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Statement of Changes in Immigration Rules

My Lords, this statement of changes in Immigration Rules makes a number of changes to those rules and sets out the second set of changes to the rules governing the student immigration system in tier 4 of the points-based system. The tier 4 changes include restricting permission to work during studies for students applying for entry clearance or leave to remain and a restriction in the entitlement to bring dependents, partners and children into the UK. The statement has been brought to the special attention of the House by the Merits Select Committee in relation to the tier 4 rules. I wish to express my great thanks to that committee for its work in relation to this statement. The House may recall that the Government earlier published a statement of intent, setting out the full planned changes for the student immigration system. However, that statement was laid without the impact assessment for the changes and the committee identified significant gaps in the analysis of the consultation responses. The Government have now laid the impact assessment for the reform of tier 4 of the points-based system. The impact assessment says that the Government intend to reduce abuse through the immigration system and to reduce net immigration significantly. The impact assessment sets out the policy objectives as being to, "““Reduce the areas of the student route that are prone to abuse … Reduce net migration overall by the end of the current Parliament … Improve selectivity of students to the UK, to ensure they are the brightest and the best … Restore public confidence in the immigration system … and … Ensure that the system is robust and practical to enforce””." The Opposition have consistently set out their concerns about the impact of this policy. The UK has a worldwide reputation for providing quality education to overseas students. My understanding is that we are the second most popular student destination in the world after the US. Overall, the international student market is estimated to be worth £40 billion to the UK economy. There is very real concern about the impact of the Government’s actions on this very important economic sector and the reputation of the UK generally. I hardly think that the current state of the economy lends itself to being the Government being so cavalier with such an important part of it. Apart from the matter of principle and the potential damage to the UK economy of the Government’s approach, there is considerable uncertainty about the likely impact. In March 2011, the estimated impact on student numbers suggested a reduction in student visas of between 70,000 and 80,000, and yet the impact assessment suggests a reduction of 232,000 over five years from 2011 to 2015 against a total estimated baseline of 558,000. Quite understandably, I suggest, the impact assessment states: "““There is a great deal of uncertainty around the expected path of student visa demand””." The analysis of the risk identifies that estimation of the impact, "““is not straightforward, and is subject to error””." Not surprisingly, the Merits Select Committee says that, "““given the objective of reducing net migration, the Committee would have expected to see a greater analysis in the IA of the numbers of students who leave the UK at the end of their studies and those who remain””." This is a very important consideration when looking at the overall impact of the Government’s policy. I would be grateful if the noble Earl would respond to that. On the costs and benefits, which is another important factor, the committee points out that the impact assessment, "““estimates the total costs for the changes to student immigration system as being £3,558 million, with the total benefits being £1,119 million … At over £2.4 billion, the estimated overall cost of the package of changes is significant, and the Committee reiterates that it is unacceptable that the IA was not made available when the first tranche of changes were laid before Parliament””." I hope that the noble Earl will be able to acknowledge that and give some reassurance that this will not happen again, given my own expectation that the Government will produce a number of further changes to the Immigration Rules in the future. I would also like the noble Earl to respond to the point about the cost to the UK Border Agency itself, which I understand is included in the figures I have just quoted. The committee states: "““In terms of direct costs and benefits, the IA estimates that over the four year appraisal period UKBA will receive around £160 million less in fee income … This is a significant reduction in fee income at a time of budget cuts for UKBA. Although the IA also says that there will be a saving of around £150 million in processing costs, it is not clear whether this is actually a cashable benefit … The IA also estimates that over the four year period, tuition fee income will fall by approximately £170 million … However, this is based on the assumption that for every ten non-EU migrants no longer able to study at all affected institutions, eight of their places would be filled by either EU of British nationals””." In the current circumstances, I would have thought that that is a very significant assumption. No wonder the impact assessment acknowledges that the estimate is ““relatively uncertain””. I have no doubt that the noble Earl will wish to respond to these concerns about the reliability of the figures. We would also ask him to respond to the point raised by the committee that, "““it is not clear from the IA how the findings from the consultation have fed into these estimations””." This is not the first time that we have had to debate the Government’s reluctance to spell out the consultation and the way it has influenced the Government’s decisions. The committee gives an example of this when it states that, "““the estimation of costs to educational establishments would benefit from input from such bodies. This is regrettable as the Government presumably received some useful information given that the consultation specifically asked about the main advantages/disadvantages of the changes, including any financial impacts””." A cynic might say that the Government did not like the result of the consultation, and that is why they have not been very open about it. I am not cynical, but I would like the noble Earl to respond to that point. Of course, overriding the questions raised by the Merits Select Committee is a deep concern shared by many noble Lords about the general policy. This country has enjoyed a fantastic reputation for the quality of its education. Thousands upon thousands of young people in particular, but not just young people, have come to our shores. Most have gone back home, but they have retained links with this country and their educational establishments. The reputation of this country has been strongly enhanced, together with a huge amount of inward investment. I still fail to understand why the Government do not recognise the potential damage they are doing to these establishments and to the economic benefit of this country. The fact is that when it comes to bogus students and bogus colleges, the previous Government had already taken decisive action in that regard. The suspicion remains that the Home Office, desperate to meet the quota it set, charged ahead on this because it thought it would be easy to do, coupled with the weakness of the business department to defend effectively the interests of educational institutions. That is why we have this policy which, in my view, is a disastrous one. I end by quoting Jonathan Portes, director of the National Institute for Economic and Social Research: "““The government has said that economic growth is its top priority and the economy needs to rebalance away from consumption and towards exports””." But as Mr Portes said, the Government have here produced, "““a policy that will have a significant negative effect on growth and reduce exports””." Why on earth have the Government gone down that route? So here we are, with the outcome of a flawed policy, poorly executed, with inadequate information for Parliament which will do considerable damage to our economy and our educational institutions. I would remind the noble Earl of the publication yesterday of the top 100 universities. A remarkable number of UK universities are in the top 10 and in the top 100—including, I am glad to say, my own Birmingham University. Why are the Government putting that at risk? We demand those answers, and I hope that the noble Earl will be able to respond today.