Immigration

Baroness Prashar Excerpts

Thursday 21st October 2010 Lords Chamber

[Baroness Prashar]

My Lords, I, too, thank the noble Baroness, Lady Valentine, for securing this debate. I welcome her constructive, balanced and creative approach to this very difficult and complex area.

The economic consequences of immigration and its effect on cultural identity and social cohesion have always invoked strong feelings. Regulations concerning immigration are frequently adjusted in response to changes in the economic situation or to accommodate shifts in public attitudes towards immigration.

The Government's pledge to lower the number of people coming to the UK from outside Europe and to introduce an annual cap on non-EU immigration is a response to such concerns. But this response is flawed, because the imposition of a cap to limit immigration from non-EU countries is not in the economic interests of the UK. It will send, and has already sent, a negative message to the very countries that we want to engage with. We have been warned of that by businesses, banks and lawyers, and we have seen articles in the Times of India and in Australia about this approach. The Law Society warned that the UK could lose large volumes of legal transactional work to other jurisdictions if we are not allowed access to the best talent in strong and emerging economies such as India and China, as well as in the USA and Australia.

Indeed, as has already been stated, Vince Cable said that if we are going to attract more investment from foreign companies, whether from India, Japan, America, Korea or wherever, we need access to high-level manpower. That has to be respected. As the noble Baroness, Lady Valentine, said—and as Vince Cable recognised—the dilemma facing the Government is in trying to reconcile two different objectives, one of which is to assure the British public that immigration is under control while the other is to have an open economy where we can bring talents from round the world.

The current approach seems to be playing to populist sentiments at the expense of the economic importance of what needs to happen. We have for some time operated a managed immigration approach and the current demand-driven scheme already affords adequate controls and meets employers’ real-time needs for specific skills. Attracting those falling within the entrepreneurial and investor categories cannot be separated from overall reductions in immigration levels. There is some empirical research showing that the two are interlinked. There is a link between trade and investment levels and immigration levels, which shows that stronger and more extensive migrant networks make it easier for would-be entrepreneurs and investors to invest.

In today’s global economy, which is becoming increasingly fluid, companies want labour to move with greater ease between jurisdictions. A cap could inadvertently prevent global businesses from moving employees with specialist skills. This concern has already been voiced by some large companies. On any grounds, a cap on the non-EU immigrants is not a sensible policy. It contradicts the Government’s commercially driven foreign policy and will not address the issues for which immigration ultimately acts as a proxy—for example, to deal with poor housing and the strain on public services.

Our managed immigration approach allows immigrants under those schemes to bring skills into the UK which are in short supply. Figures show that the numbers coming in have declined in any event, other than those coming in for the purpose of study. Yet increasing the number of international students should be welcomed because international students, as it has now been widely recognised, bring substantial income to our institutions and to the wider UK economy. UK universities receive approximately £30 million in fees, with a similar amount being spent on living expenses. In addition, there is income for our public and private sector colleges. Following the recent review by the noble Lord, Lord Browne, and the likely changes to higher education funding, this income will be even more vital in the future. It is unfortunate that, amid controversy over net immigration, an impression is being given that international students are in some way part of the economic and social problems. It is forgotten that international students have to pay—and prove that they can pay—the full cost of the education. They have no recourse to public funds and very limited entitlement to work.

With the changes introduced in March and August this year, the system is considerably tightened with restrictions on which institutions can offer which courses and who can come for what amount of time, with or without dependents. I would like to hear whether the noble Lord can assure the House that international students who come for a temporary period to learn, and who bring benefits in terms of trade, diplomacy and international relations, will remain outside any target for a reduction in net immigration. Will the Minister also tell the House whether the Government will reconsider their policy of capping, in the light of representations that they have had from businesses, bankers and lawyers and the responses that they have had to their consultation?