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I am grateful for the chance to debate in the House one of the most important pieces of the Government’s immigration reform programme for 2008. At the beginning of the year I said that this year would see the biggest changes that we have made to the immigration system and to our border security for 45 years. The House will know from the Prime Minister’s statements on national security earlier in the year that the Government are radically changing the way that we police our borders, with the creation of the UK Border Agency, with fingerprint visas abroad, compulsory ID cards at home and new systems that will replace those that were phased out in 1994 to count people in and out of the country.

Alongside the new systems to police the way people move across our borders, the points system will help us to decide in the first place who should or should not have the right to come through those borders to work or to study. We have published proposals to change the way in which we judge not only who can come to the UK, but who can stay in the UK. Those proposals were set out in our Green Paper on earned citizenship.

Amid all the changes coming into place this year, undoubtedly the points system is among the most important that we are making. I am grateful for the timing of today’s debate. It is especially fortuitous because although we have introduced the points system for highly skilled migrants—that started earlier this year—it will be after purdah that we seek to publish important statements of intent for the next stages of the points system. Today’s debate will allow me to reflect on contributions from right hon. and hon. Members before we finalise that policy.

In these introductory remarks, however, I should put on the record my thanks to my right hon. Friend the Member for Leicester, East (Keith Vaz), my hon. Friends the Members for Hendon (Mr. Dismore) and for Brent, North (Barry Gardiner) and the Chinese community organisations and those such as the Bangladeshi Caterers Association, who have all helped me to shape the policy that we will publish after purdah.

The statements of intent will not, of course, be the final word. The system introduced to replace work permits, a system that will sweep aside about 30 different routes into the UK, will come into effect a little later this year. However, I want to publish statements of intent so that we have as much time as possible to reflect on the changes that we are making and to subject them to public scrutiny to ensure that they are in the best possible place.

This afternoon, I shall confine my remarks to three points. First, I shall discuss the Government’s objectives in introducing the points system. Secondly, I shall mention a bit of the detail on how we see the next stage of reform working in practice. Thirdly, I want to allude—no more—to the nub of the debate, which I suspect will divide us this afternoon.

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My starting point is to recognise and celebrate the contribution that carefully controlled migration can make to the United Kingdom. As the grandson of immigrants to this country, I could, of course, talk with feeling, if not eloquence, about the social and cultural benefits that newcomers bring. However, the House will be pleased that I do not plan to make that detour this afternoon. I will, however, underline the economic benefits that I think and hope are recognised on both sides of the House. Earlier this year, the House of Lords produced a report about the economic benefits of migration. I thought that it made rather better reading than the press notices and some of the commentary on the day. I was especially grateful that the report confirmed my own judgment that gross domestic product per capita should be the principal judge of the contribution that migration makes to this country.

Keith Vaz (Leicester, East) (Lab): I have paid tribute to the fact that the Minister has been all over the country meeting communities. What message has he received from them about the points-based system?

Mr. Byrne: My right hon. Friend knows that I have the privilege of representing a constituency whose population is about 50 per cent. Pakistani. The messages that I have received in my meetings all over the country are very similar to those that I have received from my constituents for some time. That message is that people want the immigration system to change and our border security system to be toughened. However, people do not want us to cut ourselves adrift from the rest of the world and somehow seal the borders.

People think that immigration has a vital contribution to make to our economy and future place in the world, but they want the system to be carefully controlled and carefully balanced. People want us to put an analysis of migration’s impact on wider public services alongside the economic benefits that immigration can have, and to strike the right balance. However, we should be absolutely clear that theory and evidence both point to the positive contribution of migration to wealth, including wealth per capita.

Pete Wishart (Perth and North Perthshire) (SNP): In his journeys around all parts of the United Kingdom, has the Minister come to recognise and appreciate that its differing nations have very different and divergent population and immigration requirements? Will he recognise that in some of the proposals that he is bringing forward?

Mr. Byrne: The hon. Gentleman is absolutely right. I shall not quickly forget the meeting that I had in Newcastle at the end of 2006. The civic leaders of that city made a good argument to me. They said that they wanted to grow dramatically the population of their city in the following 10 years and that, however hard they tried, they would not achieve that by encouraging their citizens to breed faster. They recognised that immigration would be an important part of their overall plans for regenerating and setting out a new future for their community.

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Mr. Andrew Dismore (Hendon) (Lab): Does my hon. Friend agree that one of the main benefits of migration has been to enrich substantially the culinary experiences of our indigenous population? I am thinking particularly of Chinese and south Asian restaurants. Does he also agree that the population at large—not just Chinese and south Asian people—would hate their ability to access those services to be restricted? Does he agree, further, that one of the particular concerns is the language test, which I suspect is the issue to which he alluded but did not fully refer in his opening remarks?

Mr. Byrne: My hon. Friend is right. The evidence of ethnic minorities’ contribution to the richness of our culture, in London and elsewhere, is considerable and often first seen in cuisine. My hon. Friend touched on the language test, and I shall say a little about that later. To reflect back on the question asked by my right hon. Friend the Member for Leicester, East, I should say that wherever I have gone, the emphasis has been on English being the value that this country wants to put centre stage in immigration reform.

Mr. John Hayes (South Holland and The Deepings) (Con): The Minister is, as ever, courteous and he is making a measured case. However, he made a point about the impact on infrastructure almost as though it was unrelated to the general point about macro-economics. That seems—I am choosing my words cautiously—misguided. We cannot separate the impact on housing demand, health and education from the economic benefit. Does the Minister agree that too often the macro-economic case has been argued without consideration of those economic effects on local communities, as the House of Lords report recently made clear?

Mr. Byrne: This will not make me universally popular, but I should say that since I was asked to take up this role, I have consistently said that we have to strike a balance in immigration reform between the economic contribution that we know migration brings and the wider impact that we must know that migration has on wider public services. That is the balance that we seek to strike in introducing the points system.

We have to try to undertake that balancing act on the basis not of anecdote but of evidence. That is why we have the migration advisory committee, an independent committee set up to tell the Government where in the economy we need migration—and, crucially, where we do not—and why we have set up alongside it the Migration Impact Forum, which is not a great name for an important group of people. It is made up of front-line public service managers from all over the United Kingdom who are able to marshal and analyse the evidence on the wider impact of migration. It is important that that evidence should be published and transparent so that the public can see what evidence Ministers are balancing when they come to a decision about how many points a newcomer needs to come to this country. We are explicitly seeking to recognise the fact that both sides of the debate need to be taken into account.

Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): Before all those interventions, I think that the Minister was about to say that he agreed with the
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House of Lords Committee’s consideration of GDP per capita. If he was, may I draw his attention to what is perhaps a rather nerdish or statistical point? That figure is derived from the division of one very large number by another, so it is really important when we use it as evidence that it should be set within a statistical context. I suspect that levels of migration would have to be hugely greater than at present for one to be able to say with any certainty whether migration was or was not statistically significantly affecting GDP per capita.

Mr. Byrne: My hon. Friend has guessed the point that I was about to make. The House of Lords criticised the idea of using GDP per capita because it seemed to result in quite a small number. However, as my hon. Friend says, when one divides the GDP contribution of migrants by the total population of the UK, of course the number will be small because 87 per cent. of the work force is British. The one good report in this area, which was published by Dustmann et al in 2007, points to an economic contribution of GDP per capita through migration over the past decade of about half the total contribution to GDP per capita that has been made by upskilling the labour force. So yes, the number is small, but it is not insignificant.

Mr. William Cash (Stone) (Con): I am sure the Minister knows that a great deal of the statistical basis that we use is based on sampling. However, under the electoral roll arrangements all local authorities are required to have available information on foreign nationals, with a penalty of £1,000 for failure to supply it. What is astonishing, however, is that the figures are not then passed on to the Office for National Statistics. Does the Minister agree that it would be extremely useful to be able to correlate the information in the local authority archives, without disclosing names and addresses and so on, to enable us to get a much firmer statistical base than under the current sampling arrangements?

Mr. Byrne: We need to take several measures in order to ensure that we have proper statistics. That was a valid part of the House of Lords’ criticism. First, we must arrange systems for counting people in and out of the country. Parties on both sides of the House bear some responsibility for the fact that we are unable to do that. Exit controls were phased out in 1994, and this Government finished the job in the late 1990s. I have consistently said that that was a mistake. Reintroducing systems to count people in and out of the country, as we will by Christmas, is a vital first step. However, we then have to deal with the resident population who are already here. The Office for National Statistics is doing several things through reform of the labour force survey and other household surveys. However, I have to say to the hon. Gentleman that over the long term ID cards for foreign nationals will make a more important contribution because they will be compulsory for all foreign nationals living in this country. Under the terms of the UK Borders Act 2007, foreign nationals will have to register their addresses, and over time that will give us the best possible measure of where people are living and how they are moving around.

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Mr. Peter Bone (Wellingborough) (Con): I have had difficulty trying to work out economic migration into this country since 1997. What is the Government’s estimate of the number of economic migrants?

Mr. Byrne: The evidence that we gave to the House of Lords is that we estimated that there was some £6 billion in economic contribution. Some people have criticised that, but I think that £6 billion is a prize worth having and that our economy is bigger and stronger as a result. Moreover, as I think we all recognise, particular sectors of the economy have benefited immeasurably from immigration—the financial services sector is a good example, because it contributes about 24 per cent. of the corporation tax take. It is important to look at a basket of indicators, but if pressed I would say that GDP per capita is perhaps the most important.

Chris Huhne (Eastleigh) (LD): Does the Minister accept that there is public disquiet about the statistics, partly, and perhaps unfairly, because it is assumed that the body responsible for collecting them is not fully independent? Does he agree that now that we are moving into a world where we will have a better statistical base, for the reasons that he set out, it would be sensible to centralise the statistical function under the Office for National Statistics?

Mr. Byrne: I will resist the temptation to veer off brief. Suffice it to say that the starting point is for us to get in place systems that we phased out in the mid-’90s, because the ability to count people in and out of the country is fundamental to the calculations that hon. Members are pressing for.

Mr. Bone: I obviously did not make my question clear. I was asking not about the economic benefit but about the number of people who have come in. I have seen 1.1 million cited as the number of economic migrants who have come in since 1997. Is that the Government’s ballpark figure?

Mr. Byrne: I have brought along the precise cumulative totals. The figures for 2006, for example, show that 529,000 came back into the country, of whom 452,000 were non-British. I would be happy to supply the hon. Gentleman with extracts from the report on cumulative totals that we published to the House of Lords and others.

Mr. Hayes: I am grateful to the Minister for a second bite of the cherry. Before he moves on from his macro-economic analysis, will he say whether the Government have taken account of the opportunity cost of immigration? Since 1997, the number of NEETs—young people not in education, employment or training—has grown by about 15 per cent. Many of them are unskilled, and many of the migrants coming into Britain are doing unskilled jobs. Lord Leitch argues that the demand for unskilled labour will fall during the next 10 years or so. It is not really possible to square the situation, is it? There are fewer jobs, more migrants and more NEETS. What do the Government think about that?

Mr. Byrne: That is a common argument. It is so common that economists have a name for it: the “lump of labour” fallacy, which is the idea that the number of jobs in an economy is fixed. We have to recognise that
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during the past 10 years, the employment rate among British nationals has gone up, which has happened at the same time as average wages have gone up each year, and while productivity has gone up. A rather good article in The Economist a few weeks ago showed that GDP per capita had gone up by something like 2.4 per cent. in each year during the past decade. That is well above the figure for the economies of the United States, Canada, France and Italy.

Where I agree with the direction of the hon. Gentleman’s question is on whether we should admit low-skilled migration from outside the European Union. I do not think that there is a need for low-skilled migration from outside the EU, but I shall talk about that in a moment.

Mr. James Clappison (Hertsmere) (Con): On the point raised by my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), the Minister will know from his statistics that there are two measures of the total amount of inward migration into the country—not net migration, but total migration. The one to which he referred shows inward migration of 529,000 and the total international migration figure, which I think is the preferred statistic, is 591,000. When one subtracts the emigration figure from that, one is left with a very high figure for net migration of 190,000. Can the Minister tell us of any year in history when the total inward migration figure was higher than 591,000, according to the total international migration statistics or any others that he wants to produce?

Mr. Byrne: I am not sure whether it ever has been higher, but I think that there is now a degree of consensus between us. I am doing this slightly from memory because although I am a keen student of the speeches and comments of the hon. Member for Ashford (Damian Green), I do not have a photographic memory. Many of us have come to recognise that it is the net balance that is important; we have to look at how many people are coming in versus how many are leaving. The net balance for the last year for which statistics are available was about 190,000, which is substantially down on previous years. In fact, it is about 23 or 24 per cent. lower than previous years. I see that the hon. Gentleman disagrees.

Mr. Clappison: It is still a very high figure. The figure of 190,000, which is the long-term projection for net migration, is equivalent to a city the size of Milton Keynes, as the House of Lords pointed out in its report. The Government cannot control emigration—although they may drive people to want to leave the country—but they can control the total figure for inward migration through their policies. I put the question again to the Minister: bearing in mind the Government’s policies of issuing work permits, the policies they adopted towards the EU accession 8 countries and all their other polices, can he name a time in history when there has been a higher figure than 591,000?

Mr. Byrne: I think that I have just answered that question. I draw the hon. Gentleman’s attention to the degree of consensus that the net balance is the important number. I know that he will disagree with that and I look forward to his remarks, in which I hope
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he will answer a simple question: if there is a magic number of people who should come into the country this year, what is it? The political debate is suffering from the fact that there is an allusion to a magical number, but to date it has been secret.

Mr. Clappison: As a Back Bencher, I do not make policy. The Minister seems to imply that it is impossible to get the figure lower. I point out to him the figure that I have just cited, which he agrees with, of 591,000; that figure was 327,000 in the year that the Government took office. It would not be a bad thing if we got back to the situation that the Government inherited, but changed through their polices.

Mr. Byrne: The hon. Gentleman lives in the real world, and I acknowledge his long interest in and the careful attention that he has paid to the matter. As a Minister, one welcomes people taking an interest in one’s work. However, he must accept that, around the world, people are on the move. Global migration has doubled since the 1960s. The net migration rate to the UK is pretty much the OECD average; there are several countries to which net migration is higher. There is a similar pattern of people on the move in industrialising countries. Indeed, in China last week I was told about the migration of people from western to eastern China—some people believe that that is the largest movement of people in human history. People move around. Over the centuries, they have moved for three reasons: love, work and war. If anything, the patterns are changing faster, but that comes with industrialisation. If the hon. Gentleman looks back over a couple of hundred years of economic history—the World Bank and others have produced good reports on that—he will realise that great patterns of globalisation are normally accompanied by big movements of people.

Mr. Clappison: The Minister has been generous in giving way. However, the problem with his argument is that, in 1997, as in 2007, many people wanted to move from countries where incomes were lower to this country, where incomes are higher. However, as soon as his Government came to power, they substantially increased the number of work permits—the number issued in 1997 has trebled, as was said in the House of Lords. That is not to do with change in the world but the Government policy of increasing the number of work permits and their decisions about the A8.

Mr. Byrne: I look forward to hearing the hon. Gentleman’s policy alternatives. However, he cannot ignore the fact that in the past 10 years the movement of people in the OECD countries and the industrialising countries has got faster. In the past 11 years, we have grown economically in every quarter, and that has gone alongside an increase in the employment rate. More jobs have been created in this country.

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