Brexit and the EU Budget (EUC Report)

Lord Hannay of Chiswick Excerpts

Thursday 6th April 2017 Lords Chamber

[Lord Hannay of Chiswick (CB)]

My Lords, I am delighted to follow my noble friend Lord Butler. I am even more delighted that, unlike him, I will address the vexed legal issue, because that avoids a situation in which we might disagree, which we seldom do.

I should begin by declaring an interest: over many years of my professional career, I struggled with the intricacies of the EU budget: during our own accession negotiations in 1970-72, when this issue was at their heart, and then during the late Lady Thatcher’s five-year- long battle to secure and entrench a two-thirds rebate on our net contribution—that was from 1979 to 1984, when I was her principal Foreign and Commonwealth Office adviser. In the negotiations of what was subsequently called the Delors package, in 1987-88, when for the first time an overall framework for EU spending priorities and policies began to take shape, I was the permanent representative to the European Union. So I bear the scars of these endeavours and I did acquire, I think, some familiarity with the subject of the report we are debating today.

The report before the House is a valuable one, in my view, and I congratulate the noble Baroness, Lady Falkner, on having chaired the committee during its production. It has much useful material and detail about the issues that will confront our negotiators during the negotiations that are about to take place. For the most part, with one exception which I will return to in a minute, I have no hesitation in endorsing it as a genuinely useful background brief on a subject that will inevitably come up before this House again and again as these negotiations progress.

What lessons do I draw from my experience negotiating on budgetary matters in the European Union? First, I suggest that you should never think that you know enough about this subject to allow you to make sweeping assertions about it in advance. Just do not do that. If you do, all too often a black hole will open under your feet as soon as you have done it and you will have to revise everything you have said. When I heard a former Minister of the Crown—a Minister who was actually responsible for the largest spending department in the UK, Mr Iain Duncan Smith—musing that perhaps the European Union would end up owing us money, I could barely avoid grimacing at his woeful ignorance.

Secondly, do not establish in advance, and do not let anyone know, what overall figure you might settle for. Lady Thatcher never did that and she was right not to. You must retain a degree of flexibility. Then, never say that no deal is better than a bad deal. Lady Thatcher also never said that. I had hoped that the Government had stopped saying it when it went missing from the letter to Donald Tusk, but, alas, it then popped up within a week in the White Paper on the repeal Bill. If you want the other side to move their figures, they have to believe that if they do so, you might strike a deal with them. If you start saying that you are not going to strike a deal with them, they will not move.

It follows from what I have just said that I believe that the Commission has already made one fundamental and egregious error by allowing an unsubstantiated figure of €60 billion to slip into the public domain. I believe that it will come to regret it, because that will not be the outcome, but also because the only way to reach any agreed settlement is for both parties to the negotiations to work their way, painfully and painstakingly, through the detailed components of any overall figure. That is the work of the coming months; it cannot be done in advance, unilaterally, by one of the parties to the negotiations.

Now for my beef, which is paragraph 135 of the report. I do not believe that the committee should have accepted so uncritically and endorsed the legal opinion that in the absence of any deal the United Kingdom would have no financial obligations to the European Union. To put it mildly, that is only one legal opinion among many. It could only be settled in a court of law and it would be exceptionally unwise, in my view, if the Government went down that road, because the collateral damage to the United Kingdom from doing so—economic damage, trade damage and political damage—would be massive. That is, no doubt, why the Government are so coy about telling us what the consequences of leaving without a deal might possibly be. Unfortunately, this conclusion—the one in the report about the legal liability—is all too likely to encourage those of the Government’s supporters who are, in any case, showing many signs of wishing to leave without a deal to believe that they have a “get out of jail free” card. They do not; this would be a “get out of jail very expensively” card. I am glad that the Government show no signs of being tempted to go down that road. The Tusk letter certainly implied that they do not wish to do so.

We in this House surely need to ensure that that distinctly contentious and dubious legal opinion is not available to be hung around the neck of the Government, like the dead albatross around the neck of the Ancient Mariner, when the Government return one day, as we must hope they will, with an agreement for us to consider and approve. How it can best be done that the House does not continue to support that legal opinion I leave to the noble Baroness, Lady Falkner, who may perhaps take a shot at it—she tiptoed up to it in her introduction—when she replies at the end of this debate. I do not believe that we should either credit it or allow it to stand.

Higher Education and Research Bill

Lord Hannay of Chiswick Excerpts

Report: 3rd sitting (Hansard): House of Lords
Monday 13th March 2017 Lords Chamber

Moved by

[Lord Hannay of Chiswick (CB)]

150: After Clause 85, insert the following new Clause—
“Students and academic staff at higher education providers
(1) The Secretary of State has a duty to encourage international students to attend higher education providers covered by this Act, and UKRI must take every possible opportunity to encourage and facilitate the maximum co-operation between British higher education and research establishments and those based outside the UK, in particular with projects and programmes funded by the European Union.(2) The Secretary of State shall ensure that no student, either undergraduate or postgraduate, who has received an offer to study at such a higher education provider, be treated for public policy purposes as a long term migrant to the UK, for the duration of their studies at such an establishment.(3) Persons, who are not British citizens, who receive an offer to study as an undergraduate or postgraduate, or who receive an offer of employment as a member of academic staff at a higher education provider, shall not, in respect of that course of study, or that employment, be subject to more restrictive immigration controls or conditions than were in force for a person in their position on the day on which this Act was passed.”

[Lord Hannay of Chiswick (CB)]

My Lords, Amendment 150 is in my name and those of the noble Baronesses, Lady Royall of Blaisdon and Lady Garden of Frognal, and of the noble Lord, Lord Patten of Barnes, whose absence from the Chamber today, due to a health problem, both he and I deeply regret. When we debated these issues relating to overseas students, academic staff and global research co-operation in Committee, there were four amendments in my name. It has now been possible to telescope them into one, Amendment 150, which we are discussing now.

In summary, the amendment, first, places a duty on the Secretary of State to encourage overseas students to come here for their higher education. Secondly, it urges UKRI, the new organisation co-ordinating research, to encourage and facilitate the maximum international research co-operation, in particular with EU projects and programmes, which may be less easy to do after Brexit than it has been as a full member—which we still are. Thirdly, it seeks to put an end to the policy of treating students for public policy purposes as long-term economic migrants. This subject has been debated many times in the House without anyone, except the lonely person on the ministerial Bench, expressing a contrary view. Fourthly, it seeks to ensure that no further restrictive immigration rules, beyond those that currently exist, are placed on undergraduate and postgraduate students with the offer of a place to study here, or on academic staff with an offer of employment. I underline the word “offer” because it is not intended that they should have free movement rights to come here and look for these things; they would need to have the offer.

--- Later in debate ---

[Viscount Younger of Leckie]

My Lords, for the second time I am grateful to the noble Lord, Lord Hannay, and to my noble friend Lord Lucas for providing your Lordships with an opportunity to discuss the issue of international students. I also send my best wishes to my noble friend Lord Patten, who cannot be with us today. I say at the outset I am left in no doubt about the passions expressed in this debate by noble Lords around the Chamber. As I have previously indicated—and as the noble Baroness, Lady Royall, indicated—we have indeed said this before. But I will say it again so that the House is in no doubt. The Government very much welcome the contribution that international students and academics make to the United Kingdom’s higher education and research sectors and we have sought to nurture and encourage that.

I will deal first with the amendment from my noble friend Lord Lucas. I entirely share its goal of ensuring maximum transparency. I am pleased to say that there is already a wealth of information in the public domain about the contribution of international students. Provisions in the Bill will add to this. As I have previously indicated, the Bill already includes provisions requiring the Office for Students to monitor and report on the financial health of higher education providers. This can be done only if the OfS understands the types of students and the income they bring to the sector. Clause 9(1)(b) requires all registered providers to give the OfS such information as it needs to perform its functions. This will ensure that the OfS has the power to gather the information it considers it requires on international student numbers.

Furthermore, the Higher Education Statistics Agency already publishes detailed information about international student numbers, along with a breakdown of the countries they are travelling from. We envisage that these arrangements will continue. This amendment would also require information about the proportions of visas granted when set against the total number of applications submitted by each institution. The Home Office already publishes a breakdown of tier 4 visa applications, including the number granted and the number refused.

As I explained in Committee, I do not support providing this information broken down by institution. If there is an institution which, for any reason, has seen its visa refusal rate rise, that does not necessarily make it a failing institution. Provided that it passes the Home Office’s basic compliance assessment, and there are no other compliance issues, no action will be taken against it by the Home Office. But I am sure that the institution concerned would want to make any changes to its system that it deemed appropriate out of the public spotlight. I dare say that any institution that finds itself in that position would support the Government’s position on this.

My noble friend and I both support transparency and the publication of as much information as possible. Much of the information that he seeks is already available and published, and the Bill will strengthen those arrangements. There are small elements of his amendment where, for the reasons of practicality or commercial confidentiality that I have given, I would not favour publication of the data in question. However, those cases are very much the exception, and I can assure my noble friend that the information in which he is interested will be collected and published for all to see.

I turn now to the amendment from the noble Lord, Lord Hannay. These topics, as the House will know, were covered at some length in Committee and I do not propose to repeat all that I said then. However, it is important that I put on record again that there is no limit on the number of genuine international students whom educational institutions in the UK can recruit. I make no apology for repeating that. Equally importantly, the Government have no plans to limit any institution’s ability to recruit international students. Likewise, as recently emphasised by the Prime Minister, the Government are committed to ensuring that the UK continues to be one of the best places in the world for science and innovation.

I previously pointed out that the United Kingdom has a very competitive offer when compared to other major recruiters of international students, whether you look at speed of visa processing, proportion of successful applications, work rights during study or post study opportunities. While, of course, there is no room for complacency, the United Kingdom continues to be the world’s second most popular destination for international students and we have welcomed more than 170,000 international students to the UK for the sixth year running.

The noble Lord, Lord Hannay, spoke eloquently, backed up by statistics, about the importance of overseas students to the UK. We continue to look for ways to promote the UK as an attractive place to come to study and we have a very generous offer for international academics who want to come to work in UK universities. The Chancellor’s recent Budget acknowledged that the continued strength of UK research and innovation depends on access to world-class skills, ideas and talent. It set out how the UK is investing in our industries of the future and that the Government have committed to invest more than £100 million over the next four years to attract the brightest minds to the UK. This will help maintain the UK’s position as a world leader in science and research. It includes £50 million ring-fenced for fellowship programmes to attract global talent and more than £50 million from existing international funds to support fellowships that attract researchers to the UK from emerging research powerhouses such as India, China, Brazil and Mexico.

In the tier 4 visa pilot, four universities are involved in a trial which involves less paperwork surrounding applications and a longer period of post-study leave. The noble Lord, Lord Bradley, mentioned a similar issue. This is an excellent example of taking sensible steps to try to ensure that the UK is as welcoming as possible for international students. It covers exactly the ground in the first limb of the amendment from the noble Lord, Lord Hannay. I do not believe that a general statutory duty, which would be impossible to measure and bound to give rise to litigation, is the way forward here. The noble Lord, Lord Green, stated that these were not matters appropriate for legislation.

I turn now to the second part of the amendment from the noble Lord, Lord Hannay, which seeks to stop students being treated as long-term migrants. Incidentally, I have noticed that the noble Lord has moved from the description of “economic migrant” in his amendment in Committee to “long term migrant” now. However, I fear that, whatever the terminology, the difficulties with what he proposes remain the same.

[Lord Hannay of Chiswick]

I am sorry to disappoint the noble Viscount, but the reason I changed the wording was because he asked me to in Committee. I think a word of thanks might be in order.

[Viscount Younger of Leckie]

I do not believe that was made clear in the noble Lord’s speech, but of course I thank him for that.

A “long term migrant” is defined by the United Nations and the OECD as someone who moves to another country for a period of more than a year. That is the definition that the Office for National Statistics, the UK’s independent statistical authority, chooses to follow. As such, virtually all of those who come to the UK on work visas are long-term migrants. These are people who, like students, come for a time-limited period and intend to return home at the end of their visa.

I remind your Lordships of the key features of our work visa regime. People are issued with time-limited visas, which specify the terms on which they can come, including their right to work and whether they can bring dependants. On the expiry of their visa, they are expected to return home. All of these are equally important features of the visa regime for international students. As a result of this amendment, we could potentially be unable to apply basic visa checks, such as pre-issue security checks, or impose conditions, such as the right to work or a time limit, on a student visa. I am sure your Lordships will see why this is not a sensible approach.

The final part of the amendment from the noble Lord, Lord Hannay, would prevent any more restrictive conditions being applied to international students and academics than currently exist. I pointed out in Committee the difficulty that could be created if there were changes to Immigration Rules that everybody agreed were desirable but could be seen as more restrictive. The noble Lord’s suggestion was that, in such circumstances, there should be further primary legislation, but I remind your Lordships that Immigration Rules are already laid before Parliament and can be debated, if appropriate. That seems to me the best way to accommodate those minor changes to our immigration system that are, from time to time, required and a more proportionate way of dealing with them than fresh primary legislation.

The effect of this part of the amendment would also mean that no future changes could be made to the rules as they relate to citizens of the European Union and therefore set in stone in perpetuity free movement rights for EU students and academics. As your Lordships know, we have indicated that future arrangements for students and academics will be subject to negotiation with the EU and need to be considered in the round, rather than that a particular approach be written into legislation now.

International students consume services while they are here, so it is right that, in line with international norms, they feature in net migration statistics. I reassure your Lordships that, as I have explained, that has not led, and will not lead, to the Government seeking to cap numbers or restrict institutions’ ability to continue to attract students from around the world. The Government want our world-class institutions to thrive and prosper. International students and academics will always be welcome in the UK. However, I do not believe that we can pass an amendment which would be likely to make operation of the visa system impossible.

Before I invite the noble Lord to withdraw his amendment, I want to respond to a point made by the noble Lord, Lord Bilimoria, who said that a report is held by the Home Office showing that only 1% of students overstay. I am afraid that we do not recognise that 1% figure, which was cited in the media. Over time, the data obtained through exit checks will contribute to the statistical picture and the ONS data on net migration figures, but it is too early to draw conclusions. I ask the noble Lord, Lord Hannay, to withdraw his amendment.

[Lord Hannay of Chiswick]

My Lords, this has been a most interesting debate, and I would like to thank all those who participated in it with splendid brevity—I think that we have beaten some of the records for having brisk, clear interventions. I find enormously heartening the support from all quarters of the House for this amendment. It really is a great place to be when one can get a confluence around the House such as we have had today when discussing legislation. That is splendid.

There is of course one exception: the noble Lord, Lord Green, who has to be thanked for being the grit in the oyster which I hope will shortly produce a pearl. I will not bother to take on his arguments, because the noble Lord, Lord Blunkett, did it far better than I can, except to say that if he really believes that there is a clear separation between policy and legislation, he has led a very sheltered life. I do not know what we have been doing for the past five weeks if we have not been trying to make policy. I think that it is the Government’s intention to make policy, so here is another bit of policy. The time has come now to test the opinion of the House.