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Tier 4 Visa Requirements

Volume 530: debated on Monday 27 June 2011

14. What estimate she has made of the potential cost to the economy of her planned changes to tier 4 visa requirements. (61841)

The impact assessment estimated the net cost to the economy of the student and post-study work proposals to be £2.4 billion. There will be additional compensating benefits from reducing abuse, ensuring cohesion, and increasing public confidence in the immigration system, but it is not possible to quantify the impact of these changes.

I thank the Minister for his clear response. He refers to a cost of £2.4 billion. The best case scenario is a cost of £1 billion, and the worst case £3.5 billion, for a problem that the Home Affairs Committee struggled to find anybody, other than the Minister, to say was a really serious problem; even Migrationwatch UK was not that bothered. Given that we do not want to lose £2.5 billion from the economy, will he rethink these proposals?

It would be absurd to say that there are no problems with the student visa system. It represents two thirds of the amount of immigration into the system, and it has become the biggest single loophole in our immigration system. On the slightly arcane theology of impact assessments, my hon. Friend will know that some strange assumptions have to be made by Government economists. For instance, this has to be costed on the assumption that if migrant students are no longer able to work here as before, not a single one of the jobs that they vacate will be taken up by a UK citizen, particularly one who may be currently unemployed. If there is replacement, which is intuitively very obvious, then the cost to the economy will be significantly lower. That is why we have asked the Migration Advisory Committee to investigate this assumption, and we expect it to report in November.

Despite what the Minister has said about impact assessments, it is surprising and deeply worrying that the Government are pursuing a policy which, on their own view, will cost the country £2.4 billion and which, on their own view, will have only half the impact on net migration that they originally said. This policy was part of a package of changes that the Government said would reduce net migration to the tens of thousands by 2015. In support of the policy, the Prime Minister said in April to Tory party members:

“No ifs. No buts. That’s a promise we made to the British people. And it is a promise we are keeping.”

Well, not according to his Government’s own impact assessment, and not according to the Migration Observatory—

Order. The hon. Lady must now bring herself to a one-sentence question. That is the end of it.

Thank you, Mr Speaker; I was just about to. Will the Minister be upfront and admit today that this is a promise that he and the Prime Minister will not be keeping?