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Volume 721: debated on Thursday 21 October 2010


Moved By

To call attention to the economic and cultural impacts of immigration in the United Kingdom; and to move for papers.

My Lords, before opening this debate I would like to declare that I am chief executive of London First, a not-for-profit business membership organisation.

It is a great pleasure to introduce this debate today; I thank my noble friend Lady D’Souza for allocating me the time. I look forward to the contributions of noble Lords from all sides of the House; there is much expertise and experience to draw on. In particular I would like to pay tribute to the excellent report prepared by the Economic Affairs Committee back in 2008 which sought to deal with many facets of this complicated subject. The committee concluded that any immigration policy should have at its core the principle that existing UK residents should be better off as a result.

There have been significant recent developments in government policy on immigration. A decision has been made to introduce a permanent cap in April of next year, and in order to avoid an influx ahead of this date a temporary cap was implemented in July. The aim of this cap is to accelerate the reduction of immigration into the UK, a trend that had begun under the points-based system introduced by the previous Government.

Her Majesty's new coalition Government are right to be concerned about migration. Politicians reflect the views of the voters, and immigration was undoubtedly an election-time door-step issue. As recession has hit, people are understandably concerned that immigrants may be taking their jobs or creating an unwelcome burden on public services. In some respects, both concerns are valid: foreign waiters are prepared to live and work in more challenging conditions than their British counterparts, while the cost of education provision to immigrants and their dependants was recently estimated at £13 billion.

The other side of the argument is equally politically and economically obvious: the Government are reliant on economic growth as a pathway out of recession. As the public sector shrinks, so the private sector is expected to take up the slack. That private sector growth is partly reliant on the attraction of world-class talent to work in the UK.

One of the UK's strengths is the global reach of its service sector economy. It is the second highest exporter of professional services worldwide. London, which is particularly successful in this sector, contributes more in tax than it receives in public spending by some £15 billion or more a year. One seventh of London's businesses are foreign-owned. Many of the world's largest companies have invested in substantial bases here. These are global organisations; they compete with the best worldwide. They must be able to recruit the best people and move people and teams from A to B as and when required. If they are not allowed to, then the A or B in which they eventually base themselves will not be Aberdeen or Birmingham but Amsterdam or even Beijing. I am more concerned about highly talented international business people and academics leaving the UK than I am about limiting their entry.

I was struck by a lecture given by Sir Howard Davies, where he argued that an economy such as London's—a varied and global centre of excellence—ebbed and flowed according to the combination and concentration of talent. Rather than a fixed number of ever present companies in certain sectors, London's economy is a fluid agglomeration of the world's brightest and best. The UK must build upon its considerable

“combination and concentration of talent”,

not cap it.

Beyond the political and economic arguments there is a question of what kind of Britain we want—of what we value about the country in which we live. I know what my answer is. I value the academics who make our universities among the best in the world; the students whom we educate and send back to their countries with vital ties and connections to our country; the 13 scientists working at the Medical Research Council’s laboratory of molecular biology who have received Nobel prizes, only five of whom are British. I value the Russian ballet dancers, the European fine artists, the American sports stars, the Caribbean reggae artists and even the Australian soap stars, all of whom add vibrancy to our society.

Let me offer some names and achievements: Rudolf Nureyev at Covent Garden; Anish Kapoor at the Royal Academy of Arts; our Olympic aquatic centre designed by Iraqi-born architect Zaha Hadid; the structure of DNA, discovered at Cambridge University by James D Watson, who came here from Chicago. I understand, however, that Karl Marx had his application turned down.

What should inform an effective policy response to the Government’s twin ambitions of managing migration and growing the economy? Let me explore the different types of migration in more detail. First, illegal immigration is undoubtedly an issue, on which I would urge the Government to focus with urgency. Secondly, there are the asylum seekers, of whom those with legitimate cases should be given appropriate protection. Indeed, we should pay tribute to waves of migrants, such as Huguenots in the 17th century or the east African Asians in my lifetime, who have enhanced our culture and our economy. Thirdly, there is a difference between EU and non-EU immigration. The Government have no direct power to limit EU migration. Finally, there are the categories identified by the UK Border Agency. Tiers 1 and 2 migrants are defined as highly skilled and skilled respectively, tier 3 migrants are low skilled and tier 4 are students.

Taking tier 4 first, I understand that students from within and outside the EU accounted for roughly 230,000 migrants in 2009—40 per cent of the total. We should value students for their subsidy, in effect, of our world-class learning institutions and for their contribution towards forging links between the UK and fast-growing developing world economies. Cambridge University trains the world’s leading mathematicians and South Tyneside College trains the world’s leading marine navigators. However, poor monitoring of this category has allowed for bogus colleges and bogus students, so I encourage the Government to take firm steps to address this issue.

On tier 3 migrants, while entry for low-skilled workers from outside the EU has been closed since the points-based system was introduced, low-skilled migrants from inside the EU enter this country freely. These people are the greatest threat to British workers and the most likely net users of public services. The solution certainly lies in making work pay, so I welcome the Government’s focus on the relationship between welfare benefits and employment. However, once in the job market, if British workers are to compete with their continental European counterparts, they must be at least comparably skilled to do so. There is no quick fix on this front. Apprenticeships, job-related training and a concerted focus on employability in our education system are the only solutions. This takes time and effort on the part of both the Government and employers.

Finally, let me focus on tiers 1 and 2—highly skilled and skilled—non-EU migrants. This is the group that we drive away at our peril, and the group most likely to make UK residents better off with their presence, as the Economic Affairs Committee recommended. There were 55,000 such migrants last year, making up less than 10 per cent of the 567,000 total. This was a decline from 66,000 in 2008, following the introduction of the points-based system. These individuals are almost exclusively net contributors to UK plc, contributing directly to the Exchequer through tax and national insurance, and indirectly, through their employers or the businesses that they set up, the extra UK jobs created as a result and their spending power. Their interaction with public services and the benefits system is low.

The most striking statistic about those in tiers 1 and 2 is that they are net emigrants from the UK. When those 66,000 non-EU migrants entered the UK to work in 2008, 74,000 left. In other words, what we have in this country is a brain-drain of top talent. The UK is already exporting the talent on which the Government are reliant for private sector growth. In a global market, UK residents are increasingly looking overseas for top employment opportunities, which is an issue that, I am afraid, we cannot address directly, short of shackling people to their desks or confiscating their passports.

Let me comment further on the categorisation within tier 2. Tier 2 sanctions entry of skilled workers who fill skills gaps. First, I suggest that experience and business culture should count alongside a narrow definition of skills. Let me give some examples. A global engineering company may need Japanese speakers with knowledge and experience of infrastructure projects in Asia—knowledge and experience that a British engineer just will not have. A Moroccan bank may want to get a toe-hold in Britain and to bring in a Moroccan chief executive to set it up. Someone who has worked on the multinational acquisition of an energy company by a water company may be helpful to a comparable deal being facilitated in the UK.

Secondly, we should seize skills opportunities as well as simply meeting gaps. Think about the concentration of expertise in a place such as Silicon Valley. It is the most successful centre for IT entrepreneurship in the world and has achieved that by attracting talent worldwide. Sequoia, the venture capital company that backed Google, Cisco and Oracle, has said that it likes backing first-generation immigrants because of their hunger and drive. Motivated, talented people brought together with capital in a culture of enterprise provide a potent recipe for success. In my view, this is how we need to think about London and the UK—a centre for ideas, talent and experience drawn from around the world which, given the fuel of additional motivated talent, can create further economic added value and promote growth.

To sum up, as is perhaps apparent from what I have said so far, I am not persuaded that the Government will achieve either their political or their economic objectives by implementing a tier 1 and tier 2 cap on non-EU migrants. However, I understand the bind that the Government are in. What we are trying to achieve is to grow the economy while tackling voters’ migration worries. Therefore, my plea to the Home Secretary and officials in the Home Office is that they work with business and, jointly, think a little out of the box. To misuse a phrase, they should find a third way.

Let me throw some ideas into the mix. Perhaps it is worth lifting the bar a little for tier 2 entry and say to companies, “Yes, you can employ non-EU immigrants, but only if you really need them and if they really are the best”. Perhaps employers could be asked to demonstrate the net positive impact on UK residents as a result of recruiting employees from non-EU countries. Perhaps employers could pay a deposit on each worker that they bring in, refundable only when that amount has been repaid in income tax and national insurance. Perhaps employers could sponsor an apprentice for every migrant that they recruit.

If the Government say to business, “We want the best businesses here in the UK and we are prepared to work with you to make that happen”, I am inclined to believe that, complex though the issue is, with our multi-talented public and private sectors, a solution can be found. I eagerly await all that follows. I beg to move.

My Lords, I thank the noble Baroness for securing this debate and I am delighted to see my noble friend on the Front Bench. I begin by declaring an interest as chairman of the Institute of Cancer Research, a college of the University of London. The institute employs 850 scientists drawn from no fewer than 55 countries. Following the Government’s research assessment exercise in 2008, we were ranked as the United Kingdom’s leading academic research institution—above Oxford, above Cambridge, above Imperial College and above every other university in this country. During the past five years, we have discovered and developed more anti-cancer drugs than any other organisation in the world and have secured more journal citations than any other institution. I am proud to proclaim that the Institute of Cancer Research is the world’s leading cancer research organisation. It is a global centre of excellence in the heart of London. Yet it cannot be sure of retaining its international pre-eminence unless the Government adapt their interim cap on immigration. Not only does the cap jeopardise our global status as a world centre of excellence, it also endangers the country’s status as a world centre of scientific innovation and excellence.

World-class institutions such as ours must be free to bring in the right people at the right time, the brightest and the best. Our principal complaint is over tier 2 visas affecting the recruitment of clinical research fellows and post-docs. Let me cite an institute example to underline my case. Peter Fong, a clinical research fellow from New Zealand, was the lead author in the New England Journal of Medicine in 2009. He reported on the phase 1 trial of the PARP inhibitor Olaparib. This drug has shown spectacular results in targeting tumours and, according to the former president of the American National Academy of Sciences, Fong’s work will,

“change the face of cancer research”.

Today we could not recruit Peter Fong. Instead, no doubt, he would be working in the United States.

Research of our quality cannot be mothballed and restarted at a later date. We shall be left behind, to the detriment of cancer patients and the growth of the British economy by way of the pharmaceutical industry. The pharmaceutical and medicinal industry ranks first in the trade league table of our 16 major industrial sectors, providing us in this country with a trade surplus of well over £3 billion a year. GSK and AstraZeneca are two of the top six pharmaceutical firms in the world, exporting to China, India and the USA. They could not achieve their successes without the talents of the international scientists discovering drugs at the Institute of Cancer Research and elsewhere in our nation.

Clearly the Business Secretary grasps the meaning of this argument otherwise he would not have stated that the cap is damaging British industry. If he cannot persuade his colleagues in the Home Office to see sense, then the Prime Minister must intervene without delay. It is all very well for the Chancellor to talk the talk about economic growth but, when his own Government are staunching economic growth, surely the system should be changed, and changed soon. After all, Britain can boast at least seven immigrants as Nobel laureates. How many of them would have plied their trade in our country under the existing system? I share the view of Sir Paul Nurse, a cancer scientist and a Nobel Prize winner: what sort of policy allows footballers into our country but not scientists who can stimulate economic growth?

Let me end with some good news and another warning. A fortnight ago the institute announced that our drug Abiraterone will be on the market next year. It will revolutionise the treatment of advanced prostate cancer across the world, bringing in huge revenues to this country. Unless the cap is adjusted—and one cap should not fit all—I wonder how many more of these revolutionary and wealth-creating drugs will be invented by the Institute of Cancer Research and our brilliant scientists drawn from 55 countries. If my noble friend cannot enlighten us—I do not envy his position today—the Prime Minister should be approached for an answer. All the best Prime Ministers come to realise that the shortest mistakes are better than the longer ones.

My Lords, I congratulate the noble Baroness, Lady Valentine, on initiating this debate and on her compelling and eloquent presentation of it.

Immigration is one of the most contentious issues of our time, not only in this country but in Europe, the United States and elsewhere. In the Netherlands, two murders linked to immigration and cultural divisions have served to polarise the country. The German Chancellor, Angela Merkel, only a couple of days ago on television, declared multiculturalism dead in her country. A well known and best selling book recently published in Germany argues that “Deutschland muss Deutschland bleiben”—Germany must remain Germany.

Against this backdrop, Britain stands out as a multicultural success story, with London in the lead. Whatever problems there may be around ethnicity in London, there is nothing like the levels of physical separation and deprivation that mark the huge housing estates around the edges of Paris, or the ghetto neighbourhoods of Antwerp and Rotterdam. London’s pre-eminence as a global city, mentioned by the noble Baroness, is directly related to its dazzling cultural diversity. Even in this country, multiculturalism seems to have become unpopular in some political circles but I stress that it is the only political philosophy which is compatible with a globalising world and an open economy such as ours.

The notion of multiculturalism, however, has been tarnished by those who, more or less, completely misunderstand it. I would include—if I am allowed to say this in the context of the British Parliament—the German Chancellor in this category. Multiculturalism does not mean accepting value relativism. It means, on the contrary, promoting active dialogue between those who hold different values to produce common perspectives on the world. Multiculturalism does not mean letting different communities develop as they will. It means, on the contrary, seeking to establish contacts between communities; making sure that ghetto neighbourhoods do not develop; introducing active policies such that one prevents those sorts of developments which one sees in so many other countries around the world. In this respect so far, as I mentioned, not only in London but in other cities we have been remarkably successful.

Multiculturalism does not mean sacrificing national identity. It is entirely compatible with, and indeed a core part of, the establishing of a national history—Britain is already an extremely diverse country from several centuries back—and it is compatible with an overall framework of democracy and an overall framework of ethics associated with democratic politics. Do the Government actively support multiculturalism such as I have defined it?

I welcome the cultural diversity arising from immigration as a positive value. However, it is also true, as the noble Baroness clearly said, that immigration has created significant economic benefits. Large segments of the economy over the past 20 years would have been almost inoperable without it. The NHS is a prime example, as is the university sector. One quarter of all immigrants are students, paying for the courses they take and bringing about £2 billion into the country. There are many hidden benefits from students who enter universities here because they go back to their own countries and propagate the virtues of British education and of British society more generally.

The coalition paints a picture of Labour progressively losing control of immigration, but I would say that the opposite is the case. Labour floundered at the beginning of its period of tenure, but developed a progressively more sophisticated system as time moved on. The points system instituted towards the end of the Labour Government mirrors those of Canada and Australia, which are the most successful multicultural countries in the world.

Like the two previous speakers, I have serious reservations about the Government’s policies in this area. First, the idea of a cap on non-EU migration has already been criticised. That criticism seemed mild, because I think that it is the worst example of electoral populism and is actively dysfunctional. As has been mentioned, none other than the Business Secretary Vince Cable has said that it will be “very damaging” to the economy. Many companies are already deciding not to invest in projects because of worries about the availability of specially skilled labour power. The Government must surely think again on this issue, whether in the way in which the noble Baroness suggested or otherwise. It will not do as a policy which could be reconciled with the demands of a recovery from recession and job creation.

Secondly, as has been mentioned by the noble Lord, Lord Ryder—I shall put it more generically—the Browne report, if implemented as it stands and placed in the context of the cap, could be seriously destructive. Simply, it is likely to cause top scholars not to want to come to this country or not to stay in the country. It will deter the overseas students that we need from coming to the country. The combination of these two policies looks to be lethal. I am a great admirer of the Minister, who is an esteemed colleague of mine at the LSE, but I do not see how he can accept the policy of a cap on migration as it currently stands and as it seems to be planned for the future.

My Lords, I, too, thank the noble Baroness, Lady Valentine. She has expressed far more powerfully than I could the connections between immigration, skills, training and so on. However, I was glad to see the Home Office’s consultation paper acknowledge that connection. Like other noble Lords who have spoken already, I would like to see that thought followed through more effectively, because this is not just a narrow regulatory function of the Home Office and the UK Border Agency.

Although the consultation has closed, I am sure that the Government are still listening. It was about how limits should work in practice. I am glad to say that, from what I have seen, the public have interpreted that very widely, making representations not just about how the cap should fit but about how big it should be. They make the point that underlying policy is to strengthen the UK’s economic base by boosting trade and employment.

I follow the noble Baroness in finding it perverse that the debate is driven partly by how many people leave the UK. We talk about net immigration figures, with a base which seems to be artificially low because it was taken at the worst point of the recession. Taking net figures rather obscures the numbers coming in and going out.

I knew that comment would be made today on the many types as well as levels of skills and sectors, as well as on the training needs of the country. The issue is not directly referred to in the Home Office consultation, but I should say that, coming as I do from west London, where plumbers and builders have been difficult to find over the years, I know that west London now realises what a good thing it is that Poland joined the EU, and there has come about an enthusiasm for Polish workmanship.

Other noble Lords will no doubt speak of the tax take. That tax is available to the Treasury. The better the availability of tax, the better is the economy. The IFS has published research that shows that migrant workers from eastern Europe are net contributors to UK public finances, while native Britons are sadly a net drain. That must make us think about the likelihood of workers from outside the EU contributing even more.

The academic and scientific communities have quite properly achieved some coverage of their concerns about the restrictions. There are parallels in the creative industries. The UK’s cultural sector is of huge importance to our economy. Tourism and sales of recorded product are direct benefits. Indirect benefits are our reputation and the factors which encourage major companies to locate here. They make the UK a place, among its global competitors, in which people want to be and to work.

I have nothing against elite sports people, but I am unclear as to why sport, coupled with religion, is singled out for the special treatment to which reference has already been made. There are others who are sought after in different sectors for a range of activities but who are not as high up the scale as the elite. We could not function if we had only elite people working here. Thinking just of the performing arts, I stress that it is necessary to facilitate immigration. In some cases, it should be done on a medium-term or longer-term basis; for instance, for dancers who are members of a company. Sometimes, shorter visas are needed; for instance, if one of our companies is involved in a co-production with a foreign company. Through the Industry and Parliament Trust, I have been lucky enough to see close up how some of our companies in this sector operate. What one sees on the stage is only a part of it. The focus on education and outreach work is impressive. Skills are required to dress, design and light a production. When I went to the Royal Opera House, I met a young woman working in the armoury who had undertaken an apprenticeship. These skills are transferable—although I accept that armourers may need a little adjustment.

It is a big subject, and six minutes is too short for it. I end by asking the Government to keep at the forefront of their mind the UK’s role as a global player in so many sectors. Our immigration rules should be a facilitator, not a constraint.

My Lords, I, too, thank the noble Baroness, Lady Valentine, for securing this debate. I welcome her constructive, balanced and creative approach to this very difficult and complex area.

The economic consequences of immigration and its effect on cultural identity and social cohesion have always invoked strong feelings. Regulations concerning immigration are frequently adjusted in response to changes in the economic situation or to accommodate shifts in public attitudes towards immigration.

The Government's pledge to lower the number of people coming to the UK from outside Europe and to introduce an annual cap on non-EU immigration is a response to such concerns. But this response is flawed, because the imposition of a cap to limit immigration from non-EU countries is not in the economic interests of the UK. It will send, and has already sent, a negative message to the very countries that we want to engage with. We have been warned of that by businesses, banks and lawyers, and we have seen articles in the Times of India and in Australia about this approach. The Law Society warned that the UK could lose large volumes of legal transactional work to other jurisdictions if we are not allowed access to the best talent in strong and emerging economies such as India and China, as well as in the USA and Australia.

Indeed, as has already been stated, Vince Cable said that if we are going to attract more investment from foreign companies, whether from India, Japan, America, Korea or wherever, we need access to high-level manpower. That has to be respected. As the noble Baroness, Lady Valentine, said—and as Vince Cable recognised—the dilemma facing the Government is in trying to reconcile two different objectives, one of which is to assure the British public that immigration is under control while the other is to have an open economy where we can bring talents from round the world.

The current approach seems to be playing to populist sentiments at the expense of the economic importance of what needs to happen. We have for some time operated a managed immigration approach and the current demand-driven scheme already affords adequate controls and meets employers’ real-time needs for specific skills. Attracting those falling within the entrepreneurial and investor categories cannot be separated from overall reductions in immigration levels. There is some empirical research showing that the two are interlinked. There is a link between trade and investment levels and immigration levels, which shows that stronger and more extensive migrant networks make it easier for would-be entrepreneurs and investors to invest.

In today’s global economy, which is becoming increasingly fluid, companies want labour to move with greater ease between jurisdictions. A cap could inadvertently prevent global businesses from moving employees with specialist skills. This concern has already been voiced by some large companies. On any grounds, a cap on the non-EU immigrants is not a sensible policy. It contradicts the Government’s commercially driven foreign policy and will not address the issues for which immigration ultimately acts as a proxy—for example, to deal with poor housing and the strain on public services.

Our managed immigration approach allows immigrants under those schemes to bring skills into the UK which are in short supply. Figures show that the numbers coming in have declined in any event, other than those coming in for the purpose of study. Yet increasing the number of international students should be welcomed because international students, as it has now been widely recognised, bring substantial income to our institutions and to the wider UK economy. UK universities receive approximately £30 million in fees, with a similar amount being spent on living expenses. In addition, there is income for our public and private sector colleges. Following the recent review by the noble Lord, Lord Browne, and the likely changes to higher education funding, this income will be even more vital in the future. It is unfortunate that, amid controversy over net immigration, an impression is being given that international students are in some way part of the economic and social problems. It is forgotten that international students have to pay—and prove that they can pay—the full cost of the education. They have no recourse to public funds and very limited entitlement to work.

With the changes introduced in March and August this year, the system is considerably tightened with restrictions on which institutions can offer which courses and who can come for what amount of time, with or without dependents. I would like to hear whether the noble Lord can assure the House that international students who come for a temporary period to learn, and who bring benefits in terms of trade, diplomacy and international relations, will remain outside any target for a reduction in net immigration. Will the Minister also tell the House whether the Government will reconsider their policy of capping, in the light of representations that they have had from businesses, bankers and lawyers and the responses that they have had to their consultation?

My Lords, first, I join others in thanking the noble Baroness, Lady Valentine, for initiating this debate. I want to declare a number of interests. First, I am a governor of the Wellcome Trust, which funds to the tune of about £600 million a year fantastic and extraordinary research, primarily in this country but also around the world to improve human health with real, therapeutic outcomes. Secondly, in that capacity, I am also a governor of the Sanger Institute, which mapped a third of the human genome and whose current difficulties with immigration rules were recently outlined very graphically in the Times; I shall say more about that anon. Thirdly, I am a vice-chair of the council of Imperial College, which is also affected by these current arrangements.

I start by saying, first, that I very much welcome the ring-fencing of the science budget in yesterday’s comprehensive spending review, but there is no point doing that and keeping the current arrangements on the senior cap. I will come on to describe what is happening there. Others, notably the noble Lord, Lord Ryder, have described that the UK is a world leader in science. I can say that because I am an arts graduate who barely knows what a molecule is but, in my time in these wonderful organisations that I am now associated with, I have been fantastically impressed by their skill and the scale of, and dedication to, what is undertaken.

Secondly, our universities need to be globally competitive. Universities elsewhere in the world are coming forward in leaps and bounds. There is a whole lot of further discussion on that to do with the report of the noble Lord, Lord Browne, but those universities and institutions need to be able to attract the brightest and the best students and academics, from wherever they come. That phrase, about the brightest and the best, was indeed used in the Government’s consultation paper. We need them for research—research which is making incredible discoveries every day—and to train the best in the next generation of students. Yet what we have at the moment is artificial protectionism that is, in some respects, actually preventing a brain drain in.

We are told that the knowledge economy is key. Wherever they come from, if we bar academics of the highest talent from coming here, they will be snapped up elsewhere in the world. Our key institutes are already suffering from the restrictions on skilled people; we have already heard about the area of the noble Lord, Lord Ryder. For example, the Sanger Institute, which is doing breathtaking work moving what we have learnt from the genome into therapeutic benefits for patients, has 17 people from outside the EU working there, only three of whom would now get in.

On Monday and Tuesday I, with other Wellcome governors, spent two fascinating days in Cambridge visiting a lot of institutes which are partly funded by the Wellcome Trust. I heard tales of some of the current research. I do not pretend to your Lordships that I understood it all, but I understood enough to recognise that there was some exceptional work going on. If I say that I heard from a PhD student who came from Belarus, a fellow who came from China and from others from around the globe, your Lordships will understand that I found this very exciting. In my past career, within my service, I worked only with British citizens and their children and grandchildren, but science attracts a range of different people from around the world. If we have a cap that makes it almost impossible for them to get here, we are doing not only them but our science and our economy grave damage.

Noble Lords might imagine that, in my bath at night, I am reading the new national security strategy. Your Lordships might wonder how I am going to connect that with today’s debate, but I shall read a bit of it out because it is absolutely pertinent to what we are discussing:

“We are a global leader in science and technology, medicine, creative industries, media and sport, and home to some of the top universities in the world. We continue to attract large flows of inward investment … Economic growth in the coming decades is likely to be driven by the world knowledge economy”—

and there is reference to our world-class universities. Investment does not mean only money coming in; it is people—students and academics.

I hope that the Minister will be able to reassure us that the sentiment expressed elsewhere in this document—that our prosperity and security require us to retain open markets and resources, and be a strong advocate of free trade—applies also to the most skilled people who want at the moment to come here, who have been coming here for generations and who we need to continue to come here.

At the very least, if nothing else, in refining this blunt instrument, I hope that the Government may consider why, in the guidelines for why a person should come in, their previous earnings earn them double what their qualifications do. This is extremely foolish and dangerous.

My Lords, I, too, congratulate the noble Baroness, Lady Valentine, on this debate. I agree with all the points that have been raised about the tier 1 and tier 2 people and how important it is. I know so many young bright Australians who come over and not only learn a lot but make a great contribution to science here.

In the title of the debate, “Economic and cultural impacts of immigration in the United Kingdom”, the word “in” makes it easy to spread the debate a bit. Is it on, into or within it? It could be anything. So, I intend to talk about a basic group that is already in the UK: the invisibles. I am not for a moment suggesting a general amnesty; I am not going into that. However, we had a question only yesterday about tax avoidance and tax evasion. We have thousands of people, long-term residents in the UK, who are totally invisible. They could be people living next door to you. If we could bring those people forward—I am talking specifically about long-term residence, which is a qualification for the right to settle in the UK, or at least to be here with indefinite leave to remain—this would be a great source of income tax and national insurance. These people are certainly not paying those things now because they have no idea how they would even get on to the ladder and into a position where they were entitled to be here legally.

During the time that I have handled one particular case—the only case that I have ever dealt with; it has taken three years, but the person has now obtained indefinite leave to remain—I have come into contact with quite a lot of the Latin American community. They have brought to my attention an issue that is important for the Government to look at. They say that if you arrived 10 years ago, the goalpost for long-term residence was 10 years. They quoted one person who, after nine and a half years, found that the goalpost was moved to 12 years. After eleven and a half years here, he found that it had moved to 14 years, which is where it is now. It is a bit of an injustice, rather like an employment contract where your employment arrangement is based on the laws and rules at the time of your engagement, that people should be moving the goalposts like that, as well as wrong and a bit anti-British. The Government should look at that. This is just a small thing.

I asked a Question in this House in June 2007 about how one helped someone, and the reply of the noble Lord, Lord Bassam, was interesting. He said that the person I referred to,

“should apply to the Home Office Border and Immigration Agency … for indefinite leave to remain; that is, to settle in the United Kingdom entirely legally. The Immigration Rules allow for that”.—[Official Report, 25/6/07; col. 410.]

Sure enough, they do allow for that, but there are difficulties. This person was referred regularly to pro bono advisers who, after she met them, then told her that it would cost about £10,000 to deal with her papers. That is how I got stuck with her case in the end, and I found that it took three years.

Another thing that the Home Office needs to look at is the wording of some of the documents regarding evidence of residence. The department says that it requires 10 documents for each year of your time here, and it sends you an unbelievable list of the sort of things that it would like you to send in: your credit card, your bank statement, your insurance policies, payslips, P60s and so on. This is for people who are invisible here; they have none of these things, so how on earth could they possibly produce enough of them? Then the Home Office says, “The evidence cannot be from a friend”, although it could be from a doctor or a vicar or something. Eventually we sent in 26 documents, and the Home Office wrote back and said, “Not enough”. We started looking for more. Then I wrote to the Minister saying, “Most people are advised not to hang on to all these documents for years and years, and this woman has been here for 27 years”. Incidentally, the department wanted documents only for the previous 14 years, although she had plenty of documents for the period before then. The situation was extremely difficult. I wrote to say, “How is one expected to produce 140 documents?”. The Home Office replied saying no, that was not what its letter meant—it meant 10 documents in all, covering the whole 14 years. I wrote back to say that I thought it would be a good thing if the department sorted its English out a bit so that what it said it wanted was what it actually wanted.

After all this time, this person has managed to get her leave to remain, and I am so pleased that she has got it at last, but the application form is 20 pages long and unbelievably difficult to complete. So many people in this country could make a contribution, and would welcome the opportunity to become legal taxpayers and become part of this society, if only these things could be made clearer. I understand that representatives from other countries—I am talking about Latin Americans in particular, but this probably applies to all—say that if only they could have meetings with the Minister, they could sort out the things that can be done and the things that they find impossible to do. Any additional income from people who are already here, not occupying any additional accommodation because they are already in accommodation, and in so many facets of the system—although they are not already with a medical doctor because they cannot be; they have to pay their own bills—would be welcome. It would cost this country nothing, and we might get the benefit from it.

My Lords, I join those who have thanked the noble Baroness, Lady Valentine, for having introduced the debate today and for the thoughtful way in which she set off our deliberations. The richness of humanity— of creation, some would say—is obviously its diversity. Any civilised objective for our society would get to the point where we were celebrating diversity rather than seeing it as a threat to be managed. Probably most of us, if we were to look at our own genes, owe something to immigration at some stage in our family life, however far back, and each wave of immigration can be seen in a historic perspective to have added to the quality of our society. It is hard to see any contradiction of that observation.

The quality of our academic and research institutions, as we have heard powerfully expressed in this debate, owes a great deal to migration and to the processes of learning, because learning has nothing to do with national barriers. The very presence of an international community of scholars adds to the quality of the scholarship itself. I make only one qualifying remark in all this: as a responsible society that, in the present economic situation, has ring-fenced our overseas aid and development budget because we feel so strongly about these issues, we should think hard about any inadvertent drain on scarce and invaluable resources of the developing countries themselves that may be generated by our own needs.

We must, however, be realistic. We are told that the market is the way forward. I am one of those who believe that the market has an important part to play but it is far from the whole story. There is a fundamental flaw here: if we talk about the free movement of goods, investment and finance but put a bar on the free movement of people, where is the market? People will follow the money, investments and so on. If we accept that reality, it has important lessons for us in our contribution to international institutions that are concerned with the economic and social management of world affairs. We must accept that we are not operating a global market in any meaningful sense.

The pressures of migration in our society have so often fallen most severely on those communities least prepared to handle them, where the schools, housing, hospitals, general social provision and jobs are not so good. If we want to make a success of our own immigration policy, we cannot separate it from our own economic and social priorities in areas of disadvantage and deprivation. There will be some acute challenges in the context of current economic policy.

Integrated society cannot be forced on people. It has to grow. I do not know whether other noble Lords share my anxiety about the process of the oath of citizenship, with all the qualifications, learning and exams necessary. I wonder how many of our own citizens would be able to acquit themselves satisfactorily in those exams. If we are to be a success in this, some kind of transparent consistency in what we say is terribly important.

We must again face up to our inconsistencies with this business of the imperfect market. Our society applauds the father who, faced with unemployment or community decline, goes off to some other part of the country to get a job. We are told that we live in an international market, yet we deplore the responsible father from the other side of the world who goes off to seek a job and ends up here. We talk about him in almost disparaging terms, as an “economic migrant”, as though there is something wrong with that. That is an absolutely clear contradiction in our approach to what we believe is responsible citizenship and parenthood.

All this means that we must show great sensitivity and respect in our handling of the immigrant community. That is why the kinds of things that we discussed at Question time yesterday are so alarming. It is not good enough that we do not have the kind of leadership which means that everyone operating in our border agencies, and related activities, inherently understands that they are dealing with people under acute pressure. The inadequacies, failures and contractions in our own society lead to the predicaments in which people find themselves. We must therefore treat them with respect, sensitivity, care and concern. It is worrying when that does not happen.

What I am saying is closely related to security. We know that militants and extremists are recruiting from areas of alienation and disaffection. If we do not get our handling of migration right, and do not have the right culture at every point, we are playing into the hands of the militant and extremist recruiters, who will play on the alienation and disillusionment that so often occur.

All of this requires two things. We will not be able to solve it all on our own and must therefore have an intelligent and committed role in European and global institutions to get it right. Most importantly, however, we must have consistency in our political leadership. It is no good playing to the gallery and to prejudice in the search for votes one day—I am not making a partisan point here, but one that goes right across politics—and the next day blaming the chap in the migration service who mishandles the case. Where, then, are the leadership and context for the culture that matters?

My Lords, I, too, thank the noble Baroness, Lady Valentine, for initiating this debate. The recent general election is the first in my political lifetime in which the party leaders have spent much time publically discussing immigration. I am afraid that that debate generated a lot more heat than light. Today’s debate gives us a much better chance of a measured discussion of an extremely complicated question.

Harking back to the general election, I am tempted to take up the involvement of the noble Baroness, Lady Gardner of Parkes, in the amnesty issue. However, I would like to speak briefly about three aspects: first, highly skilled immigration; secondly, students; and, thirdly, less highly skilled immigrants.

The issue of highly skilled immigrants has dominated this debate. We clearly need a much more sophisticated approach than that currently being adopted by the Government. A small number of people here have a disproportionately significant impact on our economic life. We have been given a number of examples of how the cap doesn’t fit. I will give two more, from the oil and gas sector. Tata currently employs 38 non-EU nationals in Aberdeen, which is less than 5 per cent of its UK staff but they are hugely important people. It has been allocated two certificates of sponsorship for the period ending next April. This is undermining its ability to continue basing its geoscience research centre in Aberdeen because the centre is dependent on being able to recruit the most highly skilled and specialist people in this field, wherever they come from around the world. Shell finds itself facing exactly the same problems. Its inability to bring in non-EU citizens for specialist positions is leading it to consider whether it should move some of its specialist functions, possibly to the Netherlands where it already has its headquarters.

These problems are not just in one or two sectors. We need to recruit people for some key country and language specialisms from outside the UK if we are to improve our competitiveness. China, Japan and India are just three such countries. The importance of this, and the significance of the problem, was borne out by the recent Think London FDI barometer, conducted in May and June this year. Of those companies from the Asia-Pacific region, 89 per cent said that the immigration cap was likely adversely to affect their business over the months ahead. The cap does not fit, and it must change.

The noble Lord, Lord Ryder, and the noble Baroness, Lady Manningham-Buller, have spoken eloquently about the need for the best academics to come in to the country. I echo the comments of the noble Baroness, Lady Prashar, on the importance of students from around the world. We have a comparative advantage over much of the rest of the world. We often talk about shifting the balance away from financial services. Promoting our academic sector is one way in which we can do this. An example of how far our attractiveness reaches was impressed upon me by a British Council description of a recent poll in Chile in which students were asked where they would like to go if they could study abroad. While 28 per cent said that they would like to go to the US, 27.5 per cent said that they would like to come here. Chile is on the other side of the planet, a country where English is not the language. Yet we are hugely important to it, and need to build on that strength rather than undermine it.

Less-skilled immigrants from the EU and elsewhere —by far the largest group—are, in a sense, a bigger issue. Unemployment in London is currently 9.1 per cent, the second highest in the English regions. However, within London there are huge numbers of immigrants from the entire world doing jobs that could relatively easily be done by Londoners. This principle applies to a greater or lesser extent elsewhere, but in London it is particularly stark. It was brought home to me a couple of weeks ago. Within a couple of hours, I first bought a sandwich at a branch of Pret a Manger in which every member of staff was non-UK born, and then had a meeting with the policy director of Gingerbread, the charity that works with one-parent families. He talked about the vital need for part-time work for single mothers. I am not suggesting that every single mother goes to work at Pret a Manger between 10 am and 2 pm, but the retail sector has huge potential for that group that is not being exploited. The Government and employers should be looking at how we can fill some vacancies through better training of people who are currently looking for work.

Another sector to which relatively large numbers of people come, particularly from the Far East, is the care sector, where the easy option is to import care assistants from the Philippines. I wish the large healthcare providers, in both the public and the private sectors, but possibly particularly in the private sector, would spend more time ensuring that they recruit more local people, who need only an NVQ-level qualification to be able to do the job.

Immigration can and does bring great benefits to the UK. It has to be managed but, with a more nuanced and rigorous approach by government, there is no reason why that cannot be successfully done.

My Lords, I, too, congratulate the noble Baroness, Lady Valentine, on securing this debate. Her experience as chief executive of London First—a most successful organisation in promoting investment, both inward and domestic—and its resulting job creation give particular authority to what she said.

I declare an interest as a deputy chairman of the United Kingdom Statistics Authority. Indeed, “lies, damned lies and statistics” are at the very root of what we are discussing. Immigration is perceived to be an opportunity or a problem, depending on the position in which any country finds itself in the economic cycle. The perception is also influenced by demographics when considering size and infrastructure. For example, projections indicate that by 2050 we could have the biggest population in Europe. Currently we are second only to Malta as the most densely populated country.

While I am sure the Government are well intentioned in introducing a cap, it seems that they propose to use a proverbial sledgehammer to crack a nut. I have a most serious concern as to whether the correct nut is being attacked. Our country is in great and continuous need of attracting and keeping, in the Government’s own words, the “brightest and the best”. We need them for academia, ICT—we have heard eloquent arguments for this today—banking, business, high-value-added manufacturing, the arts and, yes, even for football, though I feel that the proposed exemption is really a pander too far.

The Office for National Statistics’s Migration Statistics Quarterly Report from August 2010 shows in provisional figures that net immigration in 2009 was 196,000 people into this country. This represents an increase of some 20 per cent from the previous year. This net figure resulted, however, from 567,000 persons in and 371,000 persons out. Most importantly, 55,000 of those coming in—less than 10 per cent of the 567,000—were work-related non-EU citizens, and 79,000 work-related non-EU migrants departed, as was mentioned earlier. We need these people in our economy.

Referring only to the arts sector, while the number of skilled classical ballet and contemporary dancers, orchestral musicians and other creative workers coming to Britain under tiers 1 and 2 is relatively low, their importance to the sponsoring organisations and our cultural life in general is extremely high. The arts sector’s economic contribution impacts most favourably, both indirectly and directly, on the Exchequer and places only very low demand on public services. I remind your Lordships that, according to the Department for Culture, Media and Sport, the creative industries in the United Kingdom, excluding crafts and design, account for 6.2 per cent of gross value added and some 4.5 per cent of UK exports, and in 2008 provided nearly 2 million jobs. It is an industry for which we have worldwide recognition for excellence and receive much applause.

Immigration controls are, I fear, necessary. However, implementing a cap on a small minority—largely comprised of persons whose skills and expertise we need—without addressing the elephant in the room by initiating discussions with the European Union, so as to manage better the current largely unlimited and oft-abused free movement of people within it, would be to the nation’s long-term detriment.

My Lords, I also thank the noble Baroness, Lady Valentine, for securing this debate, which is both important and timely.

In the United Kingdom, we have only two seasons: this winter and next winter. Although immigration is a controversial issue, I hope we can at least all agree that immigrants do not come here for the good weather. I do not start in this way because I think this is not a serious issue. The fact that immigration has so rarely been discussed in either House, or by the wider public, over the last 12 months indicates that the topic needs to be tackled more often, without fear of causing offence. The immigration debate is too often—sadly, encouraged by the media—conducted in angry terms. You cannot shake hands with a clenched fist.

My children are very proud to be typically British: that is, they are a mixture of African-Caribbean, Polish, Irish, Scottish, Jewish and Indian. Immigration has enriched our culture and enhanced our nation. Many British icons are immigrants or descended from immigrants. We need only to look at the medical profession, our sports stars, showbiz celebrities and, increasingly, the business world.

It was a very different Britain when my father first arrived from Jamaica in the late 1940s, to try to make the grade playing county cricket for Warwickshire. He also hoped to use his skills as a qualified accountant, but the only job he could get initially was cleaning the toilets at the Lucas factory. When he was trying to find accommodation, all he could see were signs in house windows that read “No blacks, no Irish, no dogs”. However, he did not become bitter; he got better and eventually made a life for himself. He discovered that whatever nationality or colour you are, this country loves winners, not whiners. Scoring a century for Warwickshire against Leicestershire in 1949 instantly transformed him from being described in the local newspaper as “Jamaican Taylor” to “adopted Brummie Taylor”. I certainly learnt from him that when you are going through adversity, you do not give up, you get up.

Clearly, the United Kingdom has benefited from immigration. It is vital to continue to attract the world’s most talented to come here and drive strong economic growth. Immigration is a big topic with many facets to it, but the noble Baroness, Lady Valentine, has rightly focused on a particular issue of the non-European Union migrant cap. I personally do not believe in unlimited immigration, but I share the concerns of John Cridland, deputy director-general of the Confederation of British Industry, who feels that the interim cap is,

“causing serious problems for many firms”,

as the figures used for setting it,

“were artificially low as they were based on numbers at the height of the recession in 2009”.

If it is essential to have a cap, skilled migrants with a job offer should be given priority since they are able to pay taxes, are relatively few in number and, of course, place low demands on public services. We have heard a lot already from other noble Lords about the need for companies to transfer staff from one country to another, and to keep Britain attractive as a global location for investment for jobs. As the economy gears up for growth, the UK must demonstrate that it is open for business. Companies must still be able to access the best and the brightest talent from all over the world, and not only in the business sector. As we have heard so eloquently from other noble Lords, this applies also to students, academics, researchers and those in the performing arts.

There is evidence that this interim system is being poorly managed and proving a problem for firms trying to keep on valued foreign members of staff or to recruit specialists from abroad. These difficulties will undermine confidence that the permanent cap will work. The migration system must support, not stifle, growth. Research by the International Organization for Migration warns that, on present demographic projections, developed countries will experience labour shortages due to falling birth rates and ageing working populations. So managed immigration can be the solution, not the problem. Yes, the history of immigration has been a chequered one, but there is only one race—the human race. We should not use this interim cap literally to bash a very small section of migrants. They are talented people and we need them. The Government now have the opportunity to help build bridges, not walls, between our diverse communities.

My Lords, right up front I declare my interest as an immigrant. When I first moved to the UK from India in the early 1980s as a 19 year-old student, I was warned by my family and friends that, as a foreigner, I would never be allowed to get to the top because there was a glass ceiling in this country. How right they were three decades ago, but today I look around this country and see people in the Asian community and from all over the world reaching the very top in every field. Over the past two and a half decades, I have seen with my own eyes the glass ceiling well and truly shattered. Today in Britain anyone can get as far as they want to and as far as their aspirations and abilities take them regardless of race, religion, or background. We are one of the most open and truly multicultural countries in the world. Yet, in spite of this, this Government have imposed a cap on immigration.

I thank the noble Baroness, Lady Valentine, for securing this debate at this crucial time. There is no denying that the previous Government lost control of immigration and of our borders and that hundreds of thousands of illegal immigrants come to this country not to contribute but to sponge off our overly generous welfare state. The Government are absolutely right, and have the backing of the British people, to stop this abuse of our generous nation. But to do this by imposing a cap on all immigrants is not only crude but sheer stupidity, as we are shooting ourselves in the foot by depriving our nation of the immigrant talent that has been a huge factor in, and made a huge contribution to, making this tiny nation a global power and one of the six largest economies in the world.

I must issue a warning. People all over the world are being warned about the dangers of economic protectionism brought about by the economic crisis. Treating immigration with a cap in a closed-minded way and with a kneejerk reaction, as this Government have done, is just as serious for our country as economic protectionism, if not more. Immigrants contribute to just about every sector of our economy in both the public and private sectors—just look at our beloved Gurkhas in the Army and at the NHS, as we have heard. In my own business, I have seen the curry restaurant industry make Indian food a way of life in this country. This year, the Bangladesh Caterers Association celebrates its fiftieth anniversary, yet it has been hit by the points system and now the immigration cap, and is struggling to get skilled staff, particularly chefs. This is a community of pioneering entrepreneurs who are living examples of the Prime Minister’s big society initiative. They integrate into their local communities and, most importantly, they put back into their communities. Instead of being grateful to them for the hundreds of thousands of jobs that they create and the billions of pounds of revenue that they generate, we slap them in the face. This is sheer unfairness and sheer ingratitude.

In the catering industry hard work is a mantra and perspiration is a creed. When others play, its staff work; and when others are asleep, they are awake. When noble Lords go into restaurants and hotels around the country do they notice that often there are more non-British-born employees—whether from the EU or outside it—than British-born employees working in those establishments? We need look no further than our very own Peers’ Dining Room and the Barry Room, where British-born staff are by far the minority. But would we have it any other way? Our staff are the best in the world and I would not change them for anything.

My five year-old daughter is privileged to be at one of the best primary schools in this country. She needs special needs help. Recently, we received a letter from her Australian occupational therapist. It states:

“Very sadly in light of the immigration cap imposed by the new Government, certificates of sponsorship have been drastically limited and my company will not be able to sponsor me. I am incredibly disappointed at the thought of having to leave. My company has been trying to recruit a suitable therapist to replace me but to no avail”.

Where is the sense in this? Where is the sense in me, my family and my five year-old daughter suffering because of a stupid immigrant cap—a blunt tool? In this debate we have heard from noble Lords example after example of their personal experiences. This is a crude instrument as it does not take into account the skills that we as a country in economic turmoil so desperately need if we are to drive forward in the fields of science, technology, manufacturing, engineering and enterprise—the list goes on.

A letter published in the Times earlier this month from eight Nobel prize winners was a stern warning of the dangerous effects that this cap could have. Since 2007, five out of six Nobel laureates based at British universities were born outside the UK, such as Venki Ramakrishnan at my old university, Cambridge. More than 10 per cent of academics at British universities are foreigners. We can pride ourselves on having some of the best universities in the world. Foreign students, as the noble Baroness, Lady Prashar, said, and foreign academics play a huge role in making this the case. Do we really want to jeopardise this by implementing rules that make it hard for some of the world’s greatest minds to come here and enrich us, as the noble Lord, Lord Ryder, said?

The Indian community in this country makes up just under 2 per cent of the population and yet it contributes double that percentage to the economy. But you cannot merely put a price on immigration; it is priceless and enriches our lives in every way. As we have heard, London is a great example of that.

I conclude by recounting my father’s advice to me when I came to this country. He said, “Son, wherever you live in the world, integrate fully with the community you live in, but never forget your roots”. I am very proud of my Zoroastrian Parsi roots. I am very proud to be Indian. I am very proud to be an Asian in Britain and, most importantly, I am very proud to be British.

I implore the Government: do not throw the baby out with the bathwater. Control the immigration that needs controlling, but do not deprive this nation of the immigrants that we desperately need and the immigrants that have made this wonderful nation of ours world famous for our world-beating talent and for our world-renowned sense of fairness and justice.

My Lords, I too thank the noble Baroness, Lady Valentine, for procuring this debate. I have to say that those who follow me might wish to add a rider to their own congratulations, deploring the fact that she did not stop me speaking, because we had a conversation in advance in which I told her that I had absolutely nothing to contribute to this debate, given that I have no experience of immigration or multiculturalism. To demonstrate that, I told her an anecdote that she thought was good enough to be repeated today, and that is what noble Lords are about to get. You must blame it on her afterwards.

My story starts in the trenches of the Somme in 1916 with a Major Alexander Crombie, who came out alive but deeply scarred from the experience and decided that he wanted to make a contribution to world peace. He took what little fortune he had and created a small academic academy with the express purpose of bringing in boys from European nations whom he could then groom for the common entrance examination and place somewhere in the public school system in Britain. This establishment prospered through even the Second World War and had arrived in 1947 at a point at which it had some 25 boys—all bright and intelligent fellows.

In parallel with that, I had been having my own educational crisis which had resulted in my being classified as mentally defective by the London education authority and sent to a school for mental defectives. My father was unamused at this and decided that I had to be removed immediately from that school and that he had to find somewhere to send me. Someone suggested that he talk to Major Crombie, who was then quite an old man. Major Crombie said, “We can’t have this fellow in; he can’t read and could not even do the 11-plus”. My father said, “Never mind; that proves that he is a refugee from the London County Council, so you’ve got to have him”. Crombie looked at a list and said, “What did you say your name was? James? We have 25 boys here—one for every letter of the alphabet except J. We’ll take him”. So I got in.

We had an amazing roll call every morning. It began with Adybaya, Baptista, Chinchialla and Dukszta, and ended gloriously with Xyrus, Yballa and Zabialski. I used to think that if I could get through life and remember the entire roll call, I would know that Alzheimer’s had not yet reached me. After I had my stroke, I said this to my physician, who said, “No, old boy. You may remember all the other 25, but your trouble is when you cannot remember who the J was”. So far, so good—but not for long, I am sure.

This was a remarkable gathering. We had some really fine brains in the class, but we were all under the control of a former Coldstream Guard padre called the Reverend Wynn, who was one of the great men of my life. He decided that he would have no nonsense with us at all. He was going to have a morning service or gathering. When we said, “Father, we have 17 nationalities and eight religions here, so we cannot possibly have a religious gathering in the morning”, he said, “Of course you can. It does not matter which god you have—you are going to celebrate the glory of this world. Bring your god with you, whoever he is, and we will all celebrate the glory of the world together”. And we did. We could not have any readings from the Bible, the Koran or anything else. He formed a committee of us to find suitable prose or a poem every day which would celebrate something of beauty in the world.

There were to be no hymns sung, so he decided—very unwisely, as it turned out—that we could all, in rotation, sing our national anthems, to which we could write our own words of a non-jingoistic nature. The honour went first to the three British boys. We decided to use “Pomp and Circumstance” and rewrite the words to, “Land of cut the call-up, how do we dodge this nonsense?”. That did not get us any merit points. The situation completely fell to pieces when the two German Jewish refugee boys at the school decided to write their own version of “Deutschland Über Alles” and got their little bit of revenge on Germany in the process. They decided to devote the words to the most obscene account of Hermann Göring having sexual congress with a lady kangaroo, which ultimately proved fatal to him because it would not stop jumping. After that, the Reverend Wynn decided that there should be no more of that.

This extraordinary gathering of boys with huge talent had one great skill that united us. We had a lot of Eastern bloc boys among us with a huge capability at chess. We had one of the strongest chess teams that you could ever put into the field—even at the age of 11 or 12. After we got into the quarter finals of the London schools knock-out competition with a team of 12 year-olds in 1947, we asked the Reverend Wynn to issue a challenge invitation to Eton and Winchester. I do not know whether there are any Wykehamists or Etonians in this assembly, but if there are, I have to say, “Oh, what a bunch of wimps you were—you would not take the challenge”. I hope that you have that to your eternal shame, gentlemen.

The gathering continued very successfully and nearly everyone in the class got into one of the better public schools. We had a wonderful time together. I am sorry that the noble Lord, Lord Giddens, is no longer present, because this is probably the antidote to his comments about multiculturalism. Oh, here he is. This is probably the noble Lord’s nightmare of multiculturalism gone wrong, but it was in fact brilliant. Of the 17 nations from which we came, about half had been trying to exterminate the other half during the previous five or six years, yet everyone got on so well together because we were completely without the preconceptions instilled by too much political correctness and preconditioning as to what we ought to think of each other and how we ought to react. We were the biggest bunch of mutual support people ever gathered together in one place. Today I cannot see what the problem is with the interracial problems of immigration. We did it fine. We were young, we just got on well with each other, and that was a natural instinct. If we stop dictating to and preconditioning people, it works very well.

My Lords, I thank the noble Baroness, Lady Valentine, for initiating this important debate.

My grandparents were immigrants, and I like to think that despite their extreme poverty they made a worthwhile input to our society—albeit in a very small way.

I speak as someone who was raised in Hackney, served on Hackney Council and was then MP for Hackney Central. I speak with some authority on immigration because so many of my constituents at that time were from all parts of the world. When I grew up in Hackney, there was scarcely a black or brown face. Today, that has dramatically changed. When I go back there, I can see that immigrants from all over the globe people the area. They are black, brown and white. All bring their own talents and experiences, and that is worth while.

Music, of course, has enormous diversity and has undoubtedly played an important part in the development of the area. That is true also of the proliferation, exchange and understanding of ideas and views which undoubtedly exist. There is, however, also a downside which, regrettably, is often distorted. Of course, extremist groups exist among immigrants and others. They engage in wild and divisive talk. Some have rightly suffered custodial sentences.

In general, however, poor areas such as Hackney have been richly rewarded by multiculturalism. Public transport—buses and railways—could not function without the input of the immigrant community and their progeny.

The same is true of education, the National Health Service, law and so many aspects of our society. Still, however, there are too many barriers—some thoughtlessly erected, perhaps unwillingly—but many have the support of some of the community, which is a matter of regret. There are some unhappy examples but one could say the same of our entire society. In the main, there is no doubt that areas, such as Hackney, have been enriched enormously. That has spilled over to the wider community. I speak with some knowledge of the subject as many of my clients were from immigrant communities. Many were worth while—not all, but many of them—and I am very proud to have represented so many of them. I hope that that will remain so for a very long time. Any threats, such as we have witnessed already, must be attacked and resisted. I am very proud of my background; I was proud to be in the Commons and I am proud to be here. When I think of what has happened it is remarkable, is it not?

My Lords, I, too, am grateful to the noble Baroness for introducing this riveting debate. I apologise for arriving a couple of moments late for her introductory remarks. I was keeping an eye on the screens while talking to a young Muslim human rights lawyer who was telling me about things to do with immigration which are for another day. They were mainly to do with connections between Muslim immigration and terrorism and the reasons why we are where we are today.

Rather than addressing the economic or cultural issues, I shall take noble Lords back. I now find that I am at that difficult moment of being above the average age of Members of your Lordships’ House, so can be forgiven for going back in time. When I first came to your Lordships’ House, my maiden speech was on a subject that I knew something about—third world Africa. As a result I got into a number of debates on subjects allied to that and made great friends with Lord Pitt of Hampstead. He and I sat on the other side of the Chamber together and he introduced me to a lot of very interesting reading about the development of the Caribbean, its economy, the slave trade, and so on. At an early stage in our relationship he said that the greatest mishap for immigration and the Afro-Caribbean community here was the decision to go down the path of multiculturalism. He pointed out that it resulted in the ghettoisation of his community. As the younger generation succeeded their parents, the limitations placed on young Afro-Caribbean men, in particular, was a great shame. We all know about that. It was a black spot in our immigration history and policy.

However, it has not been all bad; we have generally opened our doors to those who have come here for various reasons, such as fleeing persecution, natural disasters, and so on. The noble Baroness mentioned the Huguenots. They were more of a problem for the French who created a problem themselves by getting rid of the Huguenots. They were the motor of manufacturing and innovation and their ability to create wealth in France was lost when the Huguenots were dismissed and came here with a great deal of expertise. They contributed enormously to our society. They were mostly educated, of course, and did not have some of the problems that we face today with people coming from agricultural communities. The Huguenot population was enormously influential in the textile industry and, curiously enough, also in the Army. A lot of people seem to forget that the most successful soldier in the 18th century was Field Marshal Ligonier who I do not think ever lost a battle.

Immigrants have played a very important part in our lives. They have invigorated us, as has been said by other noble Lords, and still do, but we have missed many opportunities. Going back to the Afro-Caribbean community, a lot of young men on the streets are pessimistic about their future and take the wrong path. However, there are many, particularly in the arts, in the world of music and dance, who make a great impact on our community. Short-termism in immigration policy, which continues to this day, has been wasteful.

I was reminded again of the immigration of those who escaped persecution when the sculptured head of the Queen by Oscar Nemon was unveiled in the Royal Gallery. He came here as an immigrant from Brussels. He was an infant prodigy in sculpture and the arts and got early warning that Belgium would be overrun by the Nazis. He dropped a successful career and came here. After the war he sculpted most of the important members of British society at the time. He became a British citizen and created a family. All his original family, bar one sister, were eliminated in the Holocaust. He married a British wife and created an English family. His impact on the arts in the post-war period is immense. One could give many other examples.

I was impressed by the speech of the noble Lord, Lord Taylor of Warwick. The remarks of Lord Pitt of Hampstead about the obstacles to the Afro-Caribbean community were expressed in his speech. Immigrants from the West Indies came here to do jobs that nobody else wanted to do.

Governments now must take a long-term, strategic view on immigration. It is no good making it bureaucracy-led. The points system which has been described is so damaging that it needs to be reviewed by people who are committed to thinking about the issue in the long term so that we have a sensible policy, not only in terms of admitting people who are needed for their skills to create wealth but for the way in which we deal with those who come here because of persecution and other reasons. It is no good having a piecemeal system that requires constant adjustment.

My Lords, I, too, am grateful to my noble friend Lady Valentine for initiating this debate in which I want to raise one relatively small and specific issue about the way in which the immigration rules inhibit cultural and economic benefits to this country. I refer to exchanges that are designed to last a full academic year between school students in state-maintained secondary schools and their opposite numbers in non-EU countries.

One such scheme is the Rotary Youth Exchange, which has been recognised internationally as one of, if not the, best student exchange programmes in the world. Before 2009, when the tier-based immigration rules were introduced, about 60 school students a year were able to do an exchange as part of this programme. Typically, they are in year 12, or the lower sixth, but now only those wanting to exchange with a student from an EU country are able to participate, because the immigration rules disallow the non-EU school student from coming to the UK for a full academic year. Before 2009, there had been an exemption for exchange students in schools, enabling a 12-month visa to be issued, but this concession has been withdrawn.

It is worth spelling out what the advantages of exchange programmes are, not only for the young people from abroad who come and experience British school life for a year, but for our teenagers, who gain enormously from their leg of the exchange and the opportunity to understand and appreciate other cultures, to learn another language and to live in a host family, while having their safety and welfare overseen by the Rotary.

The Foreign Secretary, in a speech earlier this year, warned that Britain’s place in the world would inevitably decline if it did not embrace an agile and energetic foreign policy that cultivated ties beyond the narrow circle of western powers. What better way of cultivating ties than through young people, particularly if they are guided and assisted on their journey by such a prestigious and well established organisation as Rotary International? The educational and cultural benefits to those young individuals today will turn into competitive and economic benefits to the UK as a whole as they grow up, enter the labour market and drive international business and national reputation.

Three out of the four countries mentioned by the Foreign Secretary—India, Brazil and Turkey—are eager to participate in the Rotary Youth Exchange. The programme is also strong in Taiwan, where UK students can learn the main language and culture of China, the fourth country mentioned by the Foreign Secretary, yet the school students from those countries are precisely the ones who are no longer able to come to the UK to spend an academic year in a state school as an exchange student. Consequently, our school students are denied the opportunity to do likewise.

The Government argue that six months should be the limit on school exchanges, and that is the extent to which tier 4 of the points-based system will go. It is argued that, beyond six months, it counts as replacement education for non-EU nationals, which should not be provided at the taxpayer’s expense, but that is somewhat illogical, given that exactly the same costs are incurred for EU children on the same scheme. Furthermore, given that, by definition, the scheme is reciprocal, for each foreign student here one from the UK is placed abroad. In any case, there is a strong argument for saying that both the short-term and long-term benefits significantly outweigh the immediate costs, in a global environment where intercultural understanding and co-operation, particularly at a personal level, are so vital in fostering better relationships.

Given that before 2009 there was no problem or issue with granting 12-month visas to non-EU school students coming in on exchanges, I ask the Minister to accept that the current situation is in fact an unintended and unforeseen consequence of the points-based system. It seems to me that the Department for Education’s argument about six months being adequate is something of a post hoc rationalisation of a situation that it was not expecting and certainly had not been responsible for creating. Will the Minister be good enough to undertake to correct that anomaly and amend the relevant immigration rule, and perhaps consider granting highly trusted status to the Rotary organisation, so that children aged under 18 from schools in non-EU countries are once again able to participate in the full academic year youth exchange with state schools in the UK?

My Lords, I, too, thank the noble Baroness, Lady Valentine, for introducing this debate in such an eloquent way. I shall focus on the impact of the immigration cap on scientific research. Here, I can only re-emphasise many of the comments of the noble Baroness, Lady Manningham-Buller.

Yesterday, the Chancellor emphasised his commitment to the science base and to spending on medical research, but the Government's current policy on immigration seems designed to run in exactly the opposite direction. If you want an example of globalisation, you do not need to look at the banking or financial world; you should look at the scientific world. Science is the most international of activities and it knows no boundaries—or at least it did not until we put up these barriers to free flow of the scarce talent that makes up the scientific community. Although we are in a competitive market, we are also extremely fortunate in the UK, because the high quality of our research can attract the best. Three recent Nobel prizes speaks volumes and, as a loyal Mancunian, I am delighted with the success of our two physicists in Manchester. However, both of those physicists came from Russia, and it is quite likely that at least one of them might have been prevented from coming here because he could not have fulfilled the criteria now needed to gain access.

I must step back a moment to expose my bias and interest as scientific adviser to the Association of Medical Research Charities and as a trustee of a number of medical research charities, but you do not have to be as biased as me to recognise the value of research both to society and to the economy of the country. Your Lordships will remember the calculation a year or so ago showing that we get a return of 37 per cent a year on every pound that we invest in medical research. A recent publication from an impeccable source, Haskel and Wallis—you cannot get more impeccable than the son of the noble Lord, Lord Haskel—showed that if research funding decreased by £1 million a year, GDP would fall by £10 million.

So the question now arises why we should be threatening the very basis of excellence in research. Let me give your Lordships some examples of the damage being caused even now by application of the cap to scientists. At the Sanger Institute, which the noble Baroness, Lady Manningham-Buller, mentioned, research into the human genome leads the world and it is already the home of at least one Nobel prize. Currently, there are 19 non-EU scientists working—I make it 19, rather than 17—of whom only four would meet the new criteria to gain a visa. Previously, your PhD counted for quite a lot of points and your salary relatively few. Now, qualifications count for less and earnings count for more—more than most post-docs can ever hope to earn. The problem is compounded because visas last only three years while most research posts are for four years, so if you are already here you have to apply again for your final year, and as the criteria have changed in the mean time you are very likely to be thrown out before you have finished your research. For tier 2 posts, one has to advertise in the local jobcentre, to give the locals a chance to apply. It is hardly a surprise that, for the 64 vacancies advertised by the Sanger last year locally, it received not one application. Of course, there are very few zebrafish geneticists or bioinformaticians hanging around jobcentres these days. What a waste of time and resource. You can get such expertise only by an international search. The Beatson Cancer Institute in Glasgow has been allocated just one visa application, but the Beatson, which attracts an average of five new non-EU immigrant scientists a year already has an American, Canadian and an Israeli working there, who will need another visa to complete their four-year programme, so it is placed in an impossible position.

At the Rutherford Appleton laboratory, a collaboration with the Japanese physical research institute, in which scientists are constantly exchanged, is severely threatened. This type of story can be repeated for every major research institute across the country. It is an outcome that can hardly have been the Government’s intention when they introduced this cap. Will the Minister look again at how the system could be made less damaging to research, which the Government say that they are keen to support? It cannot be that difficult.

My Lords, I, too, thank the noble Baroness, Lady Valentine, for securing this debate. I should like to add my voice to those who have talked about the impact on the creative industries and culture. I declare my interests as chief executive of the Royal Opera House, chair of the Cultural Olympiad and a non-executive director of Channel 4.

Across the UK, the creative and cultural industries employ more than 700,000 people and contribute nearly £25 billion gross value added to the UK economy each year. The sector is growing fast. This is something that we are extremely good at. However, without a shadow of doubt, the interim limits on migration brought in in July are having a damaging effect, while even tighter limits from April would make a bad situation worse.

Let me give a couple of examples of what I mean. The UK is very good at animation and visual effects. However, while we are good at the creative side of things, we do not have enough people in this country who are good at the programming to make the creative ideas work. Programmers have rightly been accepted under the route that allows shortages to be addressed but, if you cut back on the numbers allowed in under tier 2, you could have a British success story under threat. Much the same applies to our computer games sector, which, with software and electronic publishing, contributes a third of the value of the exports of all our creative industries. Here again, we have the creative talent; the problem is on the technical and software side.

The long-term solution is clear to me. Skillset, the skills council for this area, is working closely with universities to increase the supply of UK workers with these skills, but of course we need to start earlier than that, making children at school aware of the opportunities. We also need to think about expanding the number of apprenticeships and work placements in these areas. However, that will take some time—five, eight or 10 years. In the mean time, we cannot and should not put at risk what are successful sectors of the UK economy because they cannot get the skills that they need.

I hope that the coalition Government will look again at caps on immigration. I hope first and foremost that they will not change those things that were previously working well. I further urge the Government to assess the economic impact on growing and specific sectors of our creative economy and to link in to that by seeing how best we can increase the skills in this country in these important areas in the longer term.

Will the Government—this is another issue—review the cap as it applies to artists coming into the country? As has been said, orchestras and dance companies in particular are already finding the current limits difficult, never mind the tighter ones that are scheduled for April. It is vital for arts and cultural organisations in the UK to be able to get the best people from around the world to come and work here. We pride ourselves as being the cultural capital of the world. This is something that we are really good at. It has been achieved by allowing, over many years, talented artists from all over the world to live and work here. Our diverse society, where so many different currents from around the world meet, is an exciting, creative and challenging place where people want to be. It is something that we want to show off in 2012 with our Olympic cultural festival. We want our dance companies and orchestras to be at the top of their game. Rather than throwing up barriers in their way, we should celebrate when international artists, such as Carlos Acosta, the Cuban dancer, want to come and live here.

Interestingly, as has been said, this argument has been made and accepted by the Government for elite sportsmen and sportswomen, who are quite rightly exempted from the limits. My question is: why should not elite artists—the world’s best performers, dancers and musicians—and perhaps others, too, be given the same status? I have put this argument to both the Home Secretary and the Migration Advisory Committee.

It is not just tier 2 and the cap that are causing problems for the cultural sector in attracting the world’s best; the problem is also the application of the broader visa system in other areas. Last year, we at the Royal Opera House had such difficulty getting a visa for a Russian designer that it was easier for my team to fly out to Moscow than for him to come to London. In the end he got in, but it was a real obstacle course. An Australian principal dancer with the Royal Ballet had incredible difficulty getting a visa to return to the company in London. It took nine weeks and an Australian MP had to intervene on his behalf.

I mention our experience only because it is closest to me, but I know that this issue has an impact right across the cultural sector, from world music to our great museums, whose cultural exchange programmes do so much to build up relationships across the globe. The free movement of artists and thinkers is fundamental to the British way of life. It is something that we used to take pride in and we still should.

My Lords, I, too, am grateful for the opportunity to listen to the excellent speech of the noble Baroness, Lady Valentine. I declare an interest; I run the Good Schools Guide. I shall talk mostly about students, therefore, but I start by saying how much I agree with many of the speeches that have been made today, including those by my noble friends Lord Ryder and Lord Newby, pointing out what a daft situation we have got ourselves into so quickly under our new Government. With this cap, we are going for the practice of central planning. We are doling out places in ones or twos. The people doing it have no understanding of the requirements of the various industries. It is all too evident to me, from education, how completely at sea they are when it comes to the real requirements of the industry. We will do ourselves immeasurable and long-term damage.

The City, the higher levels of academia, bits of the arts and other industries, as the noble Lord, Lord Newby, pointed out, are not British businesses; they are international businesses that happen to be here. Once they are here, people come to them. If you want to go somewhere good to do something, you go where other people are already doing something good. If we destroy those businesses by refusing them the infusions of international expertise that they need, we will not get them back within a couple of generations. This is a daft way of trying to address the economic problems of this country. The difference between what the Home Office is doing and what my right honourable friend the Chancellor of the Exchequer said yesterday is just astonishing. I very much hope that the Home Office will come to its senses.

Schools and colleges are a major, but rather funny, exporter; we do not export goods, we import our customers. This country has an excellent reputation for education. Education provides many jobs. We are a growing sector. We face fierce competition, not just from the established providers in America and Australia, but also from Europe, which is getting much better at providing international education. Indeed, people are starting international schools all around the world and some of them are extremely good. However, we are still succeeding in this market.

What we need and expect is strong support from the Government, but what we get is the UK Border Agency. The UK Border Agency has in its hands our reputation as providers of education. It is our front end. However, it is inefficient. It delays. It has a pettifogging attachment to incredibly complex and bureaucratic rules. All too often, there is hostility and unhelpfulness.

Let me give a few examples. I start with independent schools, because that is where most of my knowledge is. I am not aware that there has ever been an instance of a foreign pupil at an independent school becoming an illegal migrant—at least, not while they were at school—or turning into a terrorist threat. However, we are in a position in this country where, on the border of half term, 60 students who wish to come to independent schools are stuck abroad because they cannot get through the regulations. The bureaucracy and systems that are imposed on schools are extraordinary. Our officers overseas lack training and do not know the rules as they apply to schools. The limitations on CAS forms mean that, even if you are successful in selling a few more places to overseas students, those students cannot come, because the wait to be issued with more forms is something like five months. For what is all this bureaucracy and waste? What benefit does this bring to anybody? There is nothing but loss to our reputation and damage to our business. I cannot see a single benefit to it.

Further education also seems to be suffering in this system. Someone has dreamt up the crazy rule that you cannot study a course for more than six months unless it has been accredited by Ofqual. Does the Home Office not realise what Ofqual is? It exists just to deal with school qualifications in the context of the English state system. The rule means that you cannot come here to study such courses as air traffic control or predictive maintenance in the oil industry, which is a pretty important course in view of what has been going on in the Gulf and, indeed, what we are proposing to do in the deep North Sea. It is a serious course and as good as anything that is provided in a university, but it is not a university course, and it is not listed by Ofqual, which is not surprising because it is not what you do at school, so you cannot get a visa to come here to study it. If you want to start up something new, if you have a new idea for a course that you can sell to students internationally, how do you do it? Under the new rules, you cannot even begin to get the permissions you need to establish your business.

I really hope that we will see some sense brought into the system. I understand that the continual changes of rules have been a result of building up the points system and the difficulties the previous Government had in having to respond to every twitch of the Daily Mail by producing another regulation. I think we had nine changes of guidance in 14 months, which is not helpful in this area. I know we are dealing with a difficult situation, but we must develop this concept of the highly trusted sponsor. If you are going to trust someone, trust them. No one escapes from independent schools. They are locked down solid, so if an independent school that has achieved highly trusted sponsor status says, “We want that guy”, let him in. Why do you need to do anything else? As the noble Baroness, Lady Coussins, said, rotary clubs are not exactly short of reputation. If they say, “We have ticked this student exchange”, why is there a need for any other bureaucracy? That principle also ought to apply to universities, further education colleges, both state and independent, and to those who have earned the status because they have so much to lose if they lose that status, as so much of their income is dependent on having it. They will protect it. You do not need all the bureaucracy and controls to go with it.

The Home Office must work with the Department for Education to develop a proper understanding of what education in this country is, how it works, its variety, its strength, what it can be trusted to do and all the opportunity there is for creating jobs, business and wealth in this country if the Immigration Service does not get in the way. The Immigration Service is being paid to do a job. It charges for this business. It ought, like a commercial company, to be crisp, efficient and fast in providing the services that we need. If we do not get that, we will get a lot of damage to an industry that means a lot to me and to this country.

My Lords, I join noble Lords who have spoken so far in congratulating the noble Baroness, Lady Valentine, on securing this debate. I, too, speak as an immigrant. When I arrived, I think the London School of Economics had to get a labour permit to allow me to work. All I can say is that it must have been very easy to get a labour permit in those days. As a matter of principle, I believe in the free movement of capital, commodities and labour. In the best of all possible worlds, there should be no restriction on immigration anywhere, and preferably not even passports. That having been said, we are in the situation that we are in. That used to be the liberal position: liberal with a small “l”. The big “L” people have been trapped, so they cannot express their desires.

As other noble Lords have given instances, I shall give the House an instance of how much people from abroad coming here as students helps us. I recently had the privilege of representing the Lord Speaker at a meeting of Speakers of G20 nations in Ottawa. The person heading the Chinese delegation sought me out and said how happy he was at Durham and Bristol. He was a solid-state physicist. He fondly remembered this country and talked to me enthusiastically because he had been able to come here to do his research and then go back. He is now the vice-chairman of the Standing Committee of the National People’s Congress of the People’s Republic of China, and we have a friend of Britain because he was able to come here and research. That is the kind of intangible advantage that we have across the world because we are able to admit students freely. There was a panic under the previous Government, especially at the height of the recession when they were facing an election, and quite frankly we lost our nerve. Having built a very liberal immigration policy inside the European Union, noises began to be made about restricting immigration and how we had to explain to our core supporters that we are not actually in favour of immigration. We have to stop being apologetic about this.

Enough people have spoken about the advantages of immigration, but let me advance an argument that has not been made so far. The standard crude argument about immigration is that we cannot afford extra population in this country, that population is a burden and therefore some kind of Malthusian spectre will rise because our population will go from 60 million to 70 million and perhaps to 80 million by 2075 or whatever, and that is bad. Contrast that with the common debate going on in the global economy about China and India. Everybody is saying that China adopted a one-child policy and is prematurely about to have an ageing population. India did not adopt a one-child policy and is going to get a demographic dividend. The Malthusian spectre has turned around in the modern globalised economy and become a Malthusian blessing. The current state of the debate is that a larger population is not economically harmful. People are saying how much India will gain from the fact that it will have a young working population much longer than China.

In Europe, we have a stagnant, ageing population. One way out of it would be to encourage immigration. If we are going to make our dependency ratios better so that not my pension but the pension of my children is paid properly, we will need a different kind of economy with a much larger proportion of people in the working-age population than we are expected to have if we restrict immigration. From a macroeconomic perspective, the whole argument about immigration can be turned around because there is already evidence in the global economy that people are beginning to realise that countries with expanding populations—the United States, Brazil and India—will have an advantage over countries with stagnant or ageing populations. That argument could cogently be made. We can say that people should be free to come, leave and go where they like. We should be able to say that our future growth prospects depend very much upon having no limit on how our population can grow.

The point has already been made that if we could get reform of the benefits system, the incentive for British people to work would be greater, in which case immigration may settle itself according to the economic incentive of whether there are jobs here for immigrants. As the noble Lord, Lord Taylor, said, nobody comes here for the weather; they come for the jobs. If we could alter the conditions of supply of British-resident workers, immigration might reach some kind of equilibrium. I beseech the Government to go back to their instincts and be much more free-market than they have been able to be. If it all goes wrong, they can blame it on me.

My Lords, I also thank the noble Baroness for giving us the opportunity to discuss the many different aspects of this problem. The noble Lord, Lord Desai, mentioned stagnation. My feeling is that a stagnant economy—an economy which has pulled up all the drawbridges—is a very unhealthy economy. People move for many different reasons: they want to flee persecution and poverty; they dream of a better life; they want to escape war and oppression. Over the centuries the compassionate nations have understood their predicament and made them as welcome as they possibly can. Mind you, in some cases our response has been very hesitant and we have later looked back on it with perhaps a sense of shame. During the 1939-45 war, and in the years before, it took special pleading to allow in many of the people trying to escape from Hitler's Holocaust. One thinks of what happened with the kindertransport and one hopes we would not act in that way today. We ask: could we have done things differently?

Some come to the United Kingdom imagining that the streets are paved with gold—in parts of my work I deal with many such migrant workers and people. I know how disappointed so many thousands of them are when they come here and find that life is not as paradisiacal as they thought it would be. I would like to express a word of gratitude to the organisations that try to help those who come here as migrant workers but who then are faced with such great problems. Perhaps I may also say how distressed I am that, in one of the newspapers this morning, there is still an attack on migration and overseas aid and some of the other things that make some of us feel pretty proud. Their approach is different from ours.

Some have come here seeking their fortune and some have succeeded. I know that London would be without any milk at all if not for the Welsh dairymen who came to London. In the 1920s and 1930s there were 3,600 Welsh-owned dairies in London. You know, I am so proud to be a Welshman when I am able to relate such facts. And then there are the shops: in London there is DH Evans and Dickens & Jones; and half the shops in Liverpool were founded by Welsh people—people such as Owen Owen and TJ Hughes. People have always moved, so I do not know why we are so judgmental of economic migration. People want to make a better life. People want to venture to new areas. So many Welsh people have found their opportunity by coming to the large cities on this side of the border.

We can also see the way in which the compliment has been returned. In the 1930s there was desperate depression in much of Wales, particularly in the south Wales valleys. The noble Lord, Lord Rowlands—formerly Ted Rowlands, the MP for Merthyr Tydfil—in his book about that period, entitled Something Must be Done, says that most of the inward entrepreneurs to south Wales were of Jewish origin. No fewer than 48 of the 78 companies to establish themselves at Treforest were Jewish companies. One Cabinet paper of the late 1930s stated:

“It would be in the public interest to try to secure for the country prominent Jews who were being expelled from Germany”.

We welcomed migration. We saw the advantage of migration, in and out. Trying to halt migration is a King Canute act: it seeks to stem the tide of history. Imagine Parliament itself. Where would we be without the newcomers who work here? I looked at the catering department in the House of Lords itself and was able to count over 18 different nationalities. People have come here from Algeria, from South Africa, from the Philippines, and they contribute to us. It is a world in which we belong to each other. I must not preach a sermon, much as I am tempted to. But I do ask: am I my brother’s keeper? Sometimes we are. Sometimes we look to the brother; other times the brother cares for us. We are in one world.

Time permits me to mention only in passing the mass movement from our four UK countries to the new world. I know that we do not have a colony as Welsh people but we have a settlement in Patagonia. We have many Welsh communities in other parts of the world. I must mention before going any further that both Abraham Lincoln and Thomas Jefferson had a drop of Welsh blood in their veins. I am sorry—I could keep you for hours with the names of other people who have contributed in many ways, but I do not think that you would appreciate a long sermon this afternoon.

There is a general feeling of suspicion towards people other than ourselves. Instead of that, as has been mentioned time and again, we should see them as the people who have broken the stagnant waters. They have brought the fresh ideas here. The new people who went to south Wales created a better economy for the people of south Wales. We should treat the folk who want to come here not in an unwelcoming and harsh way, but in a way that says, “We will do our best to see that you, particularly if you flee from oppression or extreme poverty, can live a worthwhile life here, and in so doing you will enrich our community in the United Kingdom”.

My Lords, we should all thank my noble friend Lady Valentine for securing this essential and timely debate, because things are about to go badly wrong if we do not listen.

The speech of my noble friend Lord Rowe-Beddoe contained a succinct breakdown of the figures, and it has very much reinforced what I have been thinking. The trouble is that we are speaking the language of control about something that we cannot control. The trouble is that we are conflating three different sets of things and movements.

The first is the free movement of EEA and A8 nationals around the European economic area and the wider area. We have to allow that because we are now part of Europe. It is not really migration; it is the free movement of people moving their residency, possibly temporarily or possibly more permanently. We have to accept that this is like being part of the United States of America and we do not have rights to keep them out. They are not immigrants in the traditional sense of the word. Including them in the figures causes confusion because they are the larger part of the figures. When the newspapers say, “All these horrible foreigners are here”, they are very often talking about people who have every right to be here, as we have every right to move to their countries as well.

As for the other two categories, I shall describe the first simply as economic migrants—people who want to better themselves. Bringing them here does not seem to offer any particular attractions up front, but they can offer benefits. If we allow them to work and do not set up artificial barriers, they can contribute and fill essential jobs at the bottom of the economy. They also help their own their countries with the remittances they send home. I think that these remittances are much more effective than the foreign aid that we try to disseminate downwards through central Governments. It creates energy at the bottom end of those countries, on top of which the middle classes in those countries can build an economy—which probably destabilises dictators at the top. So I am not against economic migrants but I realise that that is probably the area in which we need controls. Such migration uncontrolled could cause a lot of instability.

Most speakers have concentrated on the third area and I should like to do the same: the movement of talent and talented people—people in the cultural, creative, artistic and scientific spheres—as part of what we call the knowledge economy. The knowledge economy is not, as some think, about people doing business online but about the movement of people with creative knowledge in the arts and sciences generating wealth and business. That is the knowledge economy and free movement is essential to it. Britain needs to become a brain magnet and bring people here. It would be absolute lunacy if we had a crude, crippling cap rather than seeking to create centres which bring together the talent that creates and nurtures new ideas and businesses.

Some good points have been made about the fact that we often do not have people with the right skills to support those with the creative ideas so that those ideas can be turned into something that you can do, use or whatever. Creative people—because skill is creative in itself, I include people who may be using their talent with their hands—are impatient and will move to wherever the pool of other talent is. When you have lost them, you have lost the entire centre. Our people—British-born people whom we think of as native —will move, too. We saw this in the 1960s. We will suffer a brain drain. We will not be a brain magnet, but will watch them all going away. Other people will follow and many will not come back—well, not until they retire, when they can be a burden on the state again.

How on earth did the Government arrive at a figure of 24,100? Did they just throw darts at a board? I do not understand it. According to one newspaper, they have just accepted 135,000 failed asylum seekers as a preliminary to dealing with the backlog of 500,000—although they are not sure how many duplicates there are—and in order to clear a big anomaly in the system. We are going to deal with that, and I am not saying that we should not do it that way: I do not want to get drawn into that argument, because it is one of the ways in which we will probably have to do it, or else every aeroplane and ship will be clogged up with people returning to countries that do not want them.

How did the Government choose 24,100 people whom we are going to use to grow our wealth? We have a huge debt crisis and are told that the Government want to nurture SMEs as the engine of growth in the future. We also do not want to lose the big companies that are already employing people and that will move terribly easily abroad if they have to. Now we have certificates of sponsorship, which are limited. Here I declare an interest that was drawn to my attention. I sit on the advisory board of a New Zealand company that wishes to come over here and set up a research unit, aided by the Welsh Government, because there are some highly attractive deals. One chap has just been doing a PhD at Swansea University. He is a Chinese speaker from Hong Kong. He is working on search engine technology for China. He has been working for the company already and we would like to get a certificate of sponsorship. I have no idea whether we will get it or not, but the New Zealand company will move its research department abroad if we do not. That would be absolute lunacy. On top of that—talk about sledgehammers cracking nuts—two people came down for half a day to go through all the paperwork of our policies on this and that, our P60s and P45s, and to examine the workforce that does not exist yet. It is lunacy. Is that a good use of government money? We must make this more sensible.

The briefing from the House of Lords Library was hugely useful. It contained many studies that showed the cultural and economic benefits of immigration. We in this Parliament should think strategically, leading the Executive to go the right way. The coalition has inherited a lunatic socialist idea of control. We need to put incentives like taxes in place in order to nurture creative talent. If we want to discourage people, we should change the benefit system, which we are doing. We must do something more positive to get out of the debt crisis than stopping talent from coming here.

My Lords, first I welcome this debate and congratulate the noble Baroness, Lady Valentine, both on her initiative in allowing us to debate this very important matter, and also on the quality of her contribution. It has been an impressive and wide-ranging debate and I very much look forward to the Minister’s response. Whether he, as a widely respected and humane internationalist, is looking forward quite so much to responding might be open to doubt. The debate has clearly exposed the illogicality and potential risk to the UK’s interests of the Government’s approach to immigration.

We all recognise that immigration is as challenging an area as is possible for any Government. Over the centuries, this country has experienced wave after wave of migrants, and we have benefited mightily from the commitment and talent of those people. We continue to do so. They have enriched our community, and the noble Baroness, Lady Valentine, and other noble Lords gave us some excellent examples of the benefit that migrants have brought to the United Kingdom. However, we must also recognise the pressures that immigration can bring to many of our own communities. That is why the previous Government committed themselves to an immigration system that both promoted and protected British values. We considered that people needed to know that immigration was controlled, that the rules were fair and firm and that there was support for communities that had to deal with change.

As a result of the action that we took, our borders are stronger than ever. The UK Border Agency has police-level power and thousands more immigration officers, and 100 per cent of visas are now biometric. We recognised the pressure that immigration can place on housing and public places in many communities, and we had planned to expand the Migration Impact Fund, paid for by contributions from migrants, to help local areas. We also know that migrants who are fluent in English are more likely to work and find it easier to integrate, so we took action to make the English test harder.

I know that the noble Earl, Lord Erroll, thought that those characteristics summed up a golden nirvana of controlled socialist planning. However, what is certain—as my noble friend Lord Giddens suggested—is that we can clearly see the progress that was made, with the reduction in net migration to the UK in the past year, with applications for asylum having dropped 30 per cent in the fourth quarter of 2009, with asylum claims now being a third of the level that they were in 2002, and with the cost of asylum claims supported by the taxpayer having been cut by half in the past six years.

We introduced the new points system to ensure that we got the migrants that the British economy needs. Our aim was gradually to tighten the criteria in line with the needs of the economy. However, we are very concerned about the arbitrary nature of the cap that the Government have now introduced. I ask the noble Lord to respond, because it appears that the cap is clearly designed to give the impression of new government action on immigration, when in reality the points system that my Government had established was dealing with the problem in a much more sensible way. More than 20 noble Lords have spoken in this debate and identified the fact that the Government have taken away the flexibility of the points-based system and brought about many of the problems that we have heard about in this debate.

The cap is clearly bad for business. Instead of clamping down on illegal immigration, the policy seems to be focusing on a minority of skilled migrants for whom employers can demonstrate a business case. According to the Government’s own forecasting models, a cap will impact on economic growth. If the Prime Minister were to achieve his pledge to bring down net immigration to the level of the 1990s, the estimates that I have seen suggest that output will be hit by as much as 1 per cent and cost the Exchequer £9 billion a year in forgone tax revenues by the end of the Parliament. No wonder we have heard quote after quote this afternoon from businesses and universities about this impact. Imperial College said that immigration changes were of great concern in respect of its ability to recruit and attract leading scientists and researchers to achieve its academic mission.

We have already heard about the London First perspective. There is concern among international companies that are based in London or have substantial operations here, which are operating in global talent markets and need to recruit employees with distinctive and perhaps unique skills and experience from across the globe, but which are inhibited from doing so because of the cap. The central issue for City of London businesses is the nature of the proposed cap on those non-EU workers who are skilled or highly skilled. They say that the arbitrary cap could exclude those individuals who bring tangible benefits to the UK and who do not displace existing British workers. These individuals could be investors, entrepreneurs or key staff of international firms here. My noble friend Lord Turnberg has a strong involvement with the Association of Medical Research Charities, which, in joint evidence with the Wellcome Trust and Universities UK, makes it clear that if we want the UK’s universities and research institutes to remain internationally competitive, continuing access to the best global talent and expertise will be critical. And so on.

The noble Lord, Lord Ryder, made an important point about the pharmaceutical industry. When I had responsibility for the industry, 2 per cent of global turnover in drugs and medicines was in the UK, but it was 10 per cent of global R&D. It is one of our most important and successful industries. It would be mad to put at risk the success of that industry. The noble Lord, Lord Newby, talked about the energy sector, another sector with which I have experience. Again, we have a very strong global centre based in the UK. How can we possibly put that at risk because of this arbitrary cap?

The noble Lord, Lord Lucas, made some mildly critical comments of the way in which the UK Border Agency conducted its affairs, particularly in relation to independent schools. I have no doubt that the agency will wish to look at that. He seemed to suggest that we should let in anyone who was going to an independent school. Given the 20 per cent cut in the budget of the UK Border Agency announced yesterday, perhaps that will have to be its policy in the future.

I hope that when the Minister sums up, he will be able to respond constructively to the debate. We are all aware of the comments of his right honourable friend Mr Vince Cable, the Business Secretary, who noted its impact on UK business only a few weeks ago. He said:

“The brutal fact is that the way the system is currently being applied is very damaging … If we are going to be an open economy”—

which I support strongly—

“thinking globally and acting globally, we have to be flexible in the way that we treat people of this kind”.

Finally, I should just like to inform the more than 20 speakers who have spoken in this debate and called on the Government to change their view that we will be debating on Monday a statutory instrument in my name which calls on the Government to change their policy. We will have an opportunity to put the views of this House to the test.

My Lords, let me start by saying that I had noticed next Monday’s business. I thank everyone who has taken part in this sometimes passionate debate and the noble Baroness, Lady Valentine, for opening it. As the noble Lord remarked, it is an uncomfortable position for a Liberal to have to defend limitations on immigration. Liberals believe in open societies, in an open global economy and in the principles of free trade and free movement of goods, capital, services and people. Sadly, however, we all recognise that such openness is not possible now or in the foreseeable future as far as the global free movement of people is concerned. We all recognise that that is where we are.

There are intense immigration pressures on the rich, secure and law-abiding world from bright, determined, or sometimes desperate, people in the poorer, insecure, more conflict-ridden countries of the world. There are pressures arising from global population growth, which is likely to continue for the next 20 or 30 years. There are pressures from those countries which are now producing many more graduates than they can absorb within their own economies, in the Middle East in particular. There are the natural desires of millions of individuals to better themselves or their families. Each of those might be a worthwhile cause on its own but, cumulatively, they are more than we or other developed democracies can cope with. There are also the global ambitions of the highly talented, of which many have spoken in this debate, in a global economy.

The response to this in all developed democracies has been to attempt to strike a balance between setting limits on immigration and allowing continued access for the talented, for the most desperate and for those who will contribute to and enrich our society and our economy. It is immensely difficult to design a fair and balanced immigration policy. Successive Governments have struggled with this objective for 50 years since the first restrictions on Commonwealth migration were imposed.

In the past 15 years, there has been a surge in net migration into this country. The ONS projects that the British population will rise to 70 million and beyond and that the driving force in that rise in population will be immigration and the children born to recent immigrants. That produces pressures on resources, housing, space and public facilities, above all in the south-east of England, which now rivals the Netherlands as the most densely populated part of Europe with a population density that is approaching the levels of Singapore. That in turn puts pressures on jobs, particularly competition for low-skilled and low-paid jobs. The noble Lord, Lord Judd, rightly remarked that often the poorer areas and the poorer people are most at risk from the pressures of immigration.

I must correct the noble Earl, Lord Erroll, a little about his impressions of what has happened with net migration. The Government’s figures for net migration in 2009 are that, of the net migration into and out of Britain of just under 200,000, the figures for those coming from the European Union and European economic area were roughly in balance. There were a mere 12,000 more returning British citizens and EU residents coming in, whereas there were 184,000 migrants from outside the European economic area. I should also say that, in terms of working and retirement, the noble Earl suggested that people would leave Britain and only come back to retire. The figures are that more than 2 million British citizens have retired elsewhere within the European Union—that may have something to do with the weather, of course. Indeed, we now have a substantial French colony in the south-east of England who have come here to work, but many of whom, anecdotally, have said to me that they will certainly go back to southern France when they retire. Britain is a good place to work and the diversity of our population—the very substantial French, American and Japanese communities in London—suggests that we are a very attractive place to work.

The noble Lord, Lord Giddens, asked me on behalf of the Government to reassure the House of their commitment to multiculturalism. We do so happily. I come from a party whose previous party president was the noble Lord, Lord Dholakia. I am now in coalition with a party whose chair is the noble Baroness, Lady Warsi. We live and work in a happily multicultural society, although we recognise the complexities of multicultural society and of societies that continue to undergo new waves of immigration. I am sure that I do not need to remind the noble Lord of Rob Putnam’s work on community and diversity and on the problem of solidarity that rapidly increasing diversity raises for communities.

I have certainly found from my own working and political life in Yorkshire and Lancashire that recently settled communities often feel threatened by further migration. I found that even 40 years ago when I was a candidate in Huddersfield. I still find it as I work in Bradford, Leeds and elsewhere. Many in the south Asian community in Bradford who are first-generation immigrants or the children of immigrants express active anxiety about the undercutting of their job opportunities and of their wage rates by Poles and Ukrainians. This is not simply a question of race or of ethnicity; there are some real, complex economic and social pressures, to which continuing immigration leads.

Our country has stubbornly high levels of unemployment. There are 2.5 million unemployed people in Britain, many of whom are long-term unemployed. Those are above all the low-skilled and those who have not entered apprenticeships or begun to pick up the skills that to take them into work, although we already have almost 200,000 recent graduates on our unemployment registers. Under the previous Government, too little investment was made in skills training or in apprenticeships, but as noble Lords know, my right honourable friend and colleague Vince Cable is actively concerned to increase the number of apprenticeships.

Part of the context of the debate, therefore, comes from popular suspicion and press stories—and some evidence—that companies find importing skills easier than paying for training and that immigrants competing for jobs drive down wages. Like the predecessor Government, we have attempted to respond. As the noble Lord, Lord Hunt, remarked, in 2008 the previous Government introduced the points-based system with its five tiers. A constant aim, as the noble Lord, Lord Bilimoria, suggested, of the Labour scheme as well as all previous schemes, has been to let in the right people and to keep out the wrong ones. That is a wonderful aim but it is not easy for any Government to apply in practice as we constantly rediscover how immensely difficult it is to discriminate between the many talented candidates, between the deserving and the very slightly less deserving whom one would nevertheless like to take on. There are so many promising and talented individuals—sadly, sometimes too many.

We all have our candidates as to how to get around the problem. The noble Baroness, Lady Valentine, suggested that we should put a further squeeze on bogus students and bogus colleges. The Government are trying to do that, as did the previous Government. Another suggestion is a tighter squeeze on illegals and on people smuggling. Again, the predecessor Government tried and we too are trying. That overlaps with the problems of human trafficking. We all recognise what a morally ambiguous policy quagmire we are all in as we attempt to manage immigration. There is no easy and perfect policy to adopt.

I recognise that this debate is largely focused on tiers 1 and 2 and on the application of the cap that is to be applied to those tiers. The interim cap was imposed to avoid a surge of applicants before the new system is introduced in April 2011. The reduction in the cap was of a matter of 1,300 places. There will be an annual cap, which is intended to reduce the steady rise in the British population. A very large number of anxieties and concerns have been expressed to the Government over its application, and I have read a great many submissions on what would happen and what could happen, but I have to say that there were not many on what has happened. The Government’s consultation received 3,500 responses, so we are involved in a continuing dialogue with all those concerned, including London First. We want the best for Britain’s society and economy, and we all recognise that we have to respond to changing international conditions and trends in migration as they move up and down. The Government are now responding to the consultation and we expect that response to be made public within the next few weeks.

The balance between tier 1 and tier 2 is one issue that we will discuss. The figures suggest that around 10 per cent of those who have come in under tier 1 are not currently employed and that a further 20 per cent are employed in lower-skilled occupations than those that they claimed to be pursuing when they came into the country, so there is a case for expanding tier 2 and shrinking tier 1. We recognise the problems of scientific research and of universities, which need to be able to attract the best people. I declare a small interest in that I have spent some time over the past two weeks trying to help my son get a renewal of his visa to move from being a student in the United States to holding a post-doctoral fellowship there, although I should say that the Haskel and Wallis report referred to by the noble Lord, Lord Turnberg, was not a reference to a member of my family.

We recognise also the concern that banks, accountants, law firms, engineering consultancies and others in the City have with regard to access to globally mobile people of different citizenship, as well as the whole question of the cultural world. I thank the noble Baroness, Lady Valentine, for her suggestions on how to find ways to pursue the dialogue further, and I thank her in particular for her suggestion on training and apprenticeships. That is something that the Government would very much like to take further. Again, I declare an interest in that for many years I was involved as an academic in training for Barclays bank. I recall the day on which a new CEO arrived and shrank very radically the bank’s training programme as a non-essential part of what the bank should do. We want to make sure that all the firms in the City with which we work are investing in their workforce and in those whom they recruit and are not tempted to take the easy option of recruiting people already trained by others abroad. That is cherry picking, as the noble Lord, Lord Judd, said. We should be contributing rather than simply taking talent out of other countries.

We recognise that internal company transfers are also an issue. Some 22,000 of the 36,000 admitted last year under tier 2 were inter-company transfers. Of those, 12,000 were Indian nationals and 11,000 were in IT. At the same time, IT is the area of graduate employment with the highest percentage of unemployed in this country. We need to look at this area and talk to companies and banks about how to ensure that our own graduates get into the right jobs. We need a wider dialogue with UK employers about investment in developing the skills of their employees and of those whom they recruit.

On cultural talent, we recognise that there is a continuing problem. They are listed under tier 5 and tier 2 as a particularly important area, and I ask simply that we continue to talk about individual cases as often as we can. On Rotary Youth Exchange, I enjoyed the argument between the noble Lord, Lord Lucas, and the noble Baroness, Lady Coussins, as to whether independent schools or the Rotary are more reliable partners for the UK Border Agency. I would say simply to the noble Baroness that perhaps we need to talk further about this, and that the understanding of school exchanges is that they are for separate terms or for six months, not for a year. Perhaps that is something about which we need to talk further.

The Home Office has taken a certain amount of flak, in particular from the noble Lord, Lord Lucas, about extraordinary bureaucracy at the UK Border Agency. This is not easy work. Officials, particularly in the Indian subcontinent and the Middle East, have to deal with a large number of determined and needy applicants. It does not always work out as easily as it should, and sometimes people have to be more patient than they would have wished. When I was a student going to the United States, I used to suffer in long lines. That is one of the problems of the world pressures of population and migration. There is popular anxiety about migration and it is not just populist exaggeration or tabloid scaremongering.

Often the highest anxiety is among our most disadvantaged and within our settled immigrant communities, but we are attempting to design the fairest compromise that we can. We have consulted and we are continuing to consult. We will announce policy priorities for 2010 and beyond in the coming weeks, and we look forward to a continuing dialogue with all interested partners, from London First to the Royal Opera House to the Institute of Cancer Research to Universities UK and beyond on how immigration policies can best be balanced. We are committed to an open society and an open economy within the limits that sadly we all have to accept.

My Lords, I thank everyone for their fascinating and multifaceted contributions to today’s debate and I hope that the Government will take account of the weight of opinion expressed. I thank the Minister specifically for his constructive reply on this thorny issue and I look forward to a continuing and constructive dialogue. It is critical to get this right.

I point the Home Office, again, towards the report of the Economic Affairs Committee of this House, which concluded that any immigration policy should have at its core the principle that existing UK residents should be better off as a result. I am afraid that capping tier 1 and tier 2 immigration will do the opposite. I encourage the Government to make clear that the policy that they are pursuing is in line with the outcomes that they seek.

Finally, I remind your Lordships that chicken tikka masala is Britain’s favourite dish. I beg leave to withdraw the Motion.

Motion withdrawn.