With this it will be convenient to take the following amendments: No. 300, in page 45, line 40, at end insert
'but no fee shall be payable by non-profit organisations.'.
No. 313, in page 46, line 7, at end insert
'and shall make provision for exemption for non-profit organisations'.
Since Labour took power in 1997, work permit regulations have been relaxed and simplified. That has had the dual effect of making it easier for employers to bring to the UK non-European economic area nationals, especially those in sectors with skill shortages, and of reducing the need for employers to seek legal assistance when making such applications. We welcomed those measures, as did various industry representative groups such as the Computing Services and Software Association and the Confederation of British Industry.
With that background, we are slightly perplexed by the recommendation to charge employers who need to make work permit applications. It seems contrary to the Government's assumed aims for several reasons. First, there is a danger that high charges will discourage some small and medium-sized businesses that have a genuine requirement to employ individuals from non-EEA countries from going through the formalities involved in applying. That could damage the businesses that are then unable to fulfil skills requirements. It may also encourage some employers to employ people outside the regulations, for example on visit visas. That practice is already widespread.
The second possible consequence is that because of the increased risk associated with making work permit applications, employers may be more likely to resort to using legal professionals to make the applications, thereby increasing costs again. That will give a major advantage to companies that have in-house legal departments, and will needlessly discourage companies with smaller profit margins and turnovers.
We are not blind to the possible benefits of introducing fees. It is estimated in the Bill that fees for the expected 175,000 applications next year will raise about £15.8 million, which will reduce the burden on the taxpayer. However, we are concerned about proposals to move that £15 million burden on to the shoulders of employers, who are already having to pay increased national insurance contributions. Another
possible benefit could be to discourage applications that are either fraudulent or likely to fail, but that might not happen. At the moment, among the worst offenders in the fraudulent use of work permits are recruitment agencies that masquerade as employers and body shop people to the UK. Introducing charges would have little or no effect on dissuading them from continuing, as the mark-up that they get from body shopping is so high that a fee would not be noticed. They will just pass the fee on to their unwitting candidates, as is often the case with legal fees.
Our final concern is about the Secretary of State's discretion to make an exception in certain applications. The aim is to raise £15.8 million through the scheme, and it estimated that there will be 175,000 applications next year, but we do not know whether all employers will share the burden equally. The Home Secretary may be considering excluding the health care and teaching sectors from the charges, so what level of charges should we expect for the other sectors? If the Secretary of State decides to exclude other industries as time goes on, how will that affect the companies that need to make extension applications? If the Secretary of State does not intend to exclude those sectors from charges, is it a good use of resources to be spending time moving entire funds from one branch of government to another?
However, as industry and skills requirements change, we do not oppose the provision to enable the Secretary of State to use his discretion on such matters, and we want to avoid yet another new Bill being presented in just a few years time. I urge the Secretary of State to consult widely on the issue, and recommend that he considers excluding from these charges small businesses with perhaps fewer than 20 employees, or with a turnover of less than £1 million. He may also want to consider making the first five or 10 applications in a 12-month period free of charge. We therefore propose that the charges do not exceed £150, so as not to put a massive burden on small and medium-sized enterprises. That figure is significantly lower than that of the United States or France. However, the Republic of Ireland and Germany followed our lead in relaxing work permit regulations, from which they have greatly benefited. They have not felt the need to introduce fees. We support the introduction of fees with some misgivings, but believe that the burden on business will not be too great if a maximum fee is introduced at this stage and if there is consultation on the other points raised.
Amendment No. 300 would insert:
''but no fee shall be payable by non-profit organisations.''
Several non-governmental organisations have expressed strong support for that proposal. The Immigration Law Practitioners Association in particular believes that a distinction needs to be made between profit-making and non-profit-making organisations on the fees charged for work permits.
Good morning. It is a delight to be back with the Committee. I know how much everyone missed me on Tuesday. My hon. Friend the Member
for Sheffield, Hallam (Mr. Allan) will return soon, and the full complement will be back in harness.
I endorse everything that the hon. Member for Woking (Mr. Malins) said on the amendments, which have our support as hon. Members will see from the amendment paper. When the Government consult on fees, they should consider the point that there should be no additional penalty for recruiting for the public services, and possibly for the charitable and voluntary sectors. There are various add-on penalties, not least due to the recent Budget changes to national insurance and to housing costs in areas of high housing demand. Anything that discourages public services, especially the health and education sectors, from bringing people in to work in their area should be avoided. I hope that the Government will make a clear policy statement about that.
What breadth of people do the Government envisage will be covered by the clause? There has been a welcome policy change from including only those people who are highly qualified to including those who may not technically be as widely qualified, but whom the labour market needs. We must be careful to avoid significant fees for work permits. We need many people to do jobs which, to be honest, are not at the most highly paid end of the market. Work permits greatly discourage them and those who act on their behalf.
I want to reinforce the point made by the hon. Gentleman, and add that we are all aware that the labour market contains good and bad practitioners. Many of the bad practitioners find any excuse for add-on costs, so we should be careful not to give them that opportunity. That is why an upper limit for the fees would be appropriate. I share the hon. Gentleman's view that there should be a provision for fees in secondary legislation, because of the flexible labour market. The method of charging may need to be varied, depending on how the market responds.
If, having advertised a specific job in this country, an employer cannot get anyone to do it, he is allowed to employ non-EC nationals, who are taken on for four years as a condition of their employment. They are expected to go home at the end of that period unless they can satisfy the requirement that no one else in the market is capable of doing the job. Can the Minister tell the Committee and those outside with an interest in the matter what the Government expect to be the normal initial period of permission, what period the fee will cover and what will be the criteria for renewal?
I can give the example of Australian constituent who was employed in docklands to do specific computer work. At the end of his four years he had become hugely valuable to his company. It is nonsense for that company to have to go through the process of re-advertising and to take someone on from scratch, and it is a penalty on industry. People who have established their validity and value must be allowed to continue in employment. It would be helpful if the Minister could state the Government's policy in that respect.
As hon. Gentlemen said, the purpose of the clause is to enable the Home Office to charge employers a fee when considering applications for work permits. That will focus the cost on those who benefit from the service. The work permit arrangements are used by a relatively small number of businesses, but the burden of operating the scheme is borne by all UK taxpayers and businesses. Introducing a fee for the work permit would mean that the users of the service pay for it. UK businesses tell us that the speed of our service is an important advantage to them when compared with the service to businesses elsewhere. Expanding the use of the work permit criteria places an ever-increasing burden on the general taxpayer, and stretches the resources of Work Permits (UK) so much that service levels are difficult to maintain. Charging for the service will help to maintain our present world-leading service. The change will bring us into line with other western countries; our turn-around times compare favourably with other countries, such as Canada and the United States, which already charge. They take from three to six months to consider cases.
Applications for work permits have increased from 70,000 in 1999–2000 to an estimated 135,000 in 2001–02. Despite that increase, the standard of service provided by Work Permits (UK) is exceptionally high. Almost 90 per cent of completed applications are considered within one day of receipt.
The top two nationalities applying for work permits are American, at 25 per cent, and Indian, at 23 per cent.
Concerns were raised about the effect on small businesses. The charge will be between £75 and £95 per application, which is marginal compared with the cost of recruiting people overseas. It is paid by everyone through tax. This measure will focus the charge on those who benefit from the service.
I am coming to that. The consultation process began on 15 April. We are examining its findings, and considering a sliding scale for certain types of applications. In the consultation document, we asked whether customers would prefer a flat-rate fee or a sliding scale. Due, I believe, to the likely added expense of a more bureaucratic system, the early indications are that most people would favour a flat rate. We believe that that is the way to proceed, but we are awaiting the results of the consultation before drawing conclusions.
We do not intend to charge the NHS and publicly-funded schools directly, but we may consider suitable
accounting arrangements. Hon. Members made a number of points about poor advice and practice from recruitment agencies. Clause 95 brings advice agencies under the regulation of the office of the Immigration Services Commissioner, so that we can avoid some of the problems that were mentioned.
The length of the permits will depend on the needs of particular jobs. The minimum is six months and the maximum five years, but extensions will be available beyond that period, particularly if someone demonstrates added value. Illegal working was mentioned, and there are measures in the Bill to try to tackle that. On the breadth of people covered, the work permits are obtainable only for medium to high-skilled workers—those at national vocational qualification level 3 and above. The measure also covers the new high-skilled migrant programme.
The fees will be set in line with Treasury guidance. It is important that fees are designed to ensure that the full economic cost of providing the service is recovered. Imposing an arbitrary cap on fee levels would be inappropriate. However, we envisage that, in the first year and the following two to three years, the figure will be significantly less than £150.
The fee will be set out in a statutory instrument subject to a negative resolution, but hon. Members will have an opportunity to object to the fee if they feel that it has become excessive. Setting out fee levels in a statutory instrument as opposed to primary legislation will provide much more flexibility, and will facilitate the efficient adjustment of fee levels if necessary.
On amendments Nos. 300 and 313, before the outcome of the ongoing consultation, which will be completed by 5 July, we will not propose any exemptions to the charge except prospective employers of people from countries that have signed and ratified the Council of Europe charter and the revised European social charter. Those countries account for about 5 per cent. of all work permit applications received, but we do not want to pre-empt the outcome of the consultation, as I hope hon. Members will understand. We are consulting a large number and wide range of employers, including charities and non-profit organisations.
Will the Minister ensure that the results of the consultation, particularly from the NHS, local education authorities and others that fulfil public service functions, are published in plenty of time before any decisions are taken, and that Parliament agrees the regulations? It is important that we see the results of the consultation, so that we know the views of such bodies.
Yes, those results will be published. If the consultation provides suitable evidence that we should consider exempting non-profit organisations, we will have to be clear on what organisations that category includes. We must take that into account, otherwise some organisations that people feel should be included may be excluded. We are reflecting further on the problem. The statutory instrument must clearly define which non-profit organisations will be covered by any exemption. If we conclude that such organisations should not be exempted at this stage,
the provisions will still allow us to introduce exemptions if necessary later. The regulations will be passed by a negative resolution, which provides an opportunity for hon. Members to object.
I hope that that explains the position and provides some reassurance about the Government's intentions. I hope that the hon. Gentleman will therefore withdraw the amendment.
That was a helpful response, but I have one quick question for the Minister to clarify. She implied that the charge would be less than the cost of administering the scheme. Is the idea to make the scheme self-financing by covering all the administrative costs? Is that Government policy, or will the taxpayer be expected to subsidise parts of the scheme?
Perhaps I did not make myself clear. I referred to the Treasury guidance, which is designed to limit fees within any cost structure to ensure that only the full economic cost of providing the service in question is recovered.
This has been a useful debate, in which we have fulfilled the Opposition's function of teasing out from the Government some helpful additional material, and I am grateful to the Minister for providing it. It will be read with great interest by the many businesses that take a deep interest in these matters. I thank the Minister again for her good answers, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
I should like to raise another matter. The office of the Immigration Services Commissioner was created under the Immigration and Asylum Act 1999 to regulate immigration advisers who did not fall under the jurisdiction of the Law Society or other regulatory bodies. Up to now it has not been clear whether work permits fall under the jurisdiction of the office of the Immigration Services Commissioner, partly because permits were previously issued by the former Department for Education and Employment rather than the Home Office, and partly because they did not constitute leave to enter or remain. We would welcome some clarification.
The Bill makes it clear that providing advice on work permit applications that are not exempt by some other condition will be regulated by the office of the Immigration Services Commissioner. However, some people are worried that the Bill's wording is too restrictive. Many larger companies have in-house teams to deal with work permit applications, as exemplified by WIPRO, an Indian software house, Merrill Lynch, Intel and PricewaterhouseCoopers. Such companies have no need to seek external legal advice.
Concern has been expressed that, under the current wording, it may appear that anyone providing such advice or making such applications will need to register with the office of the Immigration Service Commissioner, when even level 1 OISC registration
requires knowledge or information that has no relevance to work permit applications. It is felt by some people that that is unnecessary. Would the Minister at some stage consider whether the Bill should be altered to make it clear that in-house advisers will be exempt from that requirement?
After the general election the Government made the helpful announcement that they realised that we needed to look at our immigration policy again to allow people in whom we need for the labour market. They initially stated that people with particular skills and qualifications would be encouraged and a number would be assessed. After the White Paper they realised that a greater breadth of people was needed, not just those with qualifications. I gave the example that we need people to clean floors in public sector buildings or to wash cars just as much as we need doctors, nurses and highly qualified scientific workers. What sort of numbers do the Government expect will come via the work permit route? More than 100,000 a year come at present and the numbers might be significantly higher.
What is the Government's plan for the link between a work permit and more settled status should a person's employability make that logical? They might be given extended leave to remain in the first place and then indefinite leave to remain. I was speaking yesterday to a refugee from Iraq who is a surgeon and a specialist in renal medicine. He and his family have extended leave to remain. He is getting qualifications to practise here. If people in their late 40s come in via the work permit route with family and dependants and take the exams to work in the health service they will want to know that they can have a settled career. They could concentrate on giving themselves to the health service where there skills would be very valuable and not risk the possibility of having to return in their early 50s with all the difficulties that that would entail. This is not a trick question. I am just trying to get an idea of how we can have joined up government between the work permit and the immigration application routes for those with skills.
At recurrent problem that comes my way as a constituency MP is the difficulty of getting agreements in time for people who have come over on two-year work and travel visas. They often come from the old Commonwealth countries such as Australia and New Zealand and end up teaching in schools where they are valuable. Head teachers have come to me on several occasions about problems with deadlines. I just flag up for the Home Office and other Departments that we need a system that keeps up the general high standard of speed in dealing with cases where there needs to be certainty and where technically there is a change of status because the work travel visa cannot be extended beyond two years.
If people stayed on to teach in primary schools, for example, they would need a work permit extension of a different nature. Such attempts have occasionally
run up against the buffers and some good teachers have been lost from schools where they have settled and of which they have become an established part. The Minister may deal with that now, but if not, I am happy for her to deal with it later. I flag up the issue of that useful source of teachers in areas of teacher shortage, especially in schools.
I shall deal first with the point made by the hon. Member for Woking, on which I can reassure him. He is referring to clause 95. Employers who provide immigration advice or services free of charge to employees are exempted from the regulatory scheme until the end of the year. Amending and extending that exemption is an option and we will review it with the Immigration Services Commissioner and Work Permits (UK) before clause 95 is implemented.
On the points raised by the hon. Member for Southwark, North and Bermondsey (Simon Hughes), there has been a great effort to look at areas of shortage. He will know of such initiatives as the highly skilled migrants programme. He referred to other areas of shortage. We are looking particularly at the seasonal agricultural workers scheme and the working holidaymakers scheme, which are under joint review by Work Permits (UK) and other policy colleagues in the Home Office. Work is also in progress developing new schemes sector by sector to cover shortages. No target numbers have yet been agreed.
As I explained earlier, extensions of work permits are available, particularly if someone has demonstrated that they have added value. The hon. Gentleman raised a point about refugees. Work conversion courses are in place so that we can move quickly to ensure that refugees with particular skills can take up employment.
I shall write to Ministers about some of the practical difficulties that the doctor to whom I referred earlier raised about gaining access to the information. I found his points helpful in demonstrating the difficulty of finding out where one should go and whom one should speak to.
I thank the hon. Gentleman. I am sure that that will be extremely helpful. It is important to know people's direct experiences in such cases, because if we are to make the schemes successful, we need to know where people encounter genuine difficulties. I am sure that my Home Office colleagues have noted the hon. Gentleman's points about teaching and the two-year issue.
I hope that that further information is helpful, and I commend clause 94 to the Committee.
Question put and agreed to.
Clause 94 ordered to stand part of the Bill.
Clause 95 ordered to stand part of the Bill.