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Statement of Changes in Immigration Rules

My Lords, I thank the noble Lord, Lord Hunt, for the opportunity to debate this Motion. A large number of points have been raised. I am eager to deal with the issues to which they give rise but clearly I shall have to deal with most of them in writing, as noble Lords have been quite wide-ranging. The Motion before us deals with changes to tier 4 of the immigration system covering international students. The issue at hand is how the findings from the consultation have fed into the development of the policy and the estimates of the costs and benefits of the changes. When the noble Lord, Lord Hunt, started, he told us about the importance of overseas students. He is, of course, quite right and I absolutely agree with him, but only in respect of genuine students who have come here to study at our world-class academic institutions. That is why we are devoting our attention particularly to the private education sector, where there is much abuse, although we are doing well to reduce it. However, I am at one with the noble Lord regarding universities. He will know that they enjoy considerable advantages under our policies. For example, we have introduced flexibility into universities on the English language requirements, on the ability to work and on the ability to bring in dependants. The noble Lord, Lord Hunt, talked about loss of income from the UKBA. Although there will be a reduction in fees paid to the UKBA, the agency has made allowance for this in its business planning. I hope that he agrees that the UKBA exists to keep our borders secure and not just to turn over visa fees. He claimed the credit for the previous action to deal with bogus students but the previous Government only started that and left this Government with considerable work to do. The noble Lord referred to the 35th report from your Lordships’ Merits Committee, which states that: "““The Committee regrets that it is not clear from the IA or the Explanatory Memorandum how the findings from the consultation have fed into the development of the policy or the estimates of the costs and benefits of the changes””." Your Lordships will recall that the House debated the first set of changes to the student route on 16 May. At that time, the impact assessment for the student changes had not been published. However, the impact assessment for the changes to the student route was published when we made the second set of changes on 13 June. I reiterate my previous reassurance that we are quite clear that it is right and proper to provide the Merits Committee with the information necessary for it to do its job. However, the issue having been raised, it would be remiss of me not to put this again in the context of the previous practice in this area. While it is generally accepted as good practice, there is no legal obligation for the UKBA to consult on changes to the Immigration Rules. In March 2010, the previous Government made significant changes to tier 4—the student route—without a formal public consultation. Despite taking the views of key partners, they did not publish any formal explanation of the findings. Similarly, in March 2006, following consultation, the previous Government published their policy for a points-based system but did not publish the 517 consultations that they received. I am satisfied that this Government have gone to great lengths to seek the views of the public and of the sector, and to take account of these views in developing our final policy. On 23 November 2010, the Home Secretary informed Parliament that she intended to hold a public consultation on reforming the student visa system. This process began on 7 December, when the Home Secretary announced our proposals and the consultation paper was published. The consultation ran until 31 January 2011—shorter than a standard 12 weeks but that was in order to announce decisions at a time that would allow the sector and students to plan for the following academic year. Our consultation received over 30,000 responses—10 times as many as the consultation on economic routes—and officials spoke to representatives of over 200 institutions during the consultation period. On 22 March, the Home Secretary made a full statement in the other place setting out the detail of the Government’s decisions, and the public reaction and data that had informed those decisions. On 31 March, we published a detailed statement of intent describing the full policy package and lay changes to the Immigration Rules to implement the first changes resulting from the consultation, which came into effect on 21 April. On 13 June, we lay the second set of changes to the Immigration Rules and published the impact assessment. It is true that, like the previous Government, we have not published every consultation response. As I mentioned, there were over 30,000 responses online and over 200 longer written responses. We published a summary of the online responses to all questions asked and answered in the consultation. We also indicated the level of support in relation to every response. We felt that this was helpful information for Parliament and interested parties to have. The government code of practice on consultations states that: "““Following a consultation exercise, the Government should provide a summary of who responded to the consultation exercise and a summary of the views expressed … Consideration should be given to publishing the individual responses received””," but, in this instance, the volume of responses made that impracticable. The level of response demonstrates a high level of public engagement with the policy development processes. The changes that we have made to our final policy show that we have genuinely listened to and taken account of the views expressed. For example, we initially proposed raising the minimum level of English to an upper immediate level and required secure English language tests for all students. This received a clear, negative response from institutions, who indicated that pre-university pathway courses provided a vital route for international students to access our world-class universities. We initially proposed that all students should have to return overseas on completion of their course. Some 92 per cent of respondents disagreed with that proposal and the final policy instead puts a maximum limit on the time students can spend in tier 4. We proposed a wide reform of students’ permission to work and again received significant negative feedback, with 85 per cent of respondents against the proposals. Instead, we have retained the previous system in the most compliant sectors while removing permission to work in those sectors where we account the most abuse. The impact assessment shows that we expect the full set of reforms to lead to a cumulative net reduction of around 230,000 migrants to the end of this Parliament, 2011-15. Once all changes have been implemented in 2013, we expect a reduction in net migration numbers of around 60,000 a year. However, it is important to note there is not a one-to-one relationship between the number of visas issued and the level of net migration. The volume of visas is larger as it includes students coming to study for less than 12 months. Once the system is fully implemented, we estimate that there will be around 70,000 fewer student visa grants a year and around 20,000 fewer visas issued to dependants each year. In addition, closing tier 1 post-study work in April 2012 but retaining a route into skilled, sponsored employment through tier 2 should result in 20,000 fewer each year staying in the UK to work. As a result of the transitional and full effects of the policy, we estimate that there will be around 260,000 fewer student visas granted and around 100,000 fewer visas issued to dependants—a total of 360,000 fewer by the end of this Parliament. In addition, closing tier 1 post-study work in April 2012 but retaining a route into skilled, sponsored employment through tier 2 should result in 80,000 fewer staying in the UK to work but with 25,000 fewer dependants by the end of this Parliament in 2015. On costs and benefits, the noble Lord, Lord Hunt, referred to the financial considerations. The impact assessment shows that the changes are estimated to have a net cost of £2.4 billion to the UK economy. We estimate that the policy proposals will lead to £1.1 billion of benefits but £3.6 billion of costs, of which £840 million is savings to public services. However, the noble Lord will be aware that a significant proportion of this impact results from less work being done by students, post-study workers and their dependants, whether this work is legitimate or not. The impact would be lower if some of this work is instead done by non-migrant workers. We have commissioned the Migration Advisory Committee to look into this. The MAC has access to the appropriate economic expertise. In the mean time, we have costed a worst-case scenario. The institutions that will no longer be able to recruit migrants will lose fee income but our view is that the policy strikes the right balance between support for British educational institutions and the need to reduce migration to manageable levels and cut out abuse of the student route. The committee has recognised the difficulty in estimating likely costs and benefits. The impact assessment drew from a range of sources but did not specifically draw on the consultation responses. Other, more established data sources were used as they were more likely to be representative of a diverse sector. I would not want the House to think we are dismissive of the Merits Committee’s comments. The Merits Committee provides an invaluable service to Parliament and the public, and we have taken on board its comments in the spirit in which they are intended. I reassure the chairman, my noble friend Lord Goodlad, that the Home Office will always be happy to provide the committee with more information wherever it is possible and reasonable to do so. Ministers will work hard to ensure that that happens. The noble Lord, Lord Hunt, asked how the consultation responses were incorporated into the students’ IA. Very few of the consultation responses provided information directly relevant for the numbers in the impact assessment. Most responses focused on the policy itself. Of those that did, they either confirmed the uses of sources already used or were judged to be unrepresentative of a diverse sector. The noble Lord suggested that the numbers differed from the Government’s earlier estimates. There are indeed differences between reductions in net migration and reductions in visas. We estimate that in 2013, once all changes have been implemented, there will be a reduction in net migration of around 60,000 a year. For the same year, we estimate a reduction in visas and in-country grant of around 70,000 for students, 20,000 for post-study workers and 30,000 for dependants. My noble friend Lady Hamwee asked about low-risk countries. The UK Border Agency does not base decisions on the nationality of the applicant. All applicants are judged against objective measures. Low-risk nationals are given a streamlined process, but the underlying criteria remain unchanged. My noble friend Lord Avebury asked about student visitor extension to 11 months and whether this creates a loophole. The student visitor is a secure route. The UK Border Agency officials, both overseas and in the UK report, retain the right to refuse any student visa application on credibility grounds. If they believe that the applicant does not genuinely intend to study—and we will monitor closely the numbers of students making use of this extension—they will take action at signs of abuse. We plan to decide the future of the route once it has been operating for 12 months. My noble friend Lord Avebury asked about the management of the UKBA. The Home Office has made a recent change to bring the strategic immigration policy back within the core Home Office. My noble friend Lord Avebury reminded us that fee increases made it hard for students to make ends meet, or words to that effect. However, he will be aware that overseas students are expected to be able to provide for themselves without working. Paid work is only to supplement this and to give them experience of UK life. My noble friend also asked why we are asking the QAA and the Independent Schools Inspectorate to inspect private colleges, and whether we will reinstate the British Council or Accreditation UK. We did consult on a new inspection regime. Under tier 4 we have seen that the level of compliance has been closely aligned to the type of institution, with far higher rates of abuse to be found in the privately funded sector, with up to 26 per cent of students found to be non-compliant in one study. The previous system was based on accreditation by sector bodies, and this has proved to be inadequate. Therefore we are moving to a system of more rigorous inspection carried out by fully independent bodies that have previously inspected the sectors with the highest levels of compliance, namely the public-funded providers and independent schools. The ISI’s framework and standards have been scrutinised by Ofsted to ensure that they are appropriate and rigorous. We do not plant to reinstate Accreditation UK or the other accreditation bodies. Noble Lords have made several other points. As I have already indicated, I will respond to them in writing. I reiterate that the Government have gone to great lengths to seek the views of the public and the sector, and to take account of those views in developing our final policy. In the light of this thorough approach to consultation and an explanation of our calculations, I hope that the noble Lord, Lord Hunt, will feel able to withdraw his Motion.