Baroness Smith of Basildon
Main Page: Baroness Smith of Basildon (Labour - Life peer)Immigration and Nationality (Fees) Order 2015
Baroness Smith of Basildon Excerpts
Baroness Smith of Basildon (Lab)
My Lords, I thank the noble Baroness for her explanation of the order and the information she provided. It is helpful to have the outline. She will be aware and will know from debates we have had previously on the Bill that we support the principle that the Home Office’s costs and visa costs should be borne by those who are using the service. I make it clear that we support the order before us today. We were clear in Committee and during the passage of the Bill. I think there is further detail to come on the levels of charging.
However, I have some questions. I have been working through the impact assessment and the consultation document trying to work things out, and if the noble Baroness can give me some clarification it will be helpful. It in no way changes our support for the principle but I think there are always three things. First, there is principle, which we have signed up to and fully support; secondly, there is the detail and how it works in practice; and thirdly, the political purpose and the impact. It is the detail and the impact that I particularly want to ask her about.
One of the things I could not quite work out from the documents I had was how the maximum costs have been calculated. What was the evidence base and how was the assessment made to come to those figures? I appreciate that the Government recognise that there is a different impact on different kinds of immigration and the different categories, but what was the basis for setting the levels? I have been looking at them to see how they were ascertained and for the impact on, for example, the tourist industry, which is singled out in the impact assessment.
The Explanatory Memorandum says that responses were,
“broadly supportive of the proposals”.
It is right that they were broadly supportive of the principles behind the proposals, but some questions were raised, particularly from the universities regarding the impact on students and from some employers regarding the impact on their businesses. It would be helpful to know what points came up in the consultation that the Government were able to respond to and make changes in the statutory instrument to address.
I have one issue. All these things have to be evidence-based, and in the language and rhetoric we use we would always want to be fair to everybody, including those concerned about the impact of immigration and immigrants themselves. However, on the issue of other key non-monetised benefits from the main affected groups, page 2 of the impact assessment says:
“If some migrants decide to leave the UK, there may be some wider benefits in terms of improved social cohesion, reduced congestion and transport costs”.
It says that these are “expected to be negligible”, but it sounds like they were digging around to find something non-monetised as a benefit. I am not sure that its tone and lack of evidence base—“basically, if some foreigners leave there will be increased social cohesion”—is the kind of thing we should be seeing in an impact assessment in such a subjective way. Unless the Government can provide evidence to that effect I am uncomfortable with that being in the impact assessment.
We are looking at all the evidence here. I want to draw attention to page 5 of the impact assessment where the point is made that:
“Potential changes to the immigration system, and the inexactness of projection methods, mean that application forecasts are not considered to be accurate over a ten-year period. Impacts are therefore assessed over a five-year period”.
There are some questions about how robust the information is.
It was interesting to read the comments on page 6 about the impact on application volume. The Government quite rightly recognise, as it states there, that:
“The UK competes with other countries for tourists, students and workers, thus it is possible that increasing fees in the UK may encourage substitution effects in that applicants may apply to other countries or may not apply at all. The impact of raising fees stems primarily from the deterrence of potential migrants from entering the UK”.
The Minister will be aware from the number of discussions that we have had, particularly on the Immigration Bill, of how nervous the universities are that potential university students, who pay fees and contribute to the economy—and who are unfortunately included in the Government’s net migration statistics—may be deterred from coming to the UK. This is recognised in the document, which continues:
“The analysis has therefore not yet delivered estimates of the relationship between price and demand for visas that are robust enough for use in impact assessments”.
That implies that the Government do not know what impact the change of fees will have on applicants such as students. Perhaps the Minister could make some comment on that. I worry that the evidence base is weak. I hope that it is not the Government’s intention to deter through cost levels students or those with skills whom we want to employ in this country, but the impact assessment appears to state that the Government do not know.
Page 7 of the impact assessment makes the specific point that,
“the impact on an individual student to changes in the visa fee … does not describe the response of international students in aggregate ... Evidence suggests that places at UK institutions are oversubscribed by international students, and that the number of international students in higher education has continued to increase over time, suggesting that past increases in tuition costs, living expenses and visa fees haven’t significantly damaged demand”.
It goes on to say that there is no evidence that this measure will do. Can I press the Minister on this point? I was speaking last week to a friend who is a lecturer at a university in Tokyo who said that her students are now far more reluctant for a number of reasons to come to the UK and are applying to Australia and America. If we are looking at the impact of past increases, are we making any future projections? What analysis is being done? Are we looking at these issues in the round, or in isolation at what this order does? There seem to be a number of pressures on employers and students, not just those with which the order is concerned.
I want to ask the Minister about the table in the impact assessment which shows the net revenue from fee changes for those who continue to apply. Despite the increase in revenue that the Government are looking at, the table shows that the amount of projected income will go down from £75.3 million in 2015-16 to £60.8 million in 2019-20. Is the purpose to ensure that the number of immigrants is reduced, because fewer of them are coming into the country, or is just to ensure that the fee system is fair on those who do? Is this a way in which the Government are trying to deal with the net migration statistics, which, as we saw last week, are a failure by their own standards—although I am not sure that that on its own tells us very much? What are the assumptions behind the net revenue being foreseen to reduce in that way and why is it the case? The point that I am making is about the robustness of the analysis that has been undertaken. We are fully signed up to the principle that those who use the system should pay for it, but I am not clear that the evidence has been produced to show that the Government understand the impact of all the changes being made.
A significant reduction, for example, in the number of overseas students coming to the UK and paying fees may help the Government’s target, but it will not help the UK economy or our universities. It would be helpful to learn whether the Government have given any consideration to post-implementation analysis of the impact. Such an analysis might give us the opportunity to assess in the different categories of immigration the impact not just of the fees but of a range of changes being made and whether the impact is positive or negative. We support the order, but I worry about the robustness of the evidence being provided.
Baroness Williams of Trafford
I thank the noble Baroness for her questions. I will go through, hopefully, all of them in order.
The first question that the noble Baroness asked was how the costs have been calculated. We will continue to work within the strict financial limits agreed with HM Treasury. Within those limits, we set fees that reflect the cost of processing and the value of a successful application while ensuring that the UK remains an attractive destination for work, study and tourism. The fees have Treasury and cross-governmental approval. We must have agreement from HM Treasury before we introduce or amend any fee. She asked a lot of questions today about the impact assessment of fee proposals. In terms of the criteria, the fee levels are considered very carefully, taking into account a complex range of factors, which includes, as I said, the administrative cost of processing an application; the benefits and the entitlements given to an individual if their application is successful; the international pricing comparisons; economic growth; mutually beneficial arrangements between the UK and other Governments; and the cost of running the immigration system as a whole.
One important point that the noble Baroness raised was on the tone of the language in the impact assessment if people leave. I have to say that, from a personal point of view, I agree with the noble Baroness. That point was raised in the other House. The assessments are produced by economists and the approach and language that they use is factual rather than policy based, but I totally get where the noble Baroness is coming from.
Baroness Smith of Basildon
I am grateful to the Minister for that comment. I thank that that is helpful. It is very good to have that on the record and I appreciate it. Although the tone is a concern, my problem also is whether there is evidence to back up what was said. I could not find that anywhere in the impact assessment. It may be economists making the statement, but where in the impact assessment is the evidence that backs up that statement? That is an objective comment.
Baroness Williams of Trafford
I thank the noble Baroness for that intervention. I can come back to her in due course after today. I think that we understand each other on that point.
On the consultation, we targeted over 1,100 representatives from the education, employment, business and tourism sectors, who were sent the document and encouraged to reply. We held workshops with representatives from different sectors and immigration lawyers. The document was also available to members of the public. We consulted on the principles of charging for immigration and the nationality fees, and that included questions on the simplifying of the fee structure; fee levels; legislation; optional and premium services; Border Force services; commercial partnerships; refunds; and administration fees. The responses were generally supportive of our charging strategy; of the principle that fast-track service at the border and premium services should be expanded to provide more choice and convenience for customers; and of the suggestion that the fee structure should be simplified.
Baroness Smith of Basildon
I have just one further point. I am grateful to the Minister. I think that most of the points I have raised have been addressed. I think she is right that they are as robust as they can be, but the impact assessment says how non-robust they are. I have one final point: I asked her about some kind of post-implementation review to try to understand the impact. I would appreciate it if she could comment on that.
Baroness Williams of Trafford
My Lords, I am pretty sure that there would be a review of any policy decision that we made. I will write to the noble Baroness if that is not the case. I am sure that that will be the case in due course.