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The Merits Committee has drawn this order to the special attention of the House on the grounds that it gives rise to issues of public policy likely to be of interest, and I was rather hoping that the chairman of that committee, the noble Lord, Lord Filkin, would have been present to spell out exactly what those issues are. The only one that is implicit in the committee’s report is that the Government have not provided enough information about the points-based system and the sponsorship proposals to which the fees are to relate. But the order covers the power to charge fees not only for services provided to sponsors for the issue of a licence to a sponsor, who is either an employer or an educational establishment, but to further classes of individuals who are applicants for entry clearance, transit visas, BIDs, and certificates of entitlement for the right of abode. The Explanatory Memorandum states that no regulatory impact assessment has been produced for this order, because that will be done before the further order, mentioned by the noble Baroness, setting the level of fees to be charged for the applications and processes specified here is made.
It would be useful to know whether the Merits Committee looked at the debates we had on the previous orders made under the Immigration, Asylum and Nationality Act—the Immigration and Nationality (Fees) Order and the regulations that followed, and whether some of the committee’s concerns were similar
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- “those who benefit most from the immigration system should pay proportionately more towards the end to end costs of the system”,
but the unfettered discretion given to the Secretary of State means that departures from the principle are not subject to any democratic control. When they imposed huge increases in the fees charged to spouses, who do not necessarily get any economic benefit from coming to the UK to join their partners, our complaints to the Government fell on deaf ears.
In the debate on that fees order, we did at least have details of the amounts that were to be charged under the regulations, but this time round we have no information about the amounts proposed to be charged. It may be considered that the employers’ organisations and Universities UK are capable of looking after their own interests, and perhaps they are. But it would be rash to assume that because UK institutions of higher education have been attractive to overseas students in the past, they will continue to receive the same numbers of applicants if the amounts they have to charge to cover these new arrangements need to be increased sharply. The cost of the licences will have to be recovered, and so will the cost of the certificates of sponsorship issued to each individual prospective student; and since the certificate itself is not a guarantee that the applicant will be granted an entry certificate, the amount the university will need to add to the standard overseas student fee will be more than the cost of the certificate plus an allocated proportion of the licence fee.
I have spoken to Universities UK, which has been pressing for information about the new points-based system and its costs, and would welcome fuller disclosure. The first point Universities UK made was that the BIA should obtain a list of subscribers directly from the Quality Assurance Agency rather than requiring every individual higher education institution provide evidence of their subscription.
Secondly, it draws attention to the level of fees that are likely to be paid by a typical higher education institution, which has to cover three tiers of the new system: tier two for skilled workers with a job offer, replacing the present work permits; tier four for students; and tier five, which it says would apply to academic visitors and sponsored researchers. The sponsor registration fee is £1,000; the tier-two employee certificate fee is £200, and if there are 90 staff subject to immigration control, then by the calculations of Universities UK—which are not definitive because the actual amounts
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In the second year, with tier four in operation, and if there are 2,500 international students at £20 each, that would come to £50,000. To save time I will not go through the rest of the calculations. If the Minister would like to have a look at the memorandum that I had from Universities UK, I should be glad to pass it over to him, but perhaps his department will already have heard from it and will know that its anxieties on this score remain to be satisfied.
As I said, these are not insignificant costs but of course they also involve an extra administrative burden. The universities are already undertaking much of the work that the BIA would otherwise have to undertake itself in the Student Batch Scheme, under which they check the credentials of students who apply for extensions of leave to remain. At the same time, they are being encouraged to take on more international work—for example, through the Prime Minister’s Initiative on International Education and the UK-India Education and Research Initiative—and indeed they have to do so to earn the fees to make up for cuts in government funding.
We are anxious that all these activities, and the substantial contribution that higher education institutions make to our overseas earnings, should not be jeopardised by a hard-nosed approach to recovering all the costs of the points-based system from users, and the universities in particular. That would be to ignore the intangible benefits that we get from overseas students coming to the UK. They pay indirect taxes, which surely must amount to far more than the fees, and they bring cultural and human value to the higher education institutions to which they belong and to the British students who interact with them. There does not seem to be proper recognition and acknowledgement of these benefits in the arithmetic; nor do the Government take account of the enormous problems that will be imposed on HEIs, which have to set their budgets for several years ahead but still face wide uncertainties around the introduction of the new system and the costs that they will incur.
I am not certain whether Universities UK was sent the letter which described itself as a “short, targeted stakeholder consultation”. It was notified to the recipients by e-mail on 24 October and had a response date less than three weeks later. I should be grateful if the Minister would enlighten us on that matter. If it did, the BIA should have explained that this was the only exercise of its kind that it was conducting, because the term “consultation” is a term of art which technically means a process that lasts for 16 weeks and is open to responses from the general public and not simply from the targeted addressees. In fact, it would be useful if the Minister could inform your Lordships who received this communication and how they were selected.
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I mentioned the Chinese community in the previous debate and I should interpolate a note on them here. I had a telephone message from them this afternoon saying that they were not in receipt of this consultation from the BIA, in spite of the fact that they were assured all the way through the proceedings on the Immigration, Asylum and Nationality Act that they would be fully consulted before any of these changes were introduced. I ask the Minister how on earth the department came to leave out Christine Lee of the Chinese Community Association, or how the BIA managed to do it on his behalf.
The BIA says that licence fees for sponsors of tiers four and five will be set at or below cost-recovery level. That is welcome as far as it goes, but it threatens to make the charges for certificates higher to achieve a balance so that overall, presumably, the total cost is recovered. One way or another, institutions of higher education and others will have to raise their charges to overseas students. I should be grateful if the Minister could say whether it is the policy intention that universities should be allowed to increase their charges to cover the amounts that they have to pay under this order.
Turning for a moment to the individuals covered by the order, they have no powerful advocates to represent their interests and, as we have seen, it is the people who are not going to make a loud noise who are likely to be picked on for overcharging under the 2006 Act regime. In the previous round, the total charges imposed on a spouse were more than doubled to more than £2,000 by the time that he or she obtained citizenship. The fear is that similarly excessive amounts will be charged under this order, particularly for BIDs, that every migrant staying in the UK for six months or more will have to pay whether that person is a student, a worker or a relative coming for settlement. That will be on top of whatever the migrant has already paid to get into the country, and there are no exemptions, or even discounts, for a person coming from a poor family in a third-world country.
5.45 pm
In its November report on the results of the consultation on the prevention of illegal migrant working in the UK, the BIA said that it will be consulting shortly on the rollout of BIDs. Does that refer to the letter that I have already mentioned? As far as I am aware, no such consultation has been launched, and I would like to know what the target date would be. Is the consultation going to cover the charges, bearing in mind that in the previous consultation on the charging regime for immigration and nationality fees, no mention was made of BIDs? These documents are not being issued in order to endow the holder with any rights or privileges he did not already possess but in order to enable the authorities more readily to apprehend and remove those who are not entitled to be here. It is also avowedly being used as a trial run for national identity cards, as the Home Office’s regulatory impact assessment on the UK Borders Act openly stated. It is surely unreasonable to load the start-up costs on to migrants who are less able to afford them than the settled population. In fairness, the initial capital expenditure should be apportioned over the total adult population.
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It is unfortunate that these orders are being slipped past us by the Home Office when we have only part of the picture, as it did with the previous set of charges in March. We understand why it is doing that; it is to minimise the criticism and to ensure that when the charges are specified in a subsequent order it will be too late for Parliament to have any influence on the charging regime. We say, as we did then, that the manner in which this is being done—minimising the area of debate once we do get firm proposals on the timing and amounts—is not transparent and is not consensual governance.
Lord Dearing: My Lords, I had no intention of contributing, however briefly, to this debate, but having listened to the noble Lord, Lord Avebury, I would be grateful if the Minister could say anything to clarify the quantum of money at stake. Attracting overseas students is a highly competitive business between nations. For example, the Australian Government are very active in supporting their universities to attract overseas students at little cost to the universities. Germany is immensely active in this, and other countries are too. It would be helpful to know the extent to which this is a major source of overseas earnings and contributions to the Exchequer through indirect taxation, as the noble Lord, Lord Avebury, said. Because of the value of this form of overseas earnings to the United Kingdom, I regard as a material issue the extra costs that will fall on the university community as a whole and on students from overseas.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Baroness, Lady Hanham, for her contribution; to the noble Lord, Lord Avebury, for his rather longer contribution; and to the noble Lord, Lord Dearing, for his comments and questions. I thought that this was a modest and perhaps slightly boring order, but it has elicited more interest than I anticipated. That does not mean that these issues are not serious—they are—and the noble Lord, Lord Avebury, always raises them in a courteous and proper way and asks many useful and valuable questions. I now have a wodge of answers, but if I cannot successfully thread them together this afternoon, I shall answer them in more detail in correspondence.
I shall first deal with the points raised by the noble Baroness, Lady Hanham, about the legislative authority for this and the date at which we might bring forward a fee regime. The legislative provision for sponsorship appears in the immigration rules which we introduced under powers obtained by virtue of the Immigration Act 1971. No additional legislation is required to introduce a sponsorship scheme but we made clear at an earlier stage that that is what we were embarked upon. We believe that a sponsorship scheme will encourage responsibility among employers and those who seek to benefit from migrant workers coming here. It will also encourage greater responsibility in the education sector, where there have been examples of abuse. We need do much more to ensure that people who genuinely come here benefit from our education system.
I recognise the noble Lord’s point about the value to our education institutions of overseas students. The Government have been very proactive in this field because we recognise that we operate in an aggressive
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The noble Baroness, Lady Hanham, asked about the date on which fees will be set next year. I cannot give a precise date. We are following parliamentary procedures and we must work within the legislative framework. We must have the power to set the fees early next year and we will make the regulations using any additional legislative powers necessary to set those fees. At that point there will be an appropriate opportunity for a full parliamentary scrutiny of the fee proposals. They will be subject, of course, to the affirmative procedure in both Houses.
Lord Avebury: My Lords, one of the main points I made was that because of the procedures involved in these orders, as with the previous ones that we debated in March—I think the noble Lord replied to that debate as well—the House has to agree, first, that the charging should be made and, secondly, that the order is produced which sets the level of the charges. By that time it is too late, is it not, for Parliament to do anything about it because it can only accept or reject an order which is presented to it under an affirmative resolution?
Lord Bassam of Brighton: My Lords, I accept the point that Parliament is guided by the procedure. Before we get to that point, of course, we endeavour to consult. The noble Lord, Lord Avebury, made a strong pitch on the consultation issue. The consultation with stakeholders ran from 23 October until 9 November. A consultation document was sent to more than 493 people and stakeholder groups, including Universities UK, and I am more than happy to set out the details of that in correspondence. We received 132 written responses; 92 educational establishments, 17 employers and 23 arts and entertainments responses were received. We received a further 31 responses after the official closing date for the consultation. We took the pragmatic view and accepted those responses even though they were late.
We also held a number of consultation events which were attended by representatives of the education, employment and arts and entertainments sectors. We are particularly mindful of the arts and entertainments sector because we have been advised in the past of the difficulties which festivals in particular can experience when putting together their programme with foreign performers coming to this country.
I cannot accept the allegation made by the noble Lord, Lord Avebury, that our visa regime and the cost-of-entry clearance put off genuine students, or that that regime damages our international competitiveness. The Home Office and UKvisas have done a great deal to support educational exports. Our visa provides working entitlements far more generous than those of competing study destinations such as Canada, Australia and the
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I am grateful to the noble Lord for drawing to my attention the Universities UK calculations on impact. We are working with key stakeholders, including Universities UK, to develop fees that are fair and proportionate. We shall continue that work, obviously to the point at which we bring forward our order.
The noble Lord, Lord Avebury, asked whether there would be any changes to the visitor category requirements or other consequences for sponsorship for visitors. We will shortly publish a public consultation on visitors. That consultation will examine visitor routes in general, because that is something that the points-based system does not cover. It will include provisions relating to family visitors. Visitors will always need to satisfy the entry clearance officer of their intentions and their compliance with immigration laws at point of entry. We aim to keep migrant fees at broadly the same level as their comparative existing fees—that is our policy. The aim is that people moving from the current system to the new points-based system should not ultimately see too big a change.
The noble Lord also said that we had carte blanche to charge whatever we wished: I do not agree. Those fees are set out in regulations. Where they are above cost recovery, they must be debated fully in both Houses, so there is ample opportunity to challenge our approach. He also asked for some response to the Merits Committee and its desire to see more information on sponsorship. We have published a statement of intent on sponsorship with more detail, and copies are available in the Library and on the BIA website. The noble Lord made further points about consultation. I think that I should provide the noble Lord with more details, in particular on the consultation on bids and its implementation. I will set those out in correspondence to the noble Lord and provide them also to the noble Baroness, Lady Hanham.
The noble Lord also asked whether it was intended that universities should be able to increase their fees to cover sponsorship. Ultimately, it is a decision for the universities, particularly those that are mindful of their competitive position. They will decide how to set fees and whether to pass on costs. As I see it, the fees for students will be kept at a modest and moderate level—that is certainly our intention.
Some of the other, more complex issues that the noble Lord raised I will deal with through correspondence, because I am not confident that I have all the answers with me.
Lord Avebury: My Lords, before the noble Lord concludes, can he say whether the 493 organisations that were consulted about the order included the Chinese and Bangladeshi restaurants that I mentioned?
Lord Bassam of Brighton: My Lords, I do not know whether that was the case, but I shall certainly find out and let the noble Lord know.
On Question, Motion agreed to.
- House adjourned at 5.57 pm.
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