understand that they are in the same position as the UK in having the capacity to opt in, should they choose to do so.

Meg Hillier: I have had a number of discussions with my counterparts in Ireland and Denmark. However, I have not personally had discussions on the matter. I am happy to write to the hon. Gentleman about discussions that may have been held on it at the level of officials. We are currently working closely on passenger name records, on which we believe that we have a joint interest.

Mr. Peter Lilley (Hitchin and Harpenden) (Con): I am grateful for the opportunity to ask the Minister to clarify a point. If, under the Lisbon treaty, a future Government or Parliament were to opt into those measures, using a temporary majority driven by the Whips, in the way that has been used recently to drive the whole treaty through, could a subsequent Government, empowered by the electorate to withdraw from that item, do so in practice?

Meg Hillier: It is my understanding that that would not happen, but I would have thought that was the whole point of having the facility. To go back to the beginning, we have negotiated the same opt-in that we currently have in Europe. We should highlight the fact that it is an important opt-in. It is the business of the Government of the day to make their own decisions. Should this, or any future Government, decide to opt into a measure, they cannot opt out. They must opt in and stay in the process, and that is a matter for the Government of the day. For the reasons that I have outlined, the Government have decided not to opt in. However, in future, should this, or any other Government wish to opt into any measure—it could be a Government of my party or that of the right hon. Gentleman—they would have that choice. It is a matter of Government sovereignty and it is important that the democratic process is upheld.

Mr. Lilley: I am grateful for the opportunity to pursue the subject. The Minister says that it is a matter of democratic government and the sovereignty of Government. Actually, it is about the sovereignty of Parliament and about binding in the sovereignty of future Parliaments—something that has been abhorrent to the British constitution since time immemorial. Is the Minister saying that a Government with a temporary majority can bind future Parliaments and Governments in such a way that they could not opt out of this measure? I will give her an opportunity to say, “No, it is not” and “Rejoice, rejoice”, because there is reference in the treaty to compensation measures should we opt out of some things already opted into and subsequently amended. Would that give us a let-out if a Government with a temporary majority opted in—something that the Minister would clearly disapprove of, as she does not want anyone to opt into the measure?

Meg Hillier: In a sense, every Government majority is temporary until the next general election. No Government have ever retained a majority from the beginning of their time in office to the end of however many terms of Parliament they go through. We currently have an opt-in and it is up to the Government of the day to choose whether or not to exercise it. There is a slight difference in respect of the issue that the right hon. Gentleman raised about the current negotiations. Those negotiations allow certain measures to go through—forgive me, Lady Winterton, if I am not au fait with the exact detail of what happens across all Departments and all areas of opt-in—but once a country has opted into something, it is very much a one-way route because we cannot have countries opting in and out as something goes through the process. That is what we have signed up to as members of the European Union. We may have to agree to differ on certain aspects of our position on Europe.

The Chairman: Before anyone else catches my eye, perhaps I could mention that although these matters are important, the debate should relate to the provisions and likely effects of the draft directives. If no more members of the Committee wish to ask questions, we will proceed to the debate on the motion.

Motion made, and Question proposed ,

Mr. Grieve: I shall not detain the Committee at any great length. It is apparent that there is, at least in respect of these two documents, agreement between the Government and ourselves that they should be rejected and that we should not proceed to sign up to them. I am grateful to the Minister for her answer. There seems to be a degree of common ground, and it is important for us to preserve our flexibility and autonomy in making decisions on immigration.

The documents that we are being asked to consider could have major consequences if we were to sign up to them—as the Minister has accepted—and that highlights the ratchet effect of the European Union system. I do not entirely agree with the Minister that countries simply sign up to a one-way street; the lack of flexibility that currently exists within the EU is one of the reasons why as an institution it creates such public unease. I do not wish to widen the debate, but it is also one of the reasons why the Lisbon treaty is so controversial—it adds to that process.

The Minister is right. It would be difficult for the Government to sign up to either of these measures without utterly undermining everything that they have been saying about economic migration over the last three or four years. In view of their previous position, it would be difficult for the Government to explain how one could maintain confidence in the work permit system, which is designed specifically to prevent individuals coming to the country to seek work when there is no guarantee that they will find it, when one of the provisions is to allow individuals who are blue card holders, but not EU nationals, to come into this country to do precisely that. I was not entirely surprised, therefore, to discover that the Government were not enthusiastic about those proposals, because if they were to adhere to them, they would be required to stand what they said previously completely on its head.

I will not take up the Committee’s time any further, other than to say that I am glad that we have had the Minister’s reassurance that the two measures will be returned to the EU with the clear indication, which it has already received, that we will not participate in them.

Tom Brake: I, too, will make a succinct contribution. I listened carefully to the Minister and am happy to support the Government’s position. The only point that I will make is that clearly the EU as a whole has a big problem with regard to skilled workers. I understand that 85 per cent. of unskilled labour goes to the EU, compared to the 5 per cent. that goes to the US, whereas 55 per cent. of skilled labour goes to the US and only 5 per cent. goes to the EU. I hope that the Government’s points-based system will address that problem, as might the EU’s scheme. I certainly hope that the Government will be successful in ensuring that the UK attracts many more highly skilled workers than is currently the case, because clearly we are losing out to the US.

Mr. Lilley: I want to support the Government in opposing the regulations, for reasons additional to those that they have put forward. The hon. Member for Derby, North, in outlining the reasoning and rationale behind the proposals, said that it was based on the presumption that there were widespread shortages of skills in Europe that were best addressed by importing labour from abroad. I hope that the Minister will look closely at the evidence submitted by Lord Turner, who is an adviser to the Government on pensions and green policy, but sadly not yet on immigration policy. In the evidence that he submitted to the Lords Committee on immigration policy, he pointed out that the notion of shortages is essentially economically illiterate, that shortages can only exist if a price is held below the market clearing price and that the notion rests on the assumption of the lump of labour fallacy—that there is a given amount of work to do and a shortage of workers. That is an exact mirror image of the lump of labour fallacy used by the British National party when it pretends that immigrants take away British jobs from British workers. I hope that she will look carefully at the rationale that the EU uses, oppose it when it does so and stop the Government using it, because it is bogus, as Lord Turner pointed out.

Meg Hillier: Hon. Members have raised some interesting points, and I find it interesting that there is such agreement across the Committee on immigration. I will certainly pass that on to the Minister for Borders and Immigration, who will be fascinated to hear those views.

We will have to agree to differ on the Lisbon treaty—I hope that you will forgive me for mentioning it, Lady Winterton, but it was raised by other hon. Members. The treaty has been passed by the House, and I believe that the mechanisms that it proposes are reasonable and will be effective in allowing a larger EU to work more effectively. When the EU was created, it was a much smaller entity, and it is important to have those new mechanisms for the current member states to work together effectively.

The hon. Member for Carshalton and Wallington raised some interesting points about the flow of labour and I point him to the work of Richard Florida, an American academic who has written about the global effects of migration. He mentions global cities, and I am not entirely sure that I agree with the hon. Gentleman’s take on the figures about migration to the EU and the US. Richard Florida has drawn a map in one of his books that shows spikes of key world cities, such as London. Those world cities attract world migrants: highly skilled people who will travel as easily between Frankfurt, New York and London as many of us travel to work within our home countries. The overall debate about migration is complex, as I am sure hon. Members appreciate.

I am interested in the comments made by the right hon. Member for Hitchin and Harpenden about Lord Turner’s views. The British Government are not economically illiterate. My right hon. Friend the Prime Minister of all people can hardly be described as economically illiterate on this or any other issue. We are taking appropriate measures to ensure that we have the right workers in the right jobs and that we keep the UK economy growing.

I have stressed that the UK will not opt in to those directives. I am pleased that that has common support in the Committee, although disagreement would have made for a livelier debate. We will continue to work in the interests of the UK on EU matters in relation to this subject.

Regarding the comment raised by the hon. Member for Carshalton and Wallington about Ireland and Denmark, I am advised that Ireland has not opted in at this stage. Ireland and the UK tend to operate in a similar way because of the common travel area. That is not a guarantee—we do not have a treaty or an agreement—but it is often the case. Denmark does not have a choice. It cannot participate, but might do in future under the Lisbon treaty. I hope that that answers his questions. It is also worth stressing that we have a choice. We took a strong stance in negotiating the Lisbon treaty and we therefore have the choice to opt in, which is important for the reasons that I outlined.

I thank members of the Committee for their interest in the topic and their contributions, and I thank you, Lady Winterton, for chairing the proceedings. I hope that my responses have dealt as fully as possible with the concerns and points raised. Hon. Members are welcome to raise any further issues with me outside the Committee. I commend the motion to the Committee.

Question put and agreed to.

Committee rose at seven minutes past Five o’clock.