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Mr. Woolas: You’d do it anyway.
Damian Green: I am tempted, and, if the Minister heckles me, I will be tempted even more. I shall resist the temptation, but he knows very well that big new IT systems are wont to fail, and that many have failed in the early period. He clearly needs to ensure—and reassure the House—that the Government get this one right from day one.
As I said when we discussed the principle behind the increase, my fear is that the Minister is choosing the wrong way—a rather clumsy way—to slam the brakes on immigration numbers. We on this side have no objective in principle to charges or, indeed, to the over-recovery of costs, because we agree that those who benefit most from the immigration system—those who come to this country—should make a contribution over and above the actual recovery cost. However, we are equally clear that we do not want the UK to be seen as a country that turns turn away the brightest and the best from around the world, either by design or by accident.
There is a slight fear hanging over this whole process that that is how the changes might be interpreted in some parts of the world. I suspect that the Minister is as anxious as I am not to send that message, and I hope that he can give us some reassurance about the situation.
4.52 pm
Simon Hughes: It is a pleasure to serve under your chairmanship, Mr. Sheridan.
I always have some concerns about this kind of visa increase, first, because I have many constituents who are applicants to come into the UK, and I take up a high number of cases with the Home Office. Indeed, I believe that I have the largest number in the regular assessment that the Home Office makes. Secondly, there are many university students in North Southwark and Bermondsey at whole universities such as the London South Bank university, and at parts of universities such as Kings College, London and the London School of Economics. These matters are of real concern to people on my patch. I therefore just want to follow up the intervention that I made on the Minister, and on the points made by the hon. Member for Ashford by picking up briefly on the key issues in the debate.
I was not present for part one of this great dramatic performance, but if everyone who ever received a letter via me from a Minister, one of his colleagues, or someone in the Home Office, confirming their status—confirmed also by me or someone in my office who asked for confirmation of their status—was suddenly told when they presented it that it was not a valid document, it would mean that we have a much more complicated administrative system than we had all bargained for, and a much more expensive one. I hope that is not the case. I hope that a formal letter from the Home Office, as long as it is a valid letter, would be accepted as a valid letter, and that it could be kept and used on that basis. That seems a sensible and non-bureaucratic way of proceeding.
Secondly, there is obviously an issue as to quite what consultation was carried out with the universities’ representatives on the matters in their briefing. I reinforce their strong point about signals and messages, as well as the practical implications. Colleagues from the two other main parties and I had some exchanges with Ministers in the Foreign and Commonwealth Office last year about the adverse changes in funding for Commonwealth students coming to the UK for postgraduate study. It is a matter of concern across the parties that the FCO ended a certain programme. That sent out a bad message, particularly as we have been exhorting other countries, such as Canada, to be helpful.
Universities UK gave us some significant figures and stated that
“each non-EU student brings a net cash benefit of about £17,900 per year to the UK...each non-EU student brings a fiscal benefit of about £600 per year to the UK...each non-EU student makes a contribution to GDP of about £5,500 per year to the UK”.
That is a significant contribution, and we have done hugely well from having students from all over the world—the Minister knows that point absolutely because he was the president of the National Union of Students in his day. Students come from the EU, the Commonwealth, other English-speaking countries and elsewhere, make their contribution and go back, often as great ambassadors and links for the UK, whether in science, engineering and technology or in the arts and culture. Therefore, we must listen when university organisations tell us to beware the dangers.
Because the Minister said it, I know I am right in thinking that the increases are above administrative costs and are intended to put some money in the kitty to run the system, but my understanding is that some of it is intended to cross-subsidise one set of applications that is still charged below cost—the applications for a sponsor’s licence by a hospital, university or business. [Interruption.] I hear informal confirmation that that is the case and am grateful for it. There is thus a bit of cross-subsidy, and it would be helpful to know much will be spent on that to make up for the undercharging for that category of applications. Am I also right in thinking that is the only category that will now be charged below cost? If I am wrong, can we hear what the other categories are?
Perhaps the most important and sensitive point in a constituency such as yours, Mr. Sheridan, and mine and others, is that we are in danger of overcharging poor students from poor countries who are coming to the UK to fill our shortfall vacancies and gaps, and I would like the Minister to tell me whether I am right about that. The reality is that some of that money will subsidise, or at least reduce, the cost for people who end up being highly paid, so someone could come in as a student because there is a vacancy under the new system and under that market. I heard today that that is the case with dental nurses, so we are saying yes to dental nurses, who are relatively low paid and not at the top of the income scale. Is there not a danger that we will be getting them to pay above the odds to come to do a job for which we need trained people, and people doing highly-paid jobs will be supported by a hospital sponsoring somebody to be a doctor or a consultant, for example? There is a concern about poverty and equity that needs to be answered.
How much do the Government expect to raise each year from each tier? There are four tiers of applicant—1,2,4 and 5—and someone must know how much each is expected to raise. I understand that the money is going into the migrant fund but I am sceptical on three counts about that. I can see the argument for a fund that will specifically help in that area, but if it will be going towards paying for public services in areas where there are many migrants, contributions will be made only by people in those categories and not by other immigrants who might put pressure on services, such as those from within the EU. For example, I understand that health services in rural Lincolnshire, where a large number of EU nationals have migrated to the agricultural industry, are not being asked to pay because they could not do so.
The people we are discussing, however, would be asked to pay. Those using the services and putting the pressure on are not being asked to pay, yet some of the people who are not putting the pressure on are being asked to pay. Many of the people who will come under the Government’s new visa system will be young and healthy and will not use the public services very much at all. They are being charged a premium against the theoretical case that they might use our schools, public transport, education or health services, yet they might not actually be substantial users at all, certainly while they are young and in their general working life.
The Minister told us that there were robust debates about the whole regime—I remember them at one remove last year and the year before—and that various research was undertaken. What is the evidence, or where can we find the evidence, to show that we will not suffer competitively? I spent Friday evening with the principal of King’s College London, as King’s was hosting BBC Radio 4’s “Any Questions” to mark the 100th anniversary of its student union. There was a robust debate on the first question, about student fees, and it continued in the green room afterwards. Rick Trainor, the principal of King’s, was on the radio last week putting the balloon up and saying, “We want more fees, please,” but, knowing how sensitive the issue is, the Minister with responsibility for London, the right hon. Member for Dulwich and West Norwood (Tessa Jowell), and the Mayor of London robustly avoided describing exactly what the policy might be after the next election.
There is a real sense that we shall be in a competitive market. Fees in this country are not cheap, and adding extra stuff could act as a disincentive, so if our aim is to get the best people into the best universities to get the best reputations, is there not a risk that we will lose them to the States or Canada, or to institutions in Australia, New Zealand South Africa, or places such as India for technology or the European Union for other subjects?
Do the Government honestly have any view about whether the bureaucracy that will flow from the measure, particularly the extra £50 top-up, will be worth the candle? Sometimes, new systems and structures seem to be more complicated than they are worth.
The Chairman: Does Mr. Reid want to speak? I call the Minister.
5.2 pm
Mr. Woolas: I do not know whether you did that, Mr. Sheridan, for the benefit of my heart or that of my right hon. Friend the Member for Airdrie and Shotts. There are some very senior Members behind and, indeed, in front of me.
It is incumbent on me to answer the questions that have been asked, and I am grateful to hon. Members for asking them. First, I can provide the reassurance that the hon. Member for Ashford requires on the issue of the letter to MPs. We are talking about the issue of a certificate, not the normal letter of correspondence with an MP. In total, there will be about 3,000 pieces of paper: certificates that people ask for first, to prove, sometimes to an overseas Government, that they are not a citizen of the United Kingdom, so, typically, they will do so at an embassy in London, normally, in relation to property ownership matters; and, secondly, to provide for various instances to show that they are a citizen. In the normal course of events, the letter from the MP will not be covered by the measure.
There was a very real problem, but the hon. Gentleman unfairly described it as chaos. It was not chaos; it was an example of scrutiny at its best. However, all hon. Members were concerned about it, and we will make clear that point in the letter itself, which will advise the constituent that a certificate is the legal document. I hope that that satisfies the hon. Gentleman. I should just throw in the point—again, to provide reassurance—that, under the code of practice for the sponsorship certificate of an employer, a certificate is one of the documents that are covered, whereas a letter from a Minister or Member is not.
On the point that the hon. Gentleman and the hon. Member for North Southwark and Bermondsey made, I am happy to provide the research. Indeed, it is important to share the research, because there is much misunderstanding about the whys and wherefores—I shall return to the specifics in a moment.
On visa fees, the hon. Members for Ashford and for North Southwark and Bermondsey quoted Universities UK, which has said that there is a serious danger of sending out the wrong signal. I do not accept that, and will explain why. First, when we considered student fees, we were fully mindful of the danger. We considered several factors, one of the main ones being exchange rate changes and the countries of origin of students, to ensure that the recent changes are not detrimental—in fact, the changes are beneficial to students.
Secondly, the tuition fee is the more important financial contribution. My right hon. Friend the Member for Coatbridge, Chryston and Bellshill was involved in the debate on the introduction of full-cost overseas student fees, which were opposed by all Labour Members and many Conservative Members, whose Government introduced them. The fear then was that students would put off, but in fact the opposite happened, for various reasons, including the credibility and status of universities in the United Kingdom.
Thirdly, we made international comparisons and looked at the visa fees for Canada and the United States, and even after our increases, the position here is better. Fourthly, a general point is that the visa fee is a small proportion of the total cost, and it is not a key determinant in an application. Other changes have been made to help universities attract overseas students, because they recognise their value. For example, students on a course of more than three years—the visa covers only three years and some students, such as those studying dentistry, take a longer course—are no longer required to reapply for a visa, because their visa covers the length of the course. We can do that, because we have sponsorship mechanisms in place to provide some assurance that the student is a student and has not absconded. That has also been introduced with the private sector universities, and it provides benefits for them as well as for us.
Simon Hughes: The Minister has said that the Government’s comparisons show that we are in a better position than others. Was he talking about the fee costs of a course, the visa costs of an application or the cumulative effect of both? Is there a table that a student who is considering studying in the EU or the Commonwealth can see that shows the combined cost of coming to the UK compared with that of studying in Australia or elsewhere?
Mr. Woolas: I was referring to the visa fee. For the record, Universities UK considered increasing student tuition fees, but there is a danger of sending out a signal to the rest of the world that we do not want such students. I was talking about the visa fee, and the decision on that is taken in isolation from the overall tuition fee, although I recognise that universities will want to take that into account. The Government cannot yet provide a full table with tuition fees, although I see the value of the hon. Gentleman’s suggestion of putting the visa and tuition fees together, because they are different for different courses. I hope that that satisfies him.
The hon. Member for Ashford also made a point about IT. Last week, the Home Affairs Committee probed me and officials in some detail, and I can provide the reassurances that he seeks. We have brought in the new rules under tier 4 as from 31 March in advance of the freshers period and the major intake of students. The IT is up and running successfully. We have been working very closely with Universities UK and the private and voluntary sectors, and we now have sponsorship arrangements in place, so the colleges and universities are registered.
We have provided that period to ensure that we can work the system with them. Indeed, we have received acknowledgements, which I gave to my right hon. Friend the Member for Leicester, East (Keith Vaz), the Chairman of the Home Affairs Committee, from universities. Newcastle university, with which we have been testing, has provided us with commendations on the introduction of the IT. I am determined to avoid the situation that the hon. Member for Ashford talked about, namely one in which the IT does not work.
We think that there are many benefits. We believe that those institutions that are not genuine colleges and that do not provide genuine courses will be exposed by the new system to the benefit of the United Kingdom as a whole. As hon. Members will know, abuse of student visa overstay is one of the more significant abuse entries into the country, if I can use that phrase.
I have tried to answer all the questions. The hon. Member for North Southwark and Bermondsey raised the point of the general principle, which is also about subsidy. Let me explain where the measure fits in. He asked a very pertinent question which, indeed, I asked myself in preparation for the debate. We estimate the total cost of administering the service for which fees are provided by UKBA in 2009-10 to be £566 million. In addition to that, our policy is that we can raise £100 million, plus the £35 million for the migration impact fund. There is some cross-subsidy in that some of the fees that we charge are below the cost of charging that fee. That includes the student fees, because we recognise the benefit that the students bring to UK plc, which he described.
For other things, such as those referred to in paragraph 7.8 of the explanatory notes, the fee is set at or above cost. A highly skilled migrant worker under tier 1 will be charged more than cost, which will subsidise the administration of those who are charged less than cost, including, for example, students.
Our policy is in line with the hon. Gentleman’s point of principle. If he will allow me, I will provide him with the tier-by-tier figures by letter. I am afraid that I do not have them before me, because in the second half of the debate, we have been debating only the above-cost fees. Rightly, Parliament said that we had to come back for an affirmative resolution on them.
Mr. Adam Holloway (Gravesham) (Con): Did I hear correctly the figure of more than £500 million to run the scheme? Will the Minister tell us how it can be such an enormous sum?
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