Immigration (Health Charge) Order 2015

Baroness Smith of Basildon Excerpts

Tuesday 10th March 2015 Grand Committee

[Earl Attlee (Con)]

My Lords, I am grateful to my noble friend the Minister for introducing the order for consideration by the Grand Committee today. As pointed out by my noble friend, the Committee will recall that the House looked at this matter in great detail when we approved the principle during the passage of the Immigration Act last year. Our task today is to ensure that the Minister is properly and appropriately implementing the legislation. I am sure that the noble Baroness, Lady Smith of Basildon, will be as forensic as she usually is.

I recall last year enjoying privately teasing some noble Lords who were involved in the higher education sector by asking them to promise me that they would not use these provisions as a selling point in their organisation’s prospectus. The plain fact is that we are capping health charges for overseas students at £150 per annum. If you tell someone that something is free, they will probably not believe you. If you tell an overseas student that their healthcare is capped at £150 per annum, they will think that it is a bargain. I think that it would help the Committee if the Minister, when she replies to the debate, would tell us how leading academic institutions in the United States of America treat healthcare costs.

A constant refrain last year was the suggestion that the Government wanted to reduce the number of overseas students by a variety of means. When I was in the Government, we were very keen on reducing the number of bogus students, but I never saw any evidence suggesting that we wanted to do anything other than encourage genuine students. Ironically, soft power is being debated in the Chamber this afternoon and overseas students are a very important component of our soft power portfolio. The Minister has already told the Committee that the number of full time, non-EEA students rose by 6%. That does not suggest that the Government’s action is deterring overseas students from coming here and, of course, they are very welcome.

[Baroness Smith of Basildon (Lab)]

My Lords, I thank the noble Baroness for her explanation. It is helpful to have a bit more detail than there is in the order. Again, I struggled trying to tie up the information in the impact assessment, because there seems to be a range of figures. I think that the noble Earl was being complimentary when he referred to me as forensic, although I am not sure he is always trying to be complimentary when he says that. I struggled when I tried to understand some of the figures in the impact assessment, especially when I compared them with the figures in the impact assessment of the previous order that we have just debated.

First, I should like to put on record that we do not oppose the principle of the health charge, which the noble Baroness will recall from the many long debates we had on the Bill. We understand that those who use the system should contribute to it and that remains our position; it has not changed at all. However, the noble Earl said that we should ensure that the charge is properly and appropriately implemented and that the evidence on which decisions are based is robust. The Minister will have seen the report from the Secondary Legislation Scrutiny Committee which questioned whether the order created perverse incentives and questioned the level of the charge.

--- Later in debate ---

[Baroness Williams of Trafford]

I thank my noble friend Lord Attlee and the noble Baroness, Lady Smith, for their questions. I will take them in reverse order. My noble friend makes the comparison between fees for students in this country as opposed to some leading universities in America. I can inform the Committee that, in Harvard, it costs £600 a year and could cost up to an extra £1,500 per annum if you are a student there. The difference is quite significant between what we are able to charge in this country and what a student attending Harvard might be expected to pay. He also made a good point about the increase in the number of students, which I think he referred to in our previous debate.

The noble Baroness, Lady Smith, talked about a perverse incentive. In fact, that was the very question that I asked myself. If there were a perverse incentive, it exists at the moment because healthcare is absolutely free. In setting the amount of the charge, the Government have considered several things: namely, the cost to the NHS of treating temporary non-EEA migrants and the range of health services available without charge to migrants; the valuable contributions that migrants make to the UK; and the need to ensure that the UK remains an attractive destination for global talent. Taking those factors into account, the charge has been set at £200 a year with a discounted rate of £150 a year for students. We think that this represents a proportionate contribution to the NHS, rather than a full cost recovery. The charge has been set at a rate that is designed to strike the balance between providing a better deal for the UK taxpayer and ensuring that the UK is maintained as a destination of choice for global talent. There is a balance to be struck.

The noble Baroness, Lady Smith, also asked about review upon implementation. The operation of the health charge will be reviewed six months after implementation. I think that that will provide an opportunity to look at whether the charge is set at an appropriate level. She also asked why taxpaying migrants must pay the charge. We believe that those subject—

[Baroness Smith of Basildon]

That was not my question at all. I asked whether any tax paid by migrants for working was taken into account in any assessments that were made as part of the impact assessment. I was not querying whether they paid the charge, just whether it was calculated under the impact assessment.

[Baroness Williams of Trafford]

Yes, my Lords, it is, so I will not pursue the point that I was making before.

As regards how we arrived at the figures—the noble Baroness talked about the surcharge raising £195 million —that excludes the cost of administering the scheme, which is why the figures probably seem a little anomalous to her. All temporary migrants subject to the surcharge will have to pay it or they will not be granted a visa or permission to stay. Basically, there will not be evasion of the charge.

The noble Baroness also talked about the fact that in the impact assessment there is a mention of increased employment opportunities for UK nationals. That reflects a situation where the introduction of the health charge results in a modest decrease in the number of foreign nationals coming here.

I hope that I have answered all the noble Baroness’s questions. I thank my noble friend—

[Baroness Smith of Basildon]

There was the question I asked at the beginning about whether the charge is likely to be any higher, given that the figure in the legislation is not an absolute one.

[Baroness Williams of Trafford]

My Lords, I am making an assumption that because the impact of the charge will be reviewed after six months, that will be the point at which a decision such as that would be made. However, if it is any different, I will write to the noble Baroness.