Committee (3rd Day) (Continued)

Immigration Bill – in the House of Lords at 5:25 pm on 10th March 2014.

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Amendment 49

Moved by Lord Hannay of Chiswick

49: Before Clause 15, insert the following new Clause—

“Exemptions to Part 3

No restrictions on access to tenancies, bank accounts, driving licences or other services, or charges for services, under this Part shall apply to persons—

(a) holding Tier 4 (General) visas sponsored by a recognised higher education institution, or

(b) holding Tier 2 visa and registered in full time undergraduate or postgraduate study at a recognised higher education institution.”

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Chair, EU Sub Committee F - Home Affairs, Health and Education 5:47 pm, 10th March 2014

My Lords, last week we had a useful debate about the negative impact of some aspects of the present Bill on overseas students, both undergraduates and postgraduates, wishing to come to this country. That debate took place on Amendment 26; today we are discussing Amendment 49.

Ministers can be in no doubt already of the depth of concern felt in all corners of the House about the damage being done by the cumulative effect of the Government’s immigration policy to what is, by common agreement, one of Britain’s most buoyant and valuable invisible exports, and of the strong desire that Ministers should think again before imposing any further charges or burdens on overseas students.

Last week we discussed the new appeals procedure; today we are considering what I would describe as the two most worrying aspects of the Bill so far as overseas students are concerned—the NHS charge and the provisions on accommodation. It is the aim of Amendment 49 to remove the threat to this very important part of our economy by, as it were, carving out full-time students from the application of those provisions.

I shall try not to weary the Committee with too much repetition of the general points and facts about the contribution of the higher education sector to our economy and the reasons for believing that it is already being harmed by the cumulative effect of the Government’s immigration policy, about which I have spoken—and that, I add, before any impact from the measures in the present Bill has taken effect.

I hope that the Minister can respond to this: what other British economic sector, bringing in more than £10 billion net a year and rising, is being put at risk by the Government’s own policies? Is there any other industry that we do that to? The latest statistics from the Higher Education Statistics Agency show that we are losing market share to our main competitors—to the US, Australia, Canada and, perhaps not too far in the future, to France and Germany, where more and more courses are being offered in English.

Let me cite one or two of the findings from a National Union of Students survey carried out in January this year on a sample of 3,000 overseas students already in this country; that is to say, people who will not be directly affected by the measures we are discussing today. Some 74% of them said that the proposed NHS charge would have made it more difficult or impossible for them to study in the UK, while 82% of those with dependants, who are mainly postgraduates paying much higher fees, of course, said that free access to the National Health Service was important to their choice to study here. Some 40% said that the introduction of landlord checks would have negatively impacted on their decision to study in the UK, and that figure rises to 51% in the case of PhD students. Those are pretty sobering findings.

When it is suggested that overseas students should surely in equity make some contribution to any welfare costs, it seems to be completely overlooked that such research as there is shows that the costs incurred are substantively outstripped by the benefits that these students bring to our economy. Unlike what I will call genuine economic migrants—people who come here looking for work—these people bring with them over £20,000 a year in cash which goes into our economy. They are creating employment both at our universities and in the towns and cities that host those universities, as research by the University of Sheffield shows. They often enable our universities to maintain a wider range of important subjects, such as engineering, science and mathematics, than would otherwise be the case. I do not imagine that anyone supposes that taxpayers’ money is going to be available to fill any gaps that might be caused by a shortfall in the number of overseas students who would otherwise be attracted by the excellence of our academic establishments.

I hope that I and others who are to speak to this amendment will have demonstrated why removing full-time undergraduate and postgraduate students from the scope of these measures, as Amendment 49 proposes, is not just a piece of special pleading but justified as a rational analysis of our national interest. I beg to move.

Photo of Baroness Williams of Crosby Baroness Williams of Crosby Liberal Democrat

My Lords, my name is attached, along with others, to the amendment moved by the noble Lord, Lord Hannay. I will speak briefly to make one or two points that perhaps are not so widely part of this debate, because, as I have rung up acquaintances of mine in universities—I know quite a few, having been an Education Minister—I have become more aware of the depth of the challenge to our university and higher education system and, at one remove, of the depth of the challenge to the front wave of our economy in terms of its dependence on innovation and invention. I will not detain the Committee for long, but I believe that what I am saying, although supplementary to what has already been said by the noble Lord, Lord Hannay, deserves a great deal of thought.

Let me begin by saying that what has attracted students from overseas to this country has been not only the English language and the excellence of our universities, but also a deep sense of our being an old and stable democracy. People have a sense of freedom of expression in this country, along with freedom of intellectual discussion and debate. There is no doubt that, rather surprisingly, in the fields of science and technological research, this country has continued to be a magnet for students from all over the world in a way that one would not really expect for a country of our size and one that is not in the very first rank of economies, like the United States at the present time. It is very important that the context of what attracts overseas students to this country is something that we maintain. In particular it means our marked ability to tolerate different points of view, and to tolerate people of different races, nationalities and languages. That has been a hallmark of studying in this country.

Anyone who reads the history of the United Kingdom will be more than aware that on three occasions we have benefited vastly from immigration. The first occasion was the immigration of German Jews in the 1930s, who brought with them an extraordinary level of understanding and knowledge of medicine and science, including a number of very distinguished Nobel laureates. The second great wave was immigration from the Caribbean in the 1960s without which, quite frankly, we would not have a working National Health Service today because of the huge contribution they have made to staffing that public service. The third wave, more recently, was of immigrants from Asia and east African refugees who came here in the 1970s and gave a tremendous boost to our commerce, business and research.

However, it is not the case that the concerns being expressed here are those only of overseas students, although I echo completely what the noble Lord, Lord Hannay, said about the very disturbing information from the National Union of Students. He mentioned the fact that more than 50% of undergraduate students said that they would think hard before coming to us again. Perhaps even more significant and important is that no fewer than 66% of postgraduate students—half of our overseas students are postgraduates—said exactly the same thing. In light of the changes being made—the increase in visa fees, the health surcharge and all the rest of it, these students would think hard before coming here again. Let me say in passing that we do not seem to recognise our extraordinary dependence on these postgraduate students. I can give an example. Time after time we have recruited doctors from the Indian subcontinent to sustain our health service. A great bulk of them have been postgraduate students who came from India to study in the United Kingdom and then went on to work as postgraduates, and in some cases decided to become citizens of this country and continue to sustain the NHS.

I would add to that that there are people of great significance and wisdom who would associate themselves powerfully with the view that the discouragement of overseas students has a devastating effect on our economy, in particular the science and engineering sectors. I shall quote two of them. The first example is a quotation from the CBI which has said in a public statement:

“Despite the government’s assurances to the contrary, many businesses fear that complex recent work permit and visa reforms have created a perception that Britain isn’t open for business”.

That is often treated as something that is said by those who come from outside this country, but no, it is something that has been said officially by the CBI, the leading organisation representing industry in the UK.

The second example comes from the president of the Royal Society, Sir Paul Nurse, who is a very great scientist indeed. Time and again he has pleaded with Governments to give a more generous reception to overseas students. I shall quote his words:

“The rhetoric from the Home Office, combined with the complexity involved with immigration rules and visas, has led to a perception internationally that the UK is not particularly welcoming”.

I have given these examples because no one can pretend that these are partisan statements made for political ends. They are statements by distinguished people who believe that what they are saying should be a warning for the rest of us.

I will give another example. Something comes out every year called theAgent Barometer, which is published by a body called ICEF, together with the Enterprise Institute. This year, it said in its report on 2013 that there is now a steady decline in Britain’s attractiveness. In particular, it pointed out that in one year Canada has leapt to become the second most attractive destination for overseas students, the position that we held for a very long time, with only the United States higher. That is because Canada has changed its visa regulations and has decided on a campaign to welcome overseas students. It has certainly not added a series of obstacles to their coming to the country. The noble Lord, Lord Hannay, made the crucially important point about what we might call the localism element when it comes to overseas students and the universities that serve them. Anyone who knows the many cities where new universities have been born in the past generation will know how, in almost every case, the new university brings with it a degree of demand, excitement and stimulation which the old city simply did not have without it. That has been a huge contribution, against the great pull of London, to making this country intellectually and industrially lively and innovative well outside the London bubble.

There is another thing which is of great importance. The attempt that the Government made to try to meet some of the problems and objections about our becoming less attractive to overseas students—in particular the so-called exceptional talent scheme, introduced only two years ago, which allowed 700 visas to be taken up by the most brilliant scientists who could be attracted to this country and another 300 by the most brilliant artists—has failed dismally. So far only 80 of those 1,000 visas have been taken up because people who are inclined to accept them discover the obstacles on the way, including the cost of a whole range of things that they did not perhaps take into account in the first case.

There is another subtle and in some ways even more disturbing factor, which hardly anybody notices, although it was just touched upon by the noble Lord, Lord Hannay. As a former Education Secretary, it is something that certainly burns with me. I was very shaken to hear one of the most senior people out of the many that I spoke to over the weekend from the university sector—I will not name him but he is certainly in one of the very top positions in the university world—tell me that his university is considering dropping the so-called STEM courses. STEM stands for science, technology, engineering and mathematics. He said that without overseas students coming in substantial numbers, the university was unable to finance these courses. He said, rather sadly, that there would not be sufficient British recruits to make up the difference; the university would simply have to drop the courses because it could not afford to sustain them in the situation where they were largely not taken up.

We are slipping in terms of engineering and science, as many noble Lords will know. The number of our own young people who opt for engineering and science courses is steadily declining, and the examination results in engineering and science are not very impressive. We are largely sustained in these fields, which are crucial to revive British manufacturing and to sustain British science, by overseas students, most of them postgraduates, who join our teams and work on cancer research, pharmacology and cybernetics—the whole range of what one might call the first new wave of scientific and engineering areas. We are no longer giving them the encouragement that would bring them to our country. That is really serious. How else do we imagine we will sustain an economy in the coming years if we cannot maintain the quality and brilliance of our research?

Another very great man who I will not name, also a leading researcher, said to me that time and again he finds that his teams need people with some innovatory experience from another country, but increasingly they cannot come, do not want to come or, because most of them are at an age when they have wives and children, cannot afford to come. The surcharge is deceptively low, and if you have a wife and two children it becomes really quite substantial.

I plead with the House to take this very seriously. I think we are in the process of killing the golden goose, which is a very foolish thing to do. We are, essentially, becoming more inward-looking. I am not blaming just my own Government, of whom I am a supporter; the practice of British Governments for many years now has increasingly failed to recognise the need to welcome people from overseas, help them and make them feel at home.

I conclude by saying that I am not a bit surprised that the United States takes first place. Having been a professor at Harvard for 10 years, I know the immense lengths that Harvard goes to to attract, hold, sustain and make happy people from all over the world. I sometimes think that it is like a huge vacuum cleaner simply sucking up talent. I do not believe that is the best thing that can happen to the world. However, I recognise that if we do not leave the doors open in our own old but brilliant country—which really does mean substantial changes to the legislation in front of us—we will have only ourselves to thank as we start slipping our way through the 21st century.

Photo of Baroness Warwick of Undercliffe Baroness Warwick of Undercliffe Labour 6:00 pm, 10th March 2014

My Lords, I have added my name to this amendment because I agree with the noble Lord, Lord Hannay, that it is a fundamental mistake to subject international university students to further hurdles, barriers and restrictions. Instead, I believe this House should send a clear message to the Government: international students should be encouraged, welcomed and supported. This carve-out amendment would send that message, and I hope it will find wide support. I note that in adding my name to this amendment, I am joined by noble Lords from all sides of the House. Indeed, it is characteristic of our debates about international students that there is consensus among the parties. We know that at the highest level of the coalition, Cabinet Ministers recognise the absurdity of policy which drives the Government to stifle the UK’s prospects for growth in higher education exports—despite the fact that this is now one of our most important export markets and one with the strongest potential for growth.

While we invent new restrictions, our competitors are going to considerable lengths to reduce them. Australia, as is so often the case, has done us the favour of experimenting with draconian visa restrictions and has learnt from that experiment. The consequence was that students went elsewhere. After a wholesale review—the Knight review—Australia has rapidly set about undoing the damage that it inflicted on itself, streamlining visa processes and offering more generous post-study work opportunities as part of a dramatic about-face on immigration policy in relation to students. Nevertheless, Australia reckons it will take a decade to recover its former position.

We are not doomed to repeat that mistake, but we must stop being complacent about what is happening, which is why this amendment is so necessary. Ministers repeatedly quote partial UCAS and visa application figures as though they disprove the concrete enrolment data. The Minister must know that visa applications do not always translate into enrolments and that a relatively small proportion of international students apply through UCAS anyway—not least because UCAS does not deal with postgraduate admissions.

Recently, the right honourable Oliver Letwin used a Telegraph interview to point out that the Government’s net migration target was “statistical nonsense”. I agree. As senior Liberal Democrats have pointed out, it is not in fact coalition policy, but a Conservative pledge. It appears to me staggeringly unlikely that the target will be met. Can the Minister assure the House that he will use his influence to persuade his colleagues in the Government that this is the right time to withdraw gracefully from the position they have got themselves into?

I put it to the Minister that measures such as the ones we are dealing with in the Bill are part of a wider attempt to make the UK as unattractive as possible to those who might come here. Since students are the largest category of visa applicant, it particularly targets them. Since the majority of student visa applicants are now bound for our universities—because the Government have made it next to impossible for everyone else—they, in turn, are particularly hard hit. I agree that many other groups will be hit by the residential tenancy and NHS surcharge provisions in the Bill, and I shall certainly join other noble Lords in supporting amendments that would reduce the impact of the Bill on all migrants, not just students. Meanwhile, I urge noble Lords not to be distracted by arguments that the amendment we are now debating will not help other groups.

I understand the charge that support for this amendment looks like special pleading from the university lobby, but it misses the point: the overwhelming majority of those affected by these measures will be students, many of them living away from home for the first time. There seems a real risk that those students will choose to go elsewhere if they are faced with high initial charges for access to NHS services and are prevented from securing accommodation in advance of their arrival. I agree with the noble Lord, Lord Hannay, and others that the wholesale exemption of students would be preferable to piecemeal improvement.

Photo of Lord Cormack Lord Cormack Conservative

My Lords, 20 years ago, along with my friend, the noble Lord, Lord Radice, I was invited by the late, great—I use the word advisedly—Lord Dahrendorf, one of the most remarkable international figures ever to grace your Lordships’ House, to be a visiting parliamentary fellow at St Antony’s College, Oxford. We were the first two. I am sure I speak for the noble Lord, Lord Radice, who is not in his place. We were immensely impressed by this postgraduate Oxford college, which attracted students from all over the world. Many of them went on to hold positions of high importance and real influence in their native countries but always had a sense of real gratitude, affection and, indeed, obligation to the institution at which they had studied here.

I am still a member of the Senior Common Room at St Antony’s and just a couple of weeks ago I was talking to our present warden, Professor Margaret MacMillan, herself an eminent Canadian historian who has just written a most remarkable book on the origins of the First World War. She said that at the moment there are students from 73 different countries at St Antony’s, and that many current Governments of the world include those who received at least part of their education there. I believe there are four or five in the Mexican Government alone.

That is truly remarkable but it is not unique to St Antony’s, eminent as that institution is. When students come to this country and study, they contribute far more than they obtain, and go back with a knowledge and affection for the United Kingdom. Of course, that does not apply just at postgraduate level. In the fair city of Lincoln, where I now live, we have two universities: the University of Lincoln, which has in a remarkably short space of time become a very significant university; and the smaller Bishop Grosseteste University, which began more than 100 years ago as an Anglican teacher training college and is now a proper university. Both those universities have students from a variety of countries.

As the head of another college said to me not long ago, we are in danger of making those who consider applying feel that they are not entirely welcome here. I cannot for the life of me believe that that is our intention. Of course it is not. I know it is not the Prime Minister’s; I know it is emphatically not the view of my noble friend the Minister. Nevertheless, as we all know, perceptions in politics are very important. There are, in India in particular, young men and women who believe that they are not as welcome as we should make them feel.

I said in a previous exchange in this House that far better that a bogus student come to a bogus college than we shut out somebody who might in the future be

Foreign Minister of his country or win a Nobel Prize. That puts it very simplistically but I would not depart from that. We really should be treating students separately from other immigrants. They come, they pay, and the vast majority of them go back, and very often those who do not enrich our society by staying.

A few moments ago my noble friend Lady Williams talked of those who came as Jewish refugees before the war and gave a new depth and dimension to the intellectual life of this country. We have in your Lordships’ House those who were in the wave of Ugandan Asians expelled by that ghastly dictator, Idi Amin, in the early 1970s. I shall always be very proud that it was a Conservative Prime Minister, Edward Heath, who opened the doors for them, and they have enriched our society.

We have been admirably led by the noble Lord, Lord Hannay, in his brief, concise but extremely persuasive speech. We are dealing with students, with young men and women from around the world who still look to Britain as being a place where they can enjoy intellectual freedom, benefit academically, acquire and develop knowledge, and engage in research that will enrich all. I beg my noble friend, when he comes to reply, to acknowledge that there is a difference between the student immigrant and others.

I will concentrate my activities on this Bill on students because I believe that this is the part of the Bill that is most defective. I urge noble Lords in all parts of the House, whatever their political affiliation, to support the plea made by the noble Lord, Lord Hannay, and so admirably followed up by my noble friend Lady Williams and the noble Baroness, Lady Warwick. I sincerely hope it will not be necessary for the House ever to divide on this issue because I hope the Government will recognise the powerful good sense of the arguments that have been advanced and which I am trying, in a gentle and modest way, to reinforce and support.

Photo of Lord Patel Lord Patel Crossbench 6:15 pm, 10th March 2014

My Lords, I strongly support the amendment moved by the noble Lord, Lord Hannay, which seeks to remove tier 2 and tier 4 students from the Bill in all its aspects. I will speak also to my own Amendment 57, which relates specifically to the health charges for tier 2 and tier 4 students. Before I do that, I will just comment on the unintended consequences of some of the Bill’s provisions.

Let us take the evidence that students will have to produce of their bona fide tier 2 or tier 4 visas. I came to this country as an east African Asian schoolboy in the late 1950s, to do A-levels before entering university. I did them at a school in Harrow—not the public school. That is not the point. The point is I went to look for accommodation, which I eventually found, and I still remember the address: 38 Priory Road NW6, near Kilburn. The adverts for rooms in the newspapers that I looked at would either say “No blacks” or they would say nothing. So you went to addresses whose adverts did not say, “No blacks”—what was the point of going to a place that did? Sometimes the door would open and shut in your face, with a response, “Sorry, the room has gone”, before they even asked whether you had gone there for a room. There will be unintended consequences of having to provide proof for non-EU students. Later I found out why there were five east African Asians and one non-east African Asian—there were six of us—staying at that address. It was because we were paying a higher rent. The landlord—whom I would not name, but I do remember his name—knew that we were no trouble. We were no trouble because we had no money anyway. We were law-abiding, decent young people—I hope. But that is exactly what will happen: those landlords who are willing to take non-EU students will charge higher rents. That will be the unintended consequence of the clause in this Bill relating to renting.

That is one good reason why I would favour a carte blanche removing students from this legislation. I declare an interest: I am the chancellor of the University of Dundee. With our strength in life sciences and being the second university in Dundee with strength in computer sciences, we have a large number of non-EU students. A tier 2 student’s perception of a health levy would be that this was just another example of unfriendliness in the United Kingdom. They would already have paid a lot of money for visas, for English language tests and sometimes for interviews, and they will now have to pay more. Is there an evidence base to suggest that students access the NHS disproportionately? There is no evidence, from general practice, from A&E departments or from specialist hospitals, that students disproportionately access healthcare—quite the reverse. In my case, the students that we used to see were the girls who came to contraceptive clinics, but, most of the time, even my wife, who did general practice, did not see students particularly. So there is no evidence that students disproportionately access the NHS.

It has already been said that there are huge net economic gains to be had from having students in this country—of several billion pounds. A study carried out by Oxford Economics showed that students in Sheffield contributed £120 million to the local economy. Let us remember that they pay for housing; they pay for their travel; they pay for everyday living costs; and they also pay indirect taxes because they buy stuff on which they have to pay VAT. There is no economic loss associated with our having international students. However, the likely impact of a perception—it might be a perception but perception becomes a reality—is a decline in the number of overseas students, particularly in STEM subjects and in those related to medicine where at one time there were large numbers. Figures that I have been quoted show that the total number of visa applications fell from 313,000 in 2009-10 to 207,000 in 2012-13. Forty per cent of our students come to university through pathway providers, which are mainly independent schools. They have seen a decline of 21% and we are likely to see a further decline in total numbers as a result of these pathway students not coming to university. All in all, including international students in the provisions of this Bill will have a greater detrimental effect on universities.

It was interesting to read in evidence given to the Science and Technology Committee inquiry on STEM subjects by Philip Lockett of London South Bank University, Ian Bradley of Manchester University and Daniel Stevens of the NUS—noble Lords can read the transcript—that they felt that an NHS levy and charges would deter students coming to the UK, even though such a levy might be only £150. Tier 2 students—the postgraduate and research students—are among the most valuable students that you can have. From them, you pick out the brightest and the best, and you keep them here because they will contribute to our university strength. They felt that the levy and other difficulties that the Bill would pose for them in finding accommodation et cetera would deter them from coming here. In a survey of 3,100 students, 83% of PhD students felt that the levy would have a detrimental effect; 82% of those who had dependants said that it would have a detrimental effect—let us remember that the levy is on top of the visa cost for dependants that is going up by 50%. All these costs quite rightly add to their perception that we do not welcome non-EU international students. I know that we have had that debate and that it is not the intention of the Government, but the perception needs to be addressed.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

My Lords, I had a communication this very morning from the University of Essex, from which I stood down as chancellor at Christmas after more than 10 years, which drew my attention to the fact that the Times of Indianewspaper recently had a headline stating, “Indian students feel unwelcome in Britain”. Other noble Lords have mentioned that. Indeed, the speeches we have had do not leave a great deal in need of saying, but I want to emphasise a couple of things.

The University of Essex, apart from the London School of Economics, has the greatest proportion of overseas students of any university in the United Kingdom. Happily, I may say that undergraduate applications for this year, coming in the autumn, have declined by only 1%, although it is notable that the decline in applications from China and India is 16%, which has all sorts of significances of which I am sure the Committee is aware and on which I shall not enlarge.

What I want to emphasise—and the noble Lord in moving the amendment touched on it very effectively—are the non-economic aspects of a university education in this country. I think that many here now would agree that our universities and the opportunity that they provide to students from every corner of the globe are a jewel in our national crown. It is quite extraordinary that we are, almost inadvertently, undertaking a series of changes that lead to the consequences which other noble Lords have emphasised in terms of the dropping-off of applications to come here and so on. The non-economic consequences of having overseas students at our universities can be underestimated. Some talk of it as “soft power”. I understand the force of the phrase, but I am more keen, if one is allowed to be in this age, on the personal ties and relationships that are formed by having a large body of overseas students among our students here, whether undergraduate or postgraduate. Those personal ties, loyalties and affections work miracles after they go away from their university, miracles in all aspects of human life: cultural and economic, of course, as well as personal, societal—you name it. I think that all of us would agree that the most valuable thing that we ever take from a university is our relationships and the extraordinary broadening of our understanding of the lives of other people in other continents that comes from a close, lifelong relationship with someone you have met at university or some number you have met. I am lucky enough to have a number of lifelong friends who came from other countries. What you get from that and they from you cannot be put in terms of pounds, shillings and pence and is of infinite value in a world wracked with problems and tensions. This country cannot with any semblance of common sense do anything to damage in any way that jewel in our crown at a time when the whole wide world is competing for students. Everybody wants foreign students. Every country in the world is expanding its student base at huge rates—China and India are two examplars.

I hope that my noble friend, who has an unenviable job in summing up on the amendment—

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

There we are: he is an optimist from the Fens. I hope that he will take heed of all that has been said. I have just a small last point. The bureaucratic consequences of the Bill are horrendous, and the amendment has a wonderful simplicity about it. It simply removes overseas students from the tentacles of I do not know how many aspects of our modern, burgeoning bureaucracy.

Photo of Lord Cameron of Dillington Lord Cameron of Dillington Crossbench

My Lords, I believe this to be a very important amendment, and I am very glad to follow the noble Lord, Lord Phillips.

As some noble Lords will know, I spend some of my time visiting African developing countries with a view to promoting agriculture, and smallholder agriculture in particular, as a tool for development. While I am there, often on parliamentary visits, I meet parliamentarians in those countries, Cabinet Ministers, Prime Ministers, Vice-Presidents and even occasionally Presidents, and heads of institutions, top civil servants, heads of research stations and so on. It amazes me how many of those people have paid for themselves to be educated at British universities and institutions.

Being a bit more mercenary than the noble Lord, Lord Phillips, I want to make the point that the resultant Anglophilia that that education gives them, the resultant ingestion of our culture, way of life and thinking must be of huge value to UK Inc, as it were. It must be worth all the budget of the British Council, the BBC World Service, millions of pounds-worth of diplomacy in embassies, millions of pounds-worth of DfID’s great worldwide reputation and even, if it came to a fight, probably a couple of regiments as well.

We must do everything possible to encourage—not just not to discourage but to encourage—those overseas students because, in the short and long term, their value to us is huge. This is a very good case of government silos, because the Home Office clearly sees its job as to control immigration but ignores in this case the wider implications for UK business, UK education and UK reputation in its foreign policy. I beg the Minister to send out the message to the world that we are open for business and that those students—most likely the future leaders of their country—should be given every incentive possible, not just not discouraged but seriously encouraged, to come to pay for themselves to attend our institutions and absorb our culture and values.

Photo of Lord Tugendhat Lord Tugendhat Chair, EU Sub Committee C - External Affairs

My Lords, the noble Baroness, Lady Warwick, said that the amendment enjoyed support from all quarters of the House. I speak as the Conservative sponsor of the amendment, and I am very happy to do so.

We have heard a number of powerful speeches and I think that I agree with every word that has been spoken. I particularly draw attention to a point made by the noble Lord, Lord Hannay, in his introduction when he said that he was not making a special plea for any given set of individuals. Rather, he was pleading on behalf of one of the most successful sectors of British life and of the British economy in order to enable it to continue to be one of the most successful, not only within this country but in international terms.

If I may say so, it is very important when the Minister answers that he should not treat this as being something directed towards a particular group of people who come to this country, as if we are conferring some favour on them. Rather, he should deal with the issue in the context of the impact that the Government’s proposals will have on one of the most successful sectors of British life and of the British economy. The ability to attract international students is both a means by which British universities excel and a measure by which others can see that they are excelling. To diminish in any way the free flow of talent to this country would be very damaging.

I should like to make one final point, because so much has been said that there is no point in repeating it. The Government should look at the beam in their own eye, if I may say so, on this issue. The Government understand very well that, when they make senior appointments to different institutions, they want to attract talent from all over the world. Indeed, they boast of their ability to do that and of their willingness to make appointments of non-Brits to high places in this country in a way that most other countries would not in the case of foreigners. They paid vast sums of money to attract a redoubtable Canadian to run the Bank of England—about four times what the president of the Federal Reserve gets, they were so anxious to attract his talents to this country. Another very talented Canadian—paid rather less, actually—is at the head of the Royal Mail. There are many other examples, I am happy to say, of talented people being attracted by the Government to contribute to the British economy.

The Government understand perfectly well the importance of attracting the best people to run British institutions, and they should be commended for their lack of chauvinism in that regard, but that is also true of universities. If universities cannot continue to attract the best talent from all over the world, that will seriously damage their ability to continue to contribute as much as they do to the British economy. As my noble friend Lord Cormack, said, those who stay after graduation are often the people who contribute the most to academic research, industrial start-ups or the businesses they build up. Those are all factors which I feel that the Government have overlooked in this rather ill-conceived measure.

Photo of Lord Hope of Craighead Lord Hope of Craighead Judge

My Lords, I should like to say just a few words in support of the amendment of the noble Lord, Lord Hannay, based on my experience as chancellor of Strathclyde University for 17 years. Having spoken to many students of the kind we are talking about and having hosted alumni events overseas, I think that my experience has been very similar to that described by the noble Lord, Lord Cameron, in that we have trained those students in our country and find them in positions of great influence in the countries to which they went after leaving.

I shall not repeat the points made so well by so many other noble Lords; I endorse all of them as background to what I should like to say. Perhaps the Minister will be kind enough to focus precisely on what the amendment is intended to do. If he reads its wording, he will see that it encompasses all the various things in Part 3: access to tenancies, bank accounts, driving licences and other services. Of course, among the services is what Clause 33 deals with: access to the health service. There is a difference between the Clause 33 matter, which I shall come back to in a moment, and the other services mentioned in the opening words of the amendment.

The difference is this. As I understood the Minister’s words in the earlier debate, the purpose of the other clauses is to flush out people who are not entitled to be here. It is to deal with people who are not legal migrants. We find that in Clause 16(2), 35(2) and 42(1) all of which direct attention to people who require leave to enter or remain in the United Kingdom but do not have it. I raise this point because the amendment is dealing with tier 2 and tier 4 visa holders—people who, because of the terms of their visas, are entitled to be here. Bearing in mind all the points that noble Lords have made, why is it necessary to subject tier 2 visa holders and tier 4 general visa holders to these restrictions? Why is it necessary for them to go through these hurdles to have access to, for example, a bank account? Why is it necessary to do that for driving licences?

As for Clause 33, that is a different point and I do not want to go over the debate that we had earlier this afternoon. However, while I did not intervene in that debate because the Minister was under great pressure from many people who were doing that very thing, there is one point that struck me in looking at Clause 33. It is that its wording, which is designed to confer a power on the Secretary of State to make provisions for charges to impose, begs so many questions. Who, for example, are the persons on whom the charge is to be imposed? Clause 33(1)(b) refers to,

“any description of such persons”, but who are they and what is the intention of that provision? We then have all the various steps in subsection (3), including the points that other noble Lords drew attention to. With the greatest respect, my suggestion is that the noble Lord and those advising him should have a very careful look at the wording of Clause 33. I suspect that the debate which we had earlier, and which I am not going to rehearse, has flushed out some points of real concern about the breadth of the wording, what it is really intended to do and whether it is necessary to do what it is seeking.

Quite apart from that, there is the point that others have made: that to subject overseas students to this sort of extra charge is bound to have consequences. Two words struck me as I have been listening to the debate. One was “cumulative”, in the point made by the noble Lord, Lord Hannay. It is about the cumulative effect of all those measures that are made. The other was “perception”, because perception is fuelled by rumour. Figures have been put forward in this debate as to what students in this country, and perhaps overseas students, are thinking. What about all those who are wondering to which country they should come? They are the people whose perception should really worry us. There are also the rumour makers. Their rumours may not be based on accurate figures, which may have been the point that the noble and learned Lord, Lord Wallace of Tankerness, was making the last time that we spoke. However, the fact is that the rumours and the perception are there. The Government really have to face up to the fact that to pile on more cumulative items on to this package of things which are fuelling that perception is very ill advised. I hope that the Minister will explain to us why he believes it necessary to do that.

Photo of Baroness Benjamin Baroness Benjamin Liberal Democrat

My Lords, I support Amendment 49, moved by the noble Lord, Lord Hannay, and I agree with everything that has been said so far in support of that amendment.

I would like to highlight the views of the students’ guild at Exeter University, where I am chancellor and so I express an interest. The students’ guild has raised concerns on behalf of the international students at the university, with whom it has had several meetings. The most worrying thing to come out of this meeting is about the proposal that international students must prove to potential landlords that they have the right to be in the UK before they are allowed to secure accommodation. As many international students are required to secure accommodation before they come to the UK, this poses an unnecessary and potentially impossible burden for them as they will not be able to present the documentation needed. The students’ guild also feels that this check will force many to endure extra expense, as letting agents charge for the process, yet the Government gain no further value in this monitoring. In addition, it feels that landlords may turn anyone who they perceive to be from international backgrounds away from their accommodation because they do not understand how to check for immigration status and do not want to risk the £3,000 fine.

A recent NUS survey of more than 3,000 international students found that 28% felt that their international background already had a negative impact on their ability to find accommodation, and they fear that the Bill will make it even more difficult. This is not a workable policy and international students will have to pay the price for the UK Government’s attempt to implement it.

Exeter University prides itself on doing a thorough check on international students when it comes to securing accommodation for them and strongly feels that it is best placed to do so in a controlled and responsible manner. The students’ guild believes that landlord checks, together with the proposed healthcare levy and the loss of appeal rights, will further undermine the attractiveness of the UK as a study destination, particularly after the removal of post-study work visas. International students bring not only economic benefits to the UK but diversity and a global perspective to Exeter. They are an integral and celebrated part of Exeter’s experience and the guild is very concerned at the damage, measurable and immeasurable, that the Bill will cause to students’ experience on its campus.

On graduation days at Exeter, I embrace graduates from all corners of the world. It is like being at the United Nations. I tell them to go out and change the world, to make a difference, and they all promise to do so but they also express their love and allegiance for Exeter and to the UK. I would hate to see this pledge disappear and to see that devotion and loyalty to our country damaged in any way, so I sincerely hope that the Government will reconsider these proposals. I so look forward to hearing the Minister’s response on these matters.

Photo of Lord Marlesford Lord Marlesford Conservative 6:45 pm, 10th March 2014

My Lords, I would like to speak, as briefly as I do passionately, in support of the noble Lord, Lord Hannay. My noble friend the Minister is well aware that I have always been enthusiastic about the proper, effective and efficient control of our borders in the national interest. Indeed, there are a number of areas in respect of national security where there is much more that can be done. I hope to introduce some amendments on Report to fill some of those gaps.

However, it is very sad that, when a government department is seeking to produce policies to deal with sensitive issues and there is a choice between being subtle and acting in a crass manner, all too often the crass seems to win. I am convinced that the overwhelming empirical evidence is that students who come to this country, whether they be at schools, universities, business colleges or military establishments such as Sandhurst, Cranwell or the Royal College of Defence Studies, contribute hugely to their own future as well as ours. One of the features of this relatively small country is the way that we act as a catalyst in world chemistry. We are a catalyst for tolerance, for the rule of law, for decency and for the cultural and political aspects of what we call civilisation. I would never be able to vote for something that reduces our country in respect of being that catalyst.

Photo of The Earl of Sandwich The Earl of Sandwich Crossbench

My Lords, the Minister will not be surprised that I wanted to have a last word about colleges. We have many illustrious representatives of the universities but every time that we have this debate I think, “Why has no one mentioned the colleges?”. The proportion of foreign students in our colleges and other institutions is quite a bit higher. The noble Lord, Lord Hannay, refers in the amendment to “all institutions”, so they are covered, but the noble Baroness,

Lady Williams, made an important point about the sustaining of courses: if you do not have enough students, you do not have enough courses. This is happening right now. I know personally of a college in London—I am not a representative of it—that is losing staff and courses as fast as it is losing its students. I think that last year they had an 80% loss, which they are now trying to make back up again. I remind the Minister of my interest there.

Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth Conservative

My Lords, in opposing the amendment, I certainly do not do so in any spirit of being against the importance that higher education students have to this country; clearly, they are important. We have had some very passionate speeches, with which I find myself much in agreement, about the danger of speculation, rumour and perception. However, it is important that we keep the changes that are put forward in perspective, and that we look at some of the facts as well. I put down some Written Questions and had back some answers based on figures from the Office for National Statistics about student numbers from some of our important markets. The latest figures available show significant rises from China, Hong Kong and Malaysia. Admittedly there are falls from India, but that is against a background of a fall in the value of the rupee, and other countries, such as Australia, have also noticed a fall in Indian student numbers. One or two noble Lords suggested that already a drop in student numbers was feeding through. That is certainly not true of many of our important markets.

Yes, perception is important, as are overseas students, but I would like to say something specific about the health charge, because I do not think that the amount has been addressed directly. The noble Lord, Lord Patel, suggested that we were suggesting that students were making calls on the health service disproportionately. I do not think that that is being suggested. I accept that that is not remotely the case.

Photo of Lord Patel Lord Patel Crossbench

Just to clarify, my Lords, I was suggesting that students do not make disproportionate claims on the NHS.

Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth Conservative

That is certainly true but of course the charge is lower than the charge for other people, so that is going to be recognised in the proposal. The amount of the charge, at £150 per year, is significantly less than the average student would cost the health service, and I accept that that is as it should be. I think that the charge is actually lower than for other people. We need to get in perspective just how much the charge is: it is £150. I am not minimising that but, if you look at it spread over a year, and many of the students at a higher level will be here for a full year, you see that it is the cost of a Sunday newspaper each week throughout the year. It is important to keep that in perspective.

I look at the charge in terms of whether it is fair. I know what the noble Baroness, Lady Warwick, suggested, but we have to look at it in the round against the other changes. Compared with the other proposals, is it not fair that students should pay a charge, a levy, as well? I think that it is, against the background of the Bill and indeed of the other people in this country who have contributed.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Chair, EU Sub Committee F - Home Affairs, Health and Education

I am most grateful to the noble Lord for giving way. I was a bit puzzled by his saying that the charge is spread over a year. The whole point about this charge is that it is not spread over a year but is paid up front. Moreover, if you ask for a visa for the whole of your study period, the charge is tripled and up front.

Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth Conservative

I was specifically addressing the health charge. When I say that it is spread over the year, I mean that the benefits are spread over a whole year, and many students are here for a whole year. I appreciate that it is paid as a lump sum. On the issue of fairness, I think that it is fair, looked at across the broad sweep of the changes that are being proposed.

The other issue is whether the charge is competitive. Some noble Lords have cited the position in the United States. As I understand it, they require insurance, and the cost of that is at a much higher level. The USA is the chief market for students; more students go there, as has rightly been said, than elsewhere. I am not suggesting that we slavishly follow the USA, but, if we are going to make the point about competition, we have to look at other states and how they handle this issue. Many of them have a charge or require insurance. We have to look at it globally in that way.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, I suspect that we are rapidly moving into territory where everything has been said but not everyone has said it. Given that, I wanted to respond not only to the noble Lord, Lord Bourne, but also to my noble and learned friend Lord Wallace of Tankerness, who responded a week ago to Amendment 26 from the noble Lord, Lord Hannay, and my noble friend Lady Hamwee’s Amendment 80 to reassure us about the impact of the Bill. The fact is, though, that the Bill exacerbates the impact of previous policies towards overseas students. The noble Lord, Lord Hannay, and many other noble Lords have talked about the contribution to the UK economy and to soft power, while my noble friend Lord Phillips has talked about personal ties.

However, the hard figures already show a drop in overseas student numbers. My noble and learned friend Lord Wallace of Tankerness, and indeed the noble Lord, Lord Bourne, today, have taken comfort from the increase in Chinese students in particular in recent years, compared to Australia and France. If the riposte of the noble Baroness, Lady Warwick, and my noble friend Lady Williams was not enough, the recent British Council document Education in East Asia—by the Numbers (Making Sense of the Slowdown in Outbound Student Mobility from China) shows a global slowdown in outbound Chinese student numbers. This demonstrates that we cannot stand still and that we need to increase our share of Chinese students if the numbers are not to fall. That is the very latest document from the British Council.

We cannot take the risk of alienating aspiring students from China and other emerging markets. My noble and learned friend Lord Wallace said:

“We are still an attractive proposition for people wishing to come and study”—[Hansard, 3/3/14; col. 1192]— but he himself admitted to us that a good story is not being told and it cannot be told with the Bill as it is. No one quarrels with measures designed to prevent abuse of the immigration system, but if we do not redress the impression—indeed, as the noble and learned Lord, Lord Hope, said, the perception—that students are not welcome, we will see more severe reductions in student numbers. What better way to counter that impression than to totally exempt overseas students from the Bill?

Photo of Lord Woolf Lord Woolf Crossbench

My Lords, the noble Lord, Lord Clement-Jones, indicated that nearly everything that people wanted to say has already been said. I am only too conscious that that is the truth, because the second of the two short points that I wanted to make has just been made by the noble Lord himself.

The reason why I think the amendment should be welcomed by the Government is that it is a signal that we do want students. I know a bit about the university world because for a time I was chairman of the council and pro-chancellor of London University and then chairman of the council of University College London. What is needed is something to point to so as to destroy the perception, which is undoubtedly increasing, that this country does not want students. If we made this exemption, when those who are attached to universities travelled the world to recruit students, as they do, they could respond to that perception by saying, “This is nonsense. Look at what we did in the Immigration Bill”—which by then would be an Act of Parliament—“and you can see that it takes a step which positively is favourable for students”. That would be a very important message.

I want to make a point that I do not think has yet been mentioned. Although I agree with everything that the noble and learned Lord, Lord Hope, has said, I fear that he was probably more economical with his time than I am being with mine and did not want to mention it, but if you travel to many parts of the world, as the noble and learned Lord and I have done, you find that in most countries you visit there are substantial numbers of former law students who are struggling to establish the rule of law there. The interest in the rule of law around the globe is growing all the time, and its importance in international affairs is being constantly demonstrated. The Statement we had today emphasised the importance of the rule of law. Students who have received a grounding in law in this country go back to their countries and are the champions of furthering the rule of law. So, again, it is right to say that we want to be able to make ourselves as competitive as possible in that regard.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport) 7:00 pm, 10th March 2014

What an excellent debate this has been, my Lords. I have counted 16 speakers on one side, and one on the other. I congratulate the noble Lord, Lord Bourne, on putting his head above the parapet. Although I think he picked up some of the arguments, I did not think his heart was entirely in it, but he put up a brave show. There was lots of vigorous nodding on the Front Bench, but all to no avail.

This amendment seeks to exempt bona fide overseas student from the provisions relating primarily to housing and health charges because I do not think, despite the fact that the amendment says so, that bona fide students are caught by the measures on bank accounts and driving licences, but I would be grateful if the Minister would confirm that when he responds.

This amendment has received considerable support from around the House. We should not really be surprised at that. I took part in a debate about nine months ago that was led by the noble Lord, Lord MacGregor, whose committee had reported on just this point. That debate was again virtually unanimous in recommending that the Government’s then policies should be reviewed carefully to ensure that they supported the arrival and proper education of students from overseas, but here we are.

There seem to be two main thrusts to the arguments which have been made by noble Lords today: first, that this series of measures is one of a number of hurdles and burdens that, taken together, represent an attack on our universities, making it more difficult for students from overseas to study here and thereby endangering one of our most successful exports; and secondly, that the measures are unworkable, possibly discriminatory and overly bureaucratic, will not achieve what they set out to do and should be withdrawn. We have a great deal of sympathy with both those arguments, and we will be listening carefully to what the Minister has to say on the questions that have been raised this afternoon, and I am certain that we will be returning to this matter on Report.

At Second Reading, I referred to the recent BIS publication International Education: Global Growth and Prosperity. Its introduction states:

“There are few sectors of the UK economy with the capacity to grow and generate export earnings as impressive as education”.

It goes on:

“Overseas students who come to Britain to study make a huge contribution to our economy”.

As we have heard, the most recent estimates are that overseas students paid about £10.2 billion net in tuition fees and living expenses in the UK. They boost the local economy where they study as well as enhancing our cultural life and broadening the educational experience of the UK students they study alongside.

This BIS report makes it clear that attracting international students is not an easy matter and that we have many competitors. If the numbers of international students in higher education is to stay as it is or even to grow, there are a number of things we must do right. The report picks out that,

“we must show that the UK values international students, will provide a warm welcome and support while they are here and will keep in touch after they go home".

The questions for the Minister when he comes to reply are, first, whether the measures proposed in the Bill support the assertion made by the Government that the UK is open for international students and that they are welcome to come here; and secondly whether the measures in this Bill help, not hinder, both that general supposition and the reality faced by overseas students in gaining a visa and making a success of their studies here.

There are a number of other questions that I hope the Minister will respond to. He has a good record, not of answering across the Dispatch Box, but at least in writing to us, and I hope he will pick up the various points that have been made. As I was listening, the questions that struck me included: has the department an assessment of the continuing viability of certain STEM courses in particular, of courses offered in higher education in general, and of certain institutions as a result of the decline in student numbers that we think will happen if these measures are introduced? This was spoken to very positively by the noble Baroness, Lady Williams, and others. The noble Lord, Lord Cormack, wanted to know more about the impact on soft power. Have the Government made an assessment of the reduction of soft power as a result of these measures? Has the Minister talked to the CBI about its call for changes in the way in which the visa arrangements operate for various important aspects of supporting the economy? Has the department made an assessment of competitor countries, such as Canada and Australia, and their measures for supporting overseas students? If it has done that, will the Minister put a copy of the evidence in the Library so that we can look at it, because it would make interesting reading? What assessment has the department made of the point made by the noble Lord, Lord Phillips, about personal contact? That is something that we all have experience of and recognise. He said that we cannot measure it in economic terms, and he may be right, but I think you probably could value it. It is certainly important in terms of the world that we live in.

In the commentary circulated after Second Reading, the Minister did not really engage with the issues that have been raised this afternoon. He wafted away rather airily some of the points made by several speakers and did not feel that the discouragement of international students would affect the way they choose the UK, although we have heard differently today. I think the view around the Committee is that these additional procedures and costs will create the impression that it is harder to secure a visa to study in the UK than it is in other countries. Even if that is not the case, it will add significantly to the up-front visa cost compared to our competitors. What evidence is there that the Home Office recognises the risks it is taking in relation to our competitiveness in this market?

On the detailed points, residential accommodation has attracted the most attention. There is no suggestion from what we have read from the Government that they have any interest in how this system must look to prospective students. As we have heard, international students already face difficulties in securing accommodation and are often made to pay large fees and advance rent payments. As the noble Lord, Lord Patel, reminded us, this Bill may result in landlords refusing even to consider international students as tenants or charging higher rents or additional fees to cover the extra hassle and administration costs. Does the Minister not agree that this clause could cause considerable anxiety and could add to the perception that the UK is unwelcoming?

In the Minister’s commentary, he said:

“I do not think the measures would discourage private landlords from letting to international students”, because,

“landlords in our university towns and cities are familiar with their clientele and know that they represent a sound and stable choice of tenant for their properties, in the main for at least an academic year if not longer”.

So that is okay then. To his credit, the Minister conceded in his commentary that certain categories of student accommodation would be exempted from the landlord’s provisions and said,

“we will look closely at the rationale for doing so when we consider this in Committee”.

I look forward to his further thoughts on this important point this evening.

Some noble Lords raised the position of international students who need to arrange accommodation in advance of their arrival. In the commentary, the Minister said:

“The Government intends to make regulations under the Bill which will provide for overseas students to be able to arrange accommodation in advance of taking up their studies in the UK, and for such tenancies to be entered into conditional on the production of the relevant visa or residence permit when the student arrives and takes up residence”.

It would be useful if we can have further information on that because it is clearly a very important point.

Given that overseas students with the requisite visa are often offered accommodation owned or administered by the university which is offering them a place, why does the Bill not recognise this and simply exempt all such university-provided accommodation, including the currently exempted halls of residence?

A number of noble Lords expressed concerns about the proposed introduction of the NHS charges. The main argument seems to be that international students and staff already make a significant contribution to the UK economy. International students bring in over £10 billion a year, while international academic staff pay taxes and national insurance while they are here.

The Government’s plans are for a health surcharge for access to NHS services of about £200 in general and £150 a year for students. As the noble Earl, Lord Howe, said in his letter to all noble Lords, over a working life, the payment of taxes and NI contributions usually provides a contribution to the NHS but new arrivals have not yet done so, and are not likely to be able to build up the long-term commitment and contribution that those permanently settled here have made. We do not object to the principle, since it is legitimate for those who are coming to partake in the system to make a contribution, particularly when the NHS is under pressure, but it is legitimate to press the Minister on whether a one-off cost, payable in full at the time that the visa is obtained, is actually in the best interests of our commitment to overseas students. That is the question.

A couple of other questions were raised during the debate, and I shall mention them for completeness. Has the department done any research to test whether this new system will discourage undergraduate and postgraduate applications and, if it has, will the Minister place a copy in the Library so that we can look at it? As the noble and learned Lord, Lord Hope, said, given that the Bill deals mainly with illegal immigrants, not those with leave to be present, why is Clause 33 really necessary? The point here is that the students are already covered by the visa application. Surely that can be considered sufficient on this point. Can the Minister when he responds, or separately in writing, give us the argument for the £50 discount on students? It is £200 for most people but £150 for students. If there are reasons for that, I would be interested to know what the economic argument would be, given the disproportionate use that is made of the NHS by students. Fifty pounds seems an odd figure to have chosen.

Fees, charges and living costs already make the UK a relatively expensive destination for study. As others have said, the Government cannot on the one hand impose new procedures and costs for prospective overseas students and on the other blandly claim that we are “open for business”. As the noble Lord, Lord Tugendhat, said, it would be wrong to think of this amendment as special pleading for the students. This is actually about our standing in the world, our history and our culture, and about our economy going forward.

Taken as a whole, the requirements for students who wish to study in the UK are in many cases much more stringent than in our competitor countries, particularly when you take into account language requirements, academic progression, limits on study time, the ability to bring in dependants and police registration. These new challenges will have an effect. Do the additional cost and hassle, and the impression that we are tightening up, justify the risk? Perceptions, as the noble Lord, Lord Cormack, reminded us, are important in this matter. Are we, as the noble Baroness, Lady Williams, said, killing the golden goose?

I look forward to hearing the Minister’s response. However, like the noble Lord, Lord Hannay, I believe that we will need to return to this issue on Report.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach The Parliamentary Under-Secretary of State for the Home Department

Well, my Lords, this subject certainly engenders good and powerful debates. If arguments are repeated, perhaps noble Lords feel that they are worth repeating. I have to repeat my arguments. I am afraid that the Government cannot accept the amendment, but perhaps I can help noble Lords by telling them why that is, and why we feel that, despite our policy of welcoming the brightest and the best with no limit on numbers, students are an important part of any strategy which deals with immigration.

I start with that strategy. The noble Baroness, Lady Warwick of Undercliffe, challenged me on the whole business of net migration. Reaching the tens of thousands remains the Government’s objective. We chose a net migration target because we want to control immigration due to its effects on social cohesion, infrastructure and public services. These arguments are frequently discussed in other areas, but they form the background to why this legislation has come forward. Jobs and wages are affected by migration but, when it comes to students, there is no cap on numbers—I repeat, no cap on numbers—of genuine students who want to come here. They are welcome. Those who have the right qualifications, sufficient funds to cover their fees and maintenance costs and a good level of English can study here, and there is no limit on numbers. Our reforms, to tackle the widespread abuse that was occurring in the system we inherited, have favoured our world-class universities.

Those reforms are working. The number of issued student visas has dropped by around 27% from the high in 2009, while visa applications from university students were up 7% in the year ending December 2013 and applications from students going to Russell group universities were up by 11%. Higher education statistics show that numbers of international students in our universities held steady in 2012-13, with a small decline of 1%—but numbers of UK and EU students have fallen by more than that. It is true that there has been a decline in the number of Indian students at our universities, but this followed a period of soaring numbers and, by contrast, there has been strong growth in numbers of students from China, Malaysia and Hong Kong in 2012-13.

A British Council survey published in 2012-13, of more than 10,000 young people across India, showed that the UK was their most favoured destination, chosen by 21% of respondents. Young Indians put British universities first for postgraduate courses. As my noble friend Lord Bourne of Aberystwyth said, we are not losing out to our competitors. The UK is the second destination of choice for university study, with only the USA attracting more international students. Numbers of Indian students going to universities in our competitor countries have also fallen.

The noble Lord, Lord Stevenson, spoke of visa costs; we will be discussing those when we discuss the fees orders. We do not think that the cost of a student visa deters students from coming here. It is around average when compared to our competitors and represents a small proportion of the overall cost of studying here. The addition of the NHS surcharge will not, in our view, alter that balance. I will address specifically, giving graphic examples, some of the costs that can be incurred by students when they are here when we debate amendments that are specifically about those surcharges.

In considering the amendment, I invite noble Lords to reflect upon its practical effect. The noble and learned Lord, Lord Hope of Craighead, sought to know why students seeking accommodation, bank accounts, driving licences and access to the NHS were included in the Bill. They are already required, either under the current law or current practice, to prove their identity. There is no extension, and the noble Lord, Lord Stevenson, acknowledged this in his speech. Additionally, when applying for a driving licence or seeking hospital treatment, they already must demonstrate their immigration status in the UK. Genuine students do this now by presenting their biometric residence permit or their passport and visa documentation. That is all that is needed for an immigration check, but it is important and that is why they are included. Of course, they are not the target, but the people who do not possess that identification are. I hope that the noble and learned Lord can therefore understand why it is important that we use this weapon in addressing illegal immigration.

I know that a number of noble Lords will want to talk about landlord checks. Schedule 3 already provides an exemption for specific types of student accommodation. As I have previously indicated, we have listened carefully to concerns raised by the higher education sector about the adequacy of this exemption, and we will return to this later in the debate. I do not wish to spoil the denouement, but the next group of amendments deals specifically with landlord checks and it would be more appropriate to deal with those there.

I cannot repeat sufficiently that the Government take every opportunity to communicate the message that students will find a warm welcome in the UK, even if it takes a debate of this type. I can say it again: there is a warm welcome for students in this country. I hope that noble Lords will take that message on board and that Universities UK will be reinforced in its argument in promoting higher education in this country.

I mentioned the Indian situation: young Indians put British universities first for taught postgraduate courses. The UK was also top with the United States as a quality destination for research doctorates and undergraduate degrees. We are a premier centre for higher education in the world. As I said at Second Reading, we have an excellent offer for university students. There is no limit on the number of students who can come. University students can work here, and postgraduates can bring dependants. We have ensured that there are good opportunities for graduates to stay in skilled work or to set up or develop a business.

The indications are that that approach has been successful, and we continue to attract students to study at our world-class universities. Visa applications were up by 7%, and more than three-quarters of all student visa applications are for studies at a higher education institution. The most recent higher education statistics show that the number of international students studying at Russell group universities rose by 5% in 2012-13 and that the number of those enrolling rose by 4% in the same year. A comparison of the most recent UK higher education statistics with those of other countries shows that the UK continues to attract a good share of the international student market. For the year to September 2013, the UK issued 1,873 more visas to Indian students and 33,011 more to Chinese students than Australia.

The UK is the second most popular destination, as I said before, and student numbers in Australia and France have dropped at a similar rate to the UK. Although Canada has experienced strong growth, it attracts only a quarter of the number of international students who come to the UK. There was strong growth in students coming to our universities from China, up by 6%, Malaysia, up by 3%, and Hong Kong, up by 15%, which shows that the UK still succeeds in attracting high-quality students.

Calls to exclude students from the net migration figures miss a basic point: there is no cap on the numbers. Changing the way we measure migration would not make any difference to our student migration policy. The United Nations definition of net migration includes all migrants who change their place of residence for 12 months or more. That acknowledges that all migrants, students included, have an impact on communities, services and infrastructure for the time they are here.

All our competitors—Australia, Canada and the USA—include students in their net migration figures. I should also say that this is not a perfect world. The noble and learned Lord, Lord Hope of Craighead, talked about the justification for students and asked why we need to have any controls on them at all. It is not the case that all students leave. In the year to September 2013, while 124,000 non-EU students came to Britain planning to study for over a year, only 49,000 left the country. I hope that noble Lords will just think on those figures and then perhaps put themselves into the position of the Home Office, which seeks to make sure that we have legal migration into this country.

Photo of Lord Hope of Craighead Lord Hope of Craighead Judge 7:15 pm, 10th March 2014

Is the noble Lord suggesting that the unaccounted-for balance is made up of overstayers without leave to remain or people who, having studied here, are given permission to remain for longer than was originally envisaged?

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach The Parliamentary Under-Secretary of State for the Home Department

I think that the noble and learned Lord will understand that I suggest both. The graduate course has been a success—we are increasing the numbers of students who are staying on for postgraduate work—and the business entrepreneur course is equally successful. There will be some, but there is unfortunately still some evidence that the tier 4 student migration group—it is a special route; it is not the same as everything else; students are treated as a special case—is being misused in some cases. That is why it is important that we have checks in place to make sure that that does not occur.

My noble friend Lady Williams suggested that the exceptional talent route has dismally failed. We do not accept that. We recognise that the number of visas that are taken up under that is low, but it was always thought that that would be the case. However, we are working with all the competent bodies—the Royal Society, the Royal Academy of Engineering, the British Academy and the Arts Council—to improve the process so that the visa process payment will not be paid until the competent body has endorsed the application. We are working with these bodies to ensure that the scheme is a success.

In answer to my noble friend Lady Benjamin, it is not the case that international students are unable to stay on and work. The post-study work route, which was much abused, which allowed all students to stay on and look for work, has been replaced by the graduate level job scheme, and we have made a success of that.

The noble Lord, Lord Stevenson, asked whether the cost of the surcharge in relation to the cost of studying was competitive with other countries. Yes, it was addressed in our published impact assessment, where the noble Lord will find the answers to a number of the questions he asked. However, I will make a point of writing to him with a full answer to all the various questions, some of which lie outside the Home Office’s own immediate area of engagement.

I understand that people want to make sure that the Government do not do anything that damages the reputation of this country as a centre of intellectual and academic excellence. I accept that. Speaking as a member of the Government, I remind noble Lords that we have a responsibility to seek to control immigration. All the measures in the Bill are about methods of making sure that people who are in this country are here legally.

There is no difference between us on the benefits that overseas students bring to this country. That is why there is no limit on numbers, and why I will continue to seek to reassure noble Lords on the Bill. I hope that we will have a chance to discuss it before we come back to this issue on Report. Meanwhile, I hope that the noble Lord, Lord Hannay, will withdraw his amendment.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Chair, EU Sub Committee F - Home Affairs, Health and Education

My Lords, I thank all noble Lords who participated in a very impressive debate. I thank in particular my three co-sponsors of this amendment, the noble Baronesses, Lady Williams and Lady Warwick, and the noble Lord, Lord Tugendhat, who so eloquently set out the case which I tried to introduce. There were many other remarkable contributions to this debate, so I will not try to pick out any others.

In a previous debate on this subject—we are getting quite used to having debates on this particular subject—I likened the Minister to St Sebastian, filled with arrows but still smiling. The best pictures of St Sebastian always show him smiling despite the number of arrows that have gone through him. The Minister always handles this with great good temper. I was very pleased on this occasion that he had one supporter, as that removed the sense that we were indulging in an unfair debate.

I hope that we can stop having a war of statistics. The Minister came back again to the point about the UN figures. No one is contesting that the Government will continue to submit to the UN figures in the way that the UN has asked for—that is to say, all people who stay for a year or more. But there is not the slightest difficulty about disaggregating those figures and putting them together again before sending them into the UN. If the Government wanted to, they could leave students out of this Bill completely but, at the same time, continue to make the same returns. I hope that we do not have to come back to that. I think that the war on statistics has gone about as far as it can go. Frankly, citing several times the enormous enthusiasm for Indian students to come to this country sits a little oddly alongside a 49% drop in the past two years. If that is enthusiasm, I do not think we can afford many more victories like that.

The one thing that I would like to pick out was the very perceptive statement from the noble and learned Lord, Lord Woolf, that if we really wanted to show that we want the brightest and best to come without any limit on numbers, we should pass this amendment, because that would send a message of complete clarity to all the people who may be hesitating and thinking that we are rather unwelcoming.

The Minister spoke about the Government’s overall aim to get net migration down to the tens of thousands—a policy that does not always seem to be shared by all members of the Government, but I know that it is the Government’s policy. He quoted that and seemed not to understand the contradiction between saying that and saying that there was no limit on students coming here. Students are 60% of that net figure. How on earth are you going to get down from 230,000 or 240,000 to below 100,000 without cutting back on students? The answer is that you are not. You either believe in one part of the policy or you believe in the other, but if you believe in both you are going to do the splits.

Before we get to Report, I hope that the Government will take into consideration all the views that have been expressed around the House. There is an easier way out of this, which is in the national interest, and I just hope that the Government will take it. Meanwhile, I beg leave to withdraw the amendment.

Amendment 49 withdrawn.

Photo of Earl Attlee Earl Attlee Lord in Waiting (HM Household) (Whip) 7:30 pm, 10th March 2014

My Lords, I beg to move that the House do now adjourn—I mean, that the House be resumed.

House resumed.