My Lords, I am grateful to the Minister for his explanation. In some ways the orders are fairly straightforward. The Minister will be pleased to know that we certainly support their principle and do not intend to oppose them. However, it would be helpful to have further clarification on detail. The Minister is smiling because he knows that I always seek further clarification and he would not expect me to do otherwise.
We have just finished the Committee stage of the Immigration Bill and it is helpful to have this debate against that backdrop. Many of the issues we have been discussing in the Bill have common themes with these orders.
On the first order, I understand that there is a flat 4% increase across the board. I tried very hard when the Minister was speaking to try to do some calculations in my head but the maths was beyond me at such short notice. It is projected that some increases will be more than 4% and some will be less. Is the Minister able to give me more detail? I do not expect it today; I would be happy with a more detailed breakdown in writing of the figures he gave for the percentage increases for different kinds of visas, given that it is supposed to be a 4% increase across the board.
I understand that this is an income-generating measure. I entirely agree with the Minister’s point that those who benefit should pay the cost; I have no difficulty with that. However, when reading the impact assessment I struggle to understand how much of this is to cover a shortfall in Home Office funding from the Government and how much is to cover the costs and ensure that this is self-financing. The impact assessment makes it clear that funding for the immigration system is going to reduce over the five-year period of the current comprehensive spending review. Over the CSR period financial planning requires the Home Office to deliver the maximum amount of fees agreed with the Treasury under the CSR. Any income above that amount is surrendered to the Treasury’s Consolidated Fund. I am trying to understand how much additional income the Minister thinks would be generated from the fees being proposed in this order today, as well as the impact of those increased fees.
I have already said that we support the principle. However, during the passage of the Immigration Bill the impact of the Government’s immigration policies on overseas higher education students has generated considerable discussion in your Lordships’ House. I would be keen to know what information is available to the Government and how robust the evidence is on whether foreign students are going to be deterred by the increase in fees. I know there are figures on applications in the impact assessment, but I am not sure how those are arrived at. More information about the process used and clarification of the figures would be helpful.
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Two higher education representative bodies have raised concerns with the Government. One of the bodies—GuildHE—says that,
“proposals designed to generate more income from immigration services could serve to deter international students and staff and, ultimately, lead to reductions in income in these areas for the Government while inflicting serious damage both on the higher education sector and on the wider economy”.
It also asks the valid question why fees paid by applicants under tier 4 should be set anywhere above cost recovery level. It would be helpful to have more information on that. The figures for overseas students show that the number of visas issued to Pakistani students was down 55% on the previous 12 months, and that for Indian students it was down 21%. I know that the noble Lord has heard these arguments several times in Committee on the Immigration Bill but noble Lords are concerned that universities should not be disadvantaged by any other measures that the Government may take, given that they have already taken a bit of a hit with the falling number of overseas students. I would appreciate it if the Minister would address that point.
The Tourism Alliance’s response to the consultation called for tourist visas to be set at a competitive level to Schengen visa rates. I assume that analysis has been undertaken of the impact on tourist numbers, but if more information on that is available, it would be helpful to have it. The Employment Lawyers Association argued in its consultation response:
“Any increase in fees should only be implemented if it is certain that service standards can be maintained and/or achieved”.
This is also an issue we discussed in the debate on appeals in the Immigration Bill. If the Minister can give assurances about an improved level of service with an increase in fees, that would also be welcome.
I was interested in the Minister’s comments on illegal immigration. He referred to our concerns that the Government should take measures to tackle illegal immigration and those employers who abuse both British and migrant workers by not fulfilling the proper terms and conditions of employment, paying lower wages and trying to bypass health and safety provisions. When he said that we shared a common objective in dealing with this, I was somewhat surprised to hear him refer to a surge in numbers. If he can say something more about that, it would be helpful. He frowns at me but he used the phrase “a surge in numbers” when he talked about illegal immigration and illegal employment. It would be helpful to be given any figures he has on that, albeit it always seems to me that figures on illegal immigration are somewhat less than robust.
The Minister will not be surprised to hear that we support the order, but having read through it, the Explanatory Notes and the impact assessment, I have a few questions which it would be helpful if he could answer. My questions concern the same issues as I raised on the Immigration Bill—that is, the evidence base for decisions that are taken; the impact the measures proposed by the Government will have; and the practicalities of implementing them. The reason for increasing penalties on the illegal employment of migrants was originally to act as a deterrent to employers so that they would not employ illegal migrants, and to punish those who broke the law. As I said, this practice is bad for UK citizens and can often mean a race to the bottom in terms of wages and employment conditions. Therefore, it is in everyone’s interest that we tackle this issue.
The impact assessment was helpful. However, for the legislation to be effective it has to be enforceable and fully enforced. The impact assessment states that
around 10,000 penalty notices have been issued from the introduction of the relevant legislation in February 2008 to the end of last year. Is it possible to have an annual breakdown of the number of penalty notices issued in each of those years from February 2008 through to the end of 2013? I anticipate that when the legislation was first introduced, there would have been a slow start but that the number of prosecutions would have picked up by 2013. If the Minister does not have the annual figures with him today, it would be helpful if he would write to me with that information. In those six years, the penalties levied amounted to more than £90 million. On appeal, that fell to £70.8 million. I would like some clarification on how that figure is broken down.
Less than £30 million of that money has been collected. According to the debate in the other place, as well as the impact assessment, £20 million has been written off. The Minister in the other place, James Brokenshire, when asked about it said that £7.2 million of the written-off money related to companies that had been dissolved. I should like an assurance that some work will be done on that because an issue in consumer law is that although no action can be taken when a company is dissolved, the directors or their wives can crop up as directors of other companies so that, in effect, the company continues but with different directors. Are directors of dissolved companies kept track of to see whether they go on to set up anywhere else where they may continue the practice of illegally employing migrants? When the Minister in the other place was asked about the remaining £12.8 million that had been written off, the only response he could give—I read this several times to make sure that I had it right—was:
“I am quite sure that there will be a number of different reasons”.—[Official Report, Commons, Twelfth Delegated Legislation Committee, 19/3/14; col. 11.]
What are they? Why has £12.8 million in penalties been written off? If it is not because companies have been dissolved, disappeared or broken down, what are the reasons? It was not helpful for the Minister in the other place to say that. If the noble Lord can enlighten us about what the reasons are, it would be helpful.
Mr Brokenshire also said that there were measures in the Immigration Bill to deal with this point on the collection of penalties but I am not sure what they are. It would be useful if the noble Lord could address how the Bill will address enforcement and the collection of civil penalties. We start with the £90 million, which was reduced on appeal; then £12 million was written off for other unspecified reasons; and, finally, less than £30 million has been collected. That still leaves over £20 million in penalties unaccounted for. The Minister in the other place said that the debts were being pursued. How long are they being pursued for before they are written off? How much more is likely to be written off? If it is the case that the money is being pursued and the full £20 million will come in, I would be very happy to hear that. However, I am concerned that we could be writing off large amounts of money when there is clearly an issue. If employers think that the law is not enforceable and they do not have to pay the fines—simply because they can shut down the firm, the fine will be written off or for “other
reasons”, according to James Brokenshire—the law is not particularly effective. How long ago were those penalties which have been written off or awaiting collection imposed? How long do we have to wait before payment?
The point that I am trying to make is similar to one I made about the Immigration Bill. The law is effective only if it is properly enforced. If we are writing off huge amounts of penalties owed to the taxpayer, there is a serious problem with the effectiveness of the legislation before us. I hope that the noble Lord can reassure me on those points and I look forward to his response.