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International Science, Technology, Engineering and Mathematics Students (S&T Committee Report)

Volume 760: debated on Thursday 19 March 2015

Motion to Take Note

Moved by

That this House takes note of the report of the Science and Technology Committee on International Science, Technology, Engineering and Mathematics (STEM) students (4th Report, Session 2013–14, HL Paper 162).

My Lords, I declare two interests, first as principal of Jesus College, Oxford, where we have many international students, and secondly as chairman of Oxford Risk, a small-business spin-out of Oxford University that has an interest in recruiting the best talent from around the world.

I thank the members of the Science and Technology Select Committee for their excellent contributions to this inquiry, as well as our outstanding specialist adviser, Professor Sir William Wakeham, for his wise and expert advice and, of course, the committee clerk and policy analyst for their superb support. Noble Lords will be aware that this report is a historical throw-back to my time as chairman of the S&T Select Committee and I am pleased to note that it is the last of the reports under my chairmanship to be debated.

I also thank the noble Baroness the Minister for the Government’s response to our report, although I have to say that the response was a little less positive than we had hoped. We made nine recommendations, of which one was accepted unequivocally, four were rejected and four were considered, I suppose. I hope that at the end of the debate, the noble Baroness will bring us an update on the Government’s thinking.

I start by clarifying what it is we are talking about. Noble Lords will be aware that there is a broader debate about measures to reduce net migration into this country. Our inquiry falls within that broader context. We looked, in particular, at undergraduate and postgraduate students from outside the UK and European Union, referred to either as overseas students or international students, coming to this country, or not, to study science, technology, engineering and mathematics—STEM subjects, as they are commonly known. We were particularly concerned with what we called “hard STEM subjects”, such as physics, maths, chemistry, engineering, computer sciences, medicine and biology, rather than the softer subjects that come under the broad heading of STEM used by the Higher Education Statistics Agency and which include courses such as architecture, building and planning, forensic science and equine studies.

When we think about students who are studying what we called “hard STEM subjects”, the first point to note is that we have a national skills shortage. The CBI estimates that 43% of employers have recruitment difficulties with STEM graduates and that, in order to fill the requirements of industry, the number of graduates will have to rise by 40% from today’s levels. Similarly, the Social Market Foundation has proposed that we need an extra 40,000 STEM graduates per year up to 2020. Another metric is the shortage of physics teachers in state schools. It is estimated that more than 500 state schools have no qualified physics teacher at all and that there is an overall national shortage of about 4,000 physics teachers. If we are to develop the high-tech, science-based economy that was referred to in yesterday’s Budget, we need to be able to educate and employ more STEM graduates.

International STEM graduates are a very important part of the higher education ecosystem. In total, there are between 50,000 and 60,000 international STEM students in the UK, if we include both undergraduate and postgraduate. Some university courses are hugely dependent on international students for their sustainability. For instance, almost half of those enrolled on taught master’s courses in computing and engineering come from outside the UK and the European Union.

In spite of our dependence on international students both in our educational system and for employment in our science and engineering industries, it seems that our ability to attract international STEM students is declining relative to our competitors. The question we asked in our inquiry was whether this decline, which started about five years ago, has been caused at least in part by the serial changes to immigration policies that have been introduced since 2010 as part of the Government’s aim of cutting net migration. Before 2010, the number of so-called hard STEM students from overseas was steadily increasing year on year, but since then the overall number has not increased, and in some cases there have been dramatic declines.

The picture is not uniform across subjects, across courses and across countries of origin. I will not go through all the detail of the figures we were given by BIS, but suffice it to say that the most dramatic decline post 2010 is in students coming from the Indian subcontinent. Indian student numbers declined from around 12,000 to 5,000 over the two years post 2010, while other countries, notably China, have continued to show an increase. Looking at subjects and kinds of course, the biggest declines within subjects are in engineering, computer science and subjects allied to medicine like optometry and pharmacology, and that is true whether looking at undergraduate numbers or those taking postgraduate taught master’s degrees. There has been no discernible trend towards a decline in the number of students studying for PhD degrees—research students—but the numbers here are in any case relatively small. The decline in particular subjects and courses may actually be linked to the decline in geographical origin because many Indian students who used to come here would study the subjects in which there has been a marked decline in overall intake.

The question is this: what has caused these changes? Is the correlation between the decline or levelling off in some areas and the introduction of changes to the Immigration Rules for students sufficient for us to infer causation? The problem with interpreting the trends is that, of course, we do not have the counterfactual; we do not know what would have happened had there not been any changes to the Immigration Rules. Would the increase in students from China have been even steeper? Would India have continued to rise instead of falling? We were told by officials from BIS that other factors may have influenced the trends. They mentioned, for example, exchange rate fluctuations, particularly the fall in the value of the rupee, and they also referred to more aggressive marketing and recruitment by our major competitors such as Australia, the USA, Canada, Singapore and other EU countries. But while we saw a 42% decrease in Indian students between 2010 and 2012, Germany and Canada both saw an increase, and the USA had a mere 7% decrease. Since the fall in the value of the rupee would surely have affected these countries too, it would appear that exchange rate fluctuations cannot be the whole story.

A report published last month by the British Council draws on the figures from the Higher Education Statistics Agency. It highlights how we are losing out to our competitors. Our market share of international students globally—not just in STEM, it has to be said—has fallen over the past four years by more than 4% and there is no sign of that decline slowing down. So in spite of our natural advantages—the English language and our global connections through the Commonwealth—our competitors seem to be eroding our market share. This is bad news for universities and for the much-needed skills that I have already referred to which international STEM students could bring to our industries, not to mention the soft power effect of building relationships with other countries for the future.

We cannot be absolutely sure what has caused the slow-down and in some cases the decline in the arrival of international students, but the circumstantial evidence we heard suggests very strongly that government policies on immigration have played a significant role in preventing STEM students from coming here to study and work. I will not attempt to speculate whether this was the Government’s intention, but we know from the Statement made in another place by the Home Secretary in March 2011 that the aim of the changes to which I am about to refer was to reduce net migration and,

“to return some … sense to our student visa system”.—[Official Report, Commons, 22/3/11; col. 856.]

So there probably was some element of intent in that.

To summarise the evidence, we heard about three kinds of factors that might be putting off students from outside the European Union coming to this country. The first is perception, the second is bureaucracy, and the third is specific barriers. I shall say a little about each of those.

On perception, as a result of the changes that started in 2010, some overseas students appear to have got the message that the UK does not welcome them. That is great news for our competitors. I know that the Prime Minister and the former Minister with responsibility for science, David Willetts, have gone to great efforts, including travelling to India, to say that the UK is open for business and welcomes international students. But once confidence has been eroded, it is not easy to rebuild it, and I think that more work needs to be done. Although the numbers are very small, my own informal survey of international students at Oxford University tells me that there is still a perception in India and elsewhere that the UK is less welcoming than it used to be.

On bureaucracy, we heard in our evidence that the frequent changes in immigration policy—it was not just a one-off; many things have changed since 2010—and the bureaucracy associated with applying for visas is off-putting to potential students.

On both those issues, the Government in their response appeared to be pretty well satisfied with the current situation. However, I would like to ask the Minister whether the Government have done any research to ascertain the perceptions of students themselves, both those who choose to come to the UK and those who considered coming here and have gone elsewhere. In a moment, I will refer to such a survey carried out by an independent body. I think that market research of that kind might help as a reality check to see where we are.

I turn now to some specific barriers. The first thing to say about the evidence that we heard is that the cost of a student visa to come here is higher than in eight out of nine competitor countries for which we have evidence. The sums of money may not be huge—they are in the order of tens to hundreds of pounds—but the implicit signal is clear: we want to make it more difficult to come here, through what we will charge you for a visa, than some of our competitors do. I think that that is a continuing problem.

Perhaps the most important barrier that we heard about is the change in the rules allowing students to stay on and work after they have qualified. Some, perhaps many, international STEM students, having qualified in a UK university, would like to stay on and work. This is surely a good thing, given that we have trained and educated them to provide the skills that our industry desperately needs. You would think it a no-brainer that we would want to try to persuade them to stay here.

Under the old arrangements, prior to 2012, the so-called post-study work route entitled international students to stay on and work for up to two years before applying for a tier 2 skilled worker visa if they had a job. In 2012, the post-study work route was abolished and replaced with a new scheme in which students have a mere four months to find a job, not after they have graduated but after they finish their course, and have to have a salary, which is today more than £20,500, to apply for a visa. We heard that this is a major deterrent to overseas students coming here. Our time limit of four months is shorter than in any other English-speaking or EU competitor country. For instance, Germany has a period of 18 months; the USA, 29 months after STEM graduates finish the course; and Australia, depending on the course and the circumstances, has a period of between 18 months and four years.

Look at the numbers. In the year before the old tier 1 post-study route was abolished, just under 35,000 visas were issued. In 2013, under the new tier 2 “general” route, only 4,175 visas were issued. That is an 88% drop in one year. We heard abundant evidence that the current arrangements are not only bad for UK universities but bad for UK business. One of our witnesses, Sir Andrew Witty, the chief executive of GlaxoSmithKline, told us that the new arrangements are “not great for employers” and that students have,

“vanishingly small amounts of time”,

to secure a job. As I said, the four-month clock starts ticking as soon as they finish their course, which may be many weeks ahead of the time that they receive their degree or final qualification, especially if it is a Masters degree with an element of a viva. The time that they have after they know their qualification to complete a visa application and job application is vanishingly small, as Sir Andrew says.

The Engineering Employers Federation also commented to us on the difficulties of the new arrangements, particularly for businesses that need to get a sponsorship licence. As I declared at the beginning, I am chairman of a small business. This morning we discussed there the fact that the UKVI guidance book that we must study if we want to get a sponsorship licence is a mere 144 pages long. We are not making life easy for small businesses to hire skilled STEM graduates from overseas. Would the Minister agree that our evidence from industrial employers shows that the current arrangements are really not fit for purpose? Why should the Government ignore the comments of those working hard to build a UK science-based economy?

Furthermore, an independent survey carried out by Hobsons of 70,000 prospective international students who made inquiries to UK universities between March 2011 and 2013 demonstrated that perceptions of visa restrictions, including the post-study work route, were a major deterrent to students coming to this country from overseas.

Let me end with, very briefly, two individual case histories that both relate to my college at Oxford, Jesus College. One student who gave written evidence to the committee is a Canadian citizen who studied medicine at King’s College London before coming to Oxford for further specialist training. She went back to Canada briefly to complete Canadian medical exams in case at some point in her career she wanted to practise there, but she wanted to come back and work in the NHS. However, in the brief period she was away, the rules changed and she was told that she was no longer eligible for further medical training in the UK. It seems to be madness for us to invest years in training a doctor and then tell her that she cannot come and work here.

My other case history is a Chinese engineering graduate from Jesus College who set up her own company, Oxford Space Structures, which is building consumer products as a spin-out of the European Space Agency’s research. Apparently, her company’s product is a lightweight travel cot based on technology developed for satellites—I look forward to buying one for my brand-new granddaughter, who arrived last Saturday. The BBC covered the story two weeks ago under the banner headline, “The global fight to attract foreign entrepreneurs”. It seems like a good news story, and indeed it is. However, when I clicked on the link to the UKTI Sirius scheme, under which the Chinese engineer was able to set up her business and which is designed to attract such entrepreneurs, I read that it is currently closed. Does UKTI have future plans for attracting overseas entrepreneurs if the Sirius scheme is now closed?

I could make a number of further comments about our report, but I prefer to hear what other noble Lords have to say. I just end by noting that our report is by no means alone in highlighting the problems to which I have alluded. In 2011, the Home Affairs Select Committee in another place advised against the closure of the post-study work route. Just last month, the All-Party Parliamentary Group on Migration published a report that reached a very similar conclusion to ours, based—as was our report—on a substantial volume of evidence from universities, students and employers. I beg to move.

My Lords, the whole House will be grateful to the noble Lord, Lord Krebs. He speaks with great experience about these matters, as we have just heard. He has chaired the Science and Technology Committee for some time. I was very privileged to serve with him and to succeed him. We are enormously grateful for the way he introduced this report. I was particularly taken by the case histories he mentioned from Jesus College. I cannot, alas, from my own background quote such specific examples but I am absolutely certain that it is only when we get to the detail of some of these astonishing cases that we realise that at the moment we seem to muddle our way into making life difficult for the very students we wish to attract. Before I start my main observations, perhaps I may say also how much I am looking forward to the maiden speech of the noble Earl, Lord Kinnoull.

There are two government policies that are both perfectly worthy but are proving difficult to reconcile. The first is to increase numbers of international students and the second is to deal with the historic abuses which certainly happened in the international student visa system. If we are to deliver what the Budget set out yesterday, which is a competitive economy, we simply must attract students to our world-class universities in competition with other world-class universities in competing economies. That, I am certain, is universally accepted. We have to look at how successful we are in that, the first and most important of the Government’s policies. We know that our economy’s success in creating employment will depend on an industrial strategy of building on existing strengths. For example, I could mention healthcare, aerospace, biotechnology, renewable energy, the automotive sector and many more. They are often multidisciplinary, with an interaction between chemistry, biology, medicine, engineering and much else. We will need to attract inward investment, which will come when those who have the inclination to invest are persuaded that the quality of the science and engineering is the highest, and that a reservoir of skilled persons is available to drive that knowledge economy.

We have a skills shortage. The noble Lord, Lord Krebs, mentioned the figures issued by the CBI. Employers throughout the country are struggling to meet demand, particularly for engineers, but for other skilled graduates in the science and technology sectors. The number of UK-based engineering students over the past 10 years has risen a little, but very disappointingly, from 12,700 in 2004 to 13,700—an increase of 1,000 over four years. The number of non-EU international engineering students increased by much more, by about 70% from 3,200 to 5,500. The Institution of Engineering and Technology estimates that to meet demand from employers we need 87,000 new engineers per year. Even if the Government do not accept that figure—which I accept may be special pleading—I think we all recognise just how dire the shortage can be in those specialist skills areas. Sir James Dyson, who has advised the Conservative Party on these matters, recently stated in an article in the Guardian:

“But I do worry about Britain’s ability to make, make, make. Make engineering breakthroughs. Make scientific progress. And, yes, make money for UK plc”.

I think that sums up what an awful lot of captains of industry would say and the evidence that the committee heard. We need to attract more of our UK students into STEM subjects, we need to attract more international STEM students and we need to attract more highly qualified scientists and engineers, even if they have not done their research training and graduate or postgraduate studies here, to make up our numbers.

That brings me to the second government policy, which is proving incompatible with the first: the policy of tightening procedures and qualifications for student visas. We have heard about the added complexity, cost and bureaucracy and the perception, particularly in India and Pakistan, that once you have graduated you are no longer welcome. Some pretty lurid headlines in the Indian papers said just that. I give credit to the Prime Minister, to David Willetts, and to other Ministers who had the thankless job of trying to reverse that perception but, as the noble Lord, Lord Krebs, said, once the perception gains currency it takes an awful lot of hard work to reverse it.

We must acknowledge that there has been historic abuse of student visas by some institutions that I would call marginal. In the past, there has been a danger of international graduates, once they finished their studies and decided to stay in this country, taking jobs for which they were overqualified—unskilled jobs—therefore increasing the competition for jobs for our nationals. These issues need addressing. Clearly, you need to make sure that, having trained people for skilled jobs, they take on the skilled jobs. It is important that we do not allow such abuses, but we must not try to deal with these problems at the expense of jeopardising that overriding national need to equip ourselves with a competitive knowledge economy.

The Government said in response to our committee’s report:

“There have been a number of myths and inaccurate perceptions, which we are determined to correct, in partnership with the sector who also have an important role to play in this”.

I hope my noble friend the Minister will concede that the well documented examples in the report of added costs and complexity which have fallen on students, the higher education sector and employers amount to more than myths and inaccurate perceptions, although there are indeed those as well. The abuses certainly needed tackling but, equally, genuine students deserved a better visa service than they were receiving in some of the instances on which we took evidence. I acknowledge that since our report there have been some improvements, although it will take years for some of these perceptions, however ill founded, to be redressed.

An example of the complexity which the Government have imposed on the system is the tier 5 route, for people who want to come to the United Kingdom for a short period to do work experience, training, research or a fellowship through an approved, government-authorised exchange scheme. As paragraph 106 of our report said:

“The University of Manchester described the Tier 5 route as ‘unpopular with both our students and employers … We are not familiar with any students actually taking a Tier 5 experience at Manchester’”.

If the Home Office really sought to work in partnership with universities to implement a reformed student visa regime—as the Government’s response suggested and as I am sure it does—it would surely have been much more productive to have worked closely with the sector in designing measures which were effective, fit for purpose, less complex and, above all, did not need changing rapidly and repeatedly at short notice. It would also have been desirable, if possible, to have a scheme which would be less expensive for students.

The Government remain determined to cling to a net migration target that includes students as its largest component. They plead the need to comply with UN regulations. The United States also includes students in its overall migration figures and then excludes them for migration policy purposes. This would also have been the sensible way for us to proceed. As international student numbers grow, the United States has no inducement to limit their share of this expanding market. While we insist on including students in the national migration targets, we will be conflicted and remain so until international student numbers level off or decline. The huge public benefit derived from international students coming to Britain will be compromised.

My Lords, it is an honour and a privilege to rise for the first time in your Lordships’ House. In the last weeks, I have been much touched by the warmth of Members of the House, many of whom have been generous of their time and canny in their advice. I would particularly like to cite the noble Lords, Lord Laming and Lord Aberdare.

I am also grateful for the staff of the House who have helped me in very many ways. I have discovered one thing—that there is finally something for which there is no iPad app: that is, of course, navigation around your Lordships’ House. Like every other new Peer I have been lost frequently but, always with good humour and a smile, put back on the right road. I dare say that for some moons to come, they will be doing the same.

I congratulate the noble Lord, Lord Krebs, and his committee on their report. Its clarity, its appealing logic and the good body of evidence it assembled in its recommendations were a cracking read. I would like to add a very few thoughts to it, because it was settled roughly a year ago.

My first thought can be summarised in the proposition that British international business needs the international STEM student product. Here I declare an interest: I have worked for more than 25 years in British international business and for a very large number of years in senior levels at the Hiscox insurance group, in which I declare a financial interest, as I do in Schroders plc. International business naturally likes STEM graduates. They are numerate, flexible-minded and well trained. If we like them, we like the international STEM graduates even more, because they bring with them the two additional dimensions of knowledge of another culture and, one hopes, linguistic skills. When put together in a team trying to win business internationally, having a balance in the availability of all of those features is something which often, in my experience, makes the difference between success and lack of success.

It has been marvellous for all the British international businesses to be able to participate in the annual milk rounds around the various universities to attract the best and the brightest and to try to sell our businesses and the excitement of doing things in our businesses to those students. Anything that reduces the availability of the pot of good students is something which is not in the interests of British international business. I put it to the Minister that, in consideration of the matters considered in this report, the interests of British international business should always be borne in mind.

I decided to do a little private update to see what it was like in the front line; it was a very limited exercise. I contacted the department of chemistry at Oxford. I should declare another interest in that in the 1980s, for four very happy years, including a year in research, I studied chemistry there. The department was very helpful and sent me an enormous lot of comment and figures, most of which I have sent straight on to the secretary of the committee in the hope that, when the committee returns to the subject—as I very much hope it will—it will be of some help to it.

I would like to bring to your Lordships’ attention three things that came out of that exercise. First, my own fiddling around with the statistics showed something pretty interesting to me about the chemistry department, which is that, roughly speaking, half the chemistry product at Oxford—both graduate and undergraduate—goes into business. The second thing I was not expecting at all, as it did not arise out of any of the questions I had asked. It came from an unsolicited email from Lucy Erickson, an international STEM graduate, who was my conduit at the department of chemistry. It was through her that I was contacting quite a large number of people. I think your Lordships should hear her words:

“I am an international alumna (Canadian) and graduated from Oxford in 2011. I’ve been working in Oxford since then and have seen many contemporaries struggle with visas.

I was lucky enough to get a Tier 1 Post-study Work Visa after my degree, which allowed me to stay and job hunt in the UK for two years.

However, after I finished, the post-study work visa was abolished. This had a huge negative effect on my colleagues who graduated after 2012—it was a real struggle for people to find sponsored work in just 6 months.

For example, two of my close friends were forced to leave the UK and move back to America when they were desperate to stay here. Those are just two examples but I know of many other people who were affected negatively by the change”.

I must say—slipping back on the British international business hat—that I find it very disappointing that we were not able to get access at least to try to attract those obviously high-potential graduates into our world.

British international business tends to operate on an annual recruitment basis. It is simply not practical to run induction and training programmes more than, say, once a year. If one is doing that, it takes several months to run a process from the opening of applications to the awarding of jobs. One is therefore looking, in the interests of British international business, for STEM students to be allowed to stay in the country for at least 15 months. I will come shortly to a practical suggestion about how that might be addressed.

I suppose that, net, that is slightly bad news. However, something that is, net, very good news came out of my mini-survey—and this is the third and final point on that. It was an email from the careers service team at Oxford University which states:

“While the lack of post study work opportunities has caused concern, the new ‘Tier 1 Graduate Entrepreneurship Visa (GEV)’ has enabled Oxford to endorse 40 international graduate students to stay in the UK with their new business ideas and the scheme has been very positive”.

I was not really aware of that scheme, but I am now. In further questioning, it turned out that more than half those 40 students were STEM students. When I looked at the high-level summaries of the business ideas, I was most impressed. However, there was a mild warning gong. It turned out that Oxford had the impression that only 135 GEVs have been issued so far. If that is the case, Oxford has a market share—if that is the right expression—of rather more than 25%, which suggests that the GEV is possibly not well enough understood or not well enough known about by a large number of other higher education institutions in the United Kingdom. I am coming on to a practical suggestion about how that should be looked into as a matter of urgency.

I realise that touching on anything to do with immigration at the moment is, at the very least, a warm potato, but I put it to the Minister that she would be able to instruct officials during the election break to look at the two issues I have raised and to see whether it would be possible to raise the post-study work time allowed to international STEM students from four months to the minimum of 15 months that I suggested, and how to do it; and to look at the GEV point I have made to see whether there is anything in that. Officials could be asked to report back by mid-June so that the report arrives absolutely fresh on the desk of the new government Minister, who would then be able to consider the findings and act accordingly and rapidly.

My Lords, we must congratulate the noble Earl, Lord Kinnoull, on a most interesting and engaging maiden speech, which conveyed some important and compelling evidence. His speech is a contribution to a debate on a most important issue in which, remarkably, three earls are speaking. The noble Earl, Lord Kinnoull, trained and practised as a lawyer and has spent 25 years in the insurance industry. We have just learnt that he is also a chemistry graduate. He will bring significant professional expertise to the deliberations of this House, and we can look forward to his well informed contributions in the course of what he has promised will be his regular and diligent attendance.

The excellent report of the Science and Technology Select Committee, which we are debating today, was published in April 2014. Since then, almost a year has passed, during which time the policies that the report wishes to see amended have been inflicting severe damage on our universities. The problems that the report instances have arisen from measures that have been enacted in response to an unguarded declaration of the Prime Minster concerning the number of immigrants to the UK. In a speech in March 2013, the Prime Minister declared that net migration needs to come down from hundreds of thousands per year to just tens of thousands. It seems that no serious thought had been given, in advance of the statement, to how this objective might be achieved.

In one unguarded moment the Government became hostage to the right wing of their own party. They suffered acute embarrassment at the failure to come anywhere near to achieving the declared target. They have handed ammunition to another party, which in contrast to the leadership of the Conservatives, is strongly opposed to our membership of the European Union, which allows citizens to migrate freely within its territories. The ineptitude in that connection is staggering, or at least it would be so had we not witnessed other, similar instances of such extemporary and troublesome policy declarations. The collateral damage that has been inflicted on the universities by an attempt to staunch the flow of immigrants in fulfilment of the policy has been immense.

To understand how foolish was the statement concerning net migration, one need only glance at table 1 of the committee’s report, which shows that in 2012-13 the total number of immigrants, which was roughly 500,000, was divided almost equally between immigrants from the European Union and from elsewhere. Short of leaving the Union, the Government can exercise no control over the numbers of European immigrants. Unless those people can be disbarred from coming to the country, there is no way in which net migration can be reduced to the tens of thousands. When we look at the figures for non-EU immigrants, we find that in the year in question nearly 170,000 out of 240,000 immigrants were entrants to courses at publicly funded higher education institutions. That is a fraction in excess of two-thirds. It is only by radically reducing those numbers that any significant reduction in net migration could be achieved.

In providing courses to overseas students, the university sector constitutes a major export industry. It appears that the Government have been prepared to curtail those valuable activities of the sector solely for the purpose of saving themselves the embarrassment of a failing political agenda that has arisen from a foolishly unguarded statement.

The committee’s report has urged the Government to remove students from the net migration figures. That was also urged upon the Government, almost unanimously, by those who participated in a previous debate on higher education. However, the Government have been intransigent on this point. By removing student migrants from the total, the Government could surely cut the numbers of recorded immigrants at a stroke. Their unwillingness to do so is almost incomprehensible. The only conceivable reason for not doing so is that by removing the students from the figures the Government would be denying themselves a valued opportunity to show that their policies are having an effect on the numbers of immigrants.

It may be that the Government have begun to believe their own propaganda. They may be imagining that, contrary to all the evidence, many of the non-European Union students are intent on exploiting the opportunity to come to the UK as a means of gaining permanent residence or of neglecting their studies in order to exploit other opportunities. The few instances when that has been the case have been widely publicised in support of a highly erroneous perception.

The supposition that a large proportion of the students have fraudulent intentions goes some way towards explaining the nature of the numerous additional provisions and restrictions that have been imposed upon overseas students. The conditions of the tier 4 student visas have been made increasingly stringent. The rules regarding the funds for their maintenance and for paying their university fees, which the students must have in their bank account if they are to be allowed to join a course, are now disbarring many of them. Perhaps the greatest discouragement to prospective students has been the way in which the routes to post-study work, which is so valuable to postgraduate and doctoral students, have been closed.

The increasing burden of regulations has been administered in a careless way. Changes in the regulations have occurred without sufficient prior announcement to allow the institutions of higher education to adapt to them. They have often occurred midway in the cycle of student recruitment, which has created severe difficulties for the institutions.

The rule changes have also had very distressing impacts on individual students, who have discovered that the suppositions under which they embarked on their courses are no longer valid. Thus, for example, the work experience components that may have been an attractive feature of many courses have, in certain instances, ceased to be available at a midway point in the course, in consequence of the new regulations.

One applicant to a doctoral program, with whose case I am well acquainted, was subjected to a test of his competence in the English language. This person originates in one of the central Asian republics. His written English is superb but his spoken English is hesitant and strongly accented in consequence of his lack of practice. On these grounds, he has been disbarred from pursuing his doctoral studies in the UK under the supervision of one of my academic colleagues.

I must now respond to the fact that the committee’s report is devoted primarily to the impact of the immigration regulations on the recruitment of students in science, technology, engineering and mathematics. A large proportion of these students are at the postgraduate level pursuing masters or doctoral studies. In their absence, many of our MSc courses would not be viable and would have to close. In effect, we depend upon overseas students for the maintenance of our scientific and technological skills. We shall continue to do so until a scientific and technological revival in the UK allows us to fill our courses with native students. For this purpose, we should need to provide adequate funding for our postgraduate students.

I should take the opportunity now of drawing attention to the fact that we are failing to produce sufficient numbers of scientists, technologists and mathematicians to staff our universities. A cursory glance at the staff list within academic departments will reveal that the majority of them are non-native. In the past, we have been able to celebrate the fact that our academic staff have been drawn from many other nations. We have had a genius for converting such people into British citizens with strong allegiances to this country, from whom we have profited greatly. Such circumstances no longer prevail.

Nowadays, the numerous overseas recruits to our university departments are typically short-stay visitors. In some academic departments, in my experience, a staff turnover of as much as 30% per annum is not unusual. If such circumstances are to continue, and there is no indication that they will not do so, then the effect upon the quality of higher education in the UK and upon our scientific research capacity will be dire.

It is typical when discussing in this Chamber the circumstances of UK higher education to hear fulsome assertions regarding its outstanding quality and world-beating status. Such assertions usually come from people who are only tenuously connected to higher education. They relate to past glories and to their lingering effects. The view from inside could not be more different; and the well informed prognosis for higher education in the UK is a grim one, which foresees a terminal decline.

I thank the noble Lord, Lord Krebs, for chairing this study, and for his comprehensive speech. I echo his thanks to the staff of the committee, and I declare an interest as a member of Cambridge University.

We must be aware that overseas students display huge diversity in interests as well as nationality. The bulk of them are doing undergraduate degrees, but those doing masters or doctoral degrees tend to be a larger proportion of all students in those categories. We are in an international market for talent in which our strong higher education system ought to give us an edge. My concern is that the various obstacles being put in the way are preventing us from achieving our potential.

The most insistent theme of our committee’s evidence was the general regret at the removal of the post-study work visa scheme in 2012 and unease with the more stringent and vexatious requirements that have replaced it. As the noble Lord, Lord Krebs, has said, a specially compelling witness was Sir Andrew Witty. He came as chancellor of Nottingham University but spoke with the authority of a chief executive of a major company, GSK. He noted, with regard to the four-month limit, that the clock starts when the students finish their course, not when they formally graduate. This puts them under even greater time pressure in seeking a job. Some try and fail, but too many are less confident: they assume failure and do not even try. Sir Andrew recommended a year from finishing the degree, which might then obviate the need for the specific entrepreneurial route. In the US, for instance, students are given a five-year visa for a four-year course, which makes it possible to gain work experience without hassle. Germany offers 18 months.

It was pointed out, particularly in evidence from Leicester University, that for students from India or Pakistan the work experience is perceived as a highly valued supplement to one-year master’s courses. Let us not forget what a huge investment in rupees Indian students make and how life-changing their experience here can be. The decline in perceived opportunities tilts the balance, in their minds, in favour of the US, Canada and elsewhere. Of course, such perceptions feed back to India and weaken the field applying here in future years.

Another issue that we raised is the salary threshold of £20,700. The Government’s response was that this was not too high and that its purpose was to prevent people staying on in unskilled occupations. However, we were told in evidence that new graduates in a subject such as pharmacy, without professional accreditation, would not get an offer at that level, but they would get lower-paid jobs offering the kind of valuable experience that would help them and convince them that they had made the right decision coming here. In fact, a similar concern was expressed recently in a radio interview with no less an authority than David Willetts, who pointed out that the threshold salary may be appropriate for London but is not so easy to achieve in the Midlands or the north of England, and so has the effect of sucking overseas graduates into the south-east. He suggested that there should be flexibility, with rather lower wage requirements in other parts of the country. Technical jobs paying less are genuinely valuable work experience—certainly not the same as unskilled work. The potential of such work is part of the package that allows students from India and Pakistan to get good value from the sacrifices that they make to come here.

A further impediment is that employers, especially in SMEs, continue to perceive complexity in the current rules for becoming sponsors. This was clear from the evidence, despite the official claims that it takes only 30 minutes to do so. The doctorate extension scheme is welcome, but again there were concerns that the application was not straightforward because the application has to be made no more than 60 days before the uncertain completion date of a PhD.

Subsequent to our report, further measures have been introduced by the Immigration Act 2014. These need to be carefully monitored. For instance, the NHS surcharge will increase application fees significantly. For a PhD student on a four-year course, visa and associated costs will increase from £310 to around £1,000, with the same amount for each dependant. The pilot scheme in the West Midlands for immigration checks by landlords would need thorough assessment before any decision was made to roll out the requirement nationally. There is a risk that it will deter landlords from renting to overseas students, especially in university cities where accommodation is already scarce.

The Government did not accept our committee’s recommendation for a biennial review to monitor the impact of frequent policy changes such as these, which are widely reported overseas and fuel the perception of the UK as inconsistent and unwelcoming to international students. Universities would like a period of stability, not only for their planning purposes but because it would give confidence to potential applicants. Of course, there was huge relief in January when there was no follow-through on the Home Secretary’s proposal to abolish even the four-month grace period, but the fact that this was prominently floated will surely in itself have deterred some applicants this year.

Many are perplexed at the Government’s reluctance to distinguish in their public pronouncements and policy between students and other immigrants—something that has been urged by several other committees apart than our own. Students are a substantial fraction of non-EU arrivals. As we know, the Government are being pressured about the gap between their 100,000 target and the three-times higher reality. It seems baffling that they are not eager to highlight the distinction and thereby at least blunt the manifest contradiction between the rhetoric from the Home Office and that from BIS. Perhaps the Minister could clarify that.

There is a growing worldwide demand for young people with STEM qualifications, and indeed with expertise in other fields of learning. As has been said, our universities are especially well placed to attract students at all levels: undergraduates, those who seek the professional development that a taught master’s course provides, and those seeking PhDs. In the competition for talent, our traditional rivals have been the US, Canada and Australia, but mainland Europe is more attractive now to students, especially from Asia, because courses are also offered in English.

We should surely also prepare for the disruptive effects of distance learning. So-called massive, open, online courses—MOOCs for short—have perhaps been overhyped, but they have their greatest potential at the level of vocational master’s courses, especially in subjects that do not require laboratory work. These MOOCs offer the UK an opportunity; the Open University especially has a real chance to excel in marketing this kind of distance learning. Its downside will be that as online courses develop, expensive residential courses in the UK will lose their allure unless enhanced by the genuine prospect of work experience, which requires relaxing visa regulations.

It may not be easy, even with optimum policies, to sustain the level of foreign students, the best of whom are surely an asset who should be welcomed and encouraged to stay. That is why we must surely avoid the own goals stemming from erratic and burdensome regulations. Foreign students who stay enhance our talent pool; those who return can forge links with this country that enhance our soft power. Overseas students should be welcomed—their paths should be smooth.

My Lords, all of us will be grateful to the noble Lord, Lord Krebs, for introducing this debate. We have also heard from the noble Earl, Lord Kinnoull, in what was an excellent maiden speech. The House is very fortunate that he has joined us and to be able to look forward to his future contributions.

To attract here students of these subjects, in particular those from overseas, I would like to make a few brief points. There is an obvious need: to increase foreign student numbers which have been declining; to make them feel welcome and thus also, in the first place, to simplify their process of application for entry; to encourage them to stay to find employment with UK businesses and industry; for proper monitoring of our policies and assessments of their results—these to be viewed against those of our competitor countries; and for our Government to be alert to other associated and constructive expedients—for science, technology and mathematics not least would such include the considerable scope, to mutual advantage, for student exchanges between United Kingdom institutions and those elsewhere.

The noble Lord, Lord Krebs, mentioned falling numbers; my noble friend the Minister may point out that there has been a slight recovery. This can be noticed in recent figures for Indian students coming here. There have also been useful government missions to build up trade and investment between the United Kingdom and India. That apart, there is still a much reduced number of students coming here from India and other states.

Several aspects may put off foreign students, and each of these is in our power to change. There is a need for greater clarity in the publication of immigration statistics. So far, our presentations do not sufficiently distinguish student figures from those of all other immigrants. This category is overseas students in possession of tier 4 visas. Does my noble friend the Minister agree that clear publication of their numbers as a separate immigration component would achieve two purposes: first, the removal of a government policy anomaly, where a Government restrict general immigration on one hand yet seek to increase student immigration on the other; and, secondly, that it would serve to help reverse the impression of many potential overseas students, to which many of your Lordships have referred, that they are unwelcome in the United Kingdom?

Foreign students are discouraged as well by unnecessary remaining complications within the application process itself. There is a strong case, therefore, for its simplification and streamlining, and the Select Committee has recommended that. Might the Government perhaps pursue this recommendation?

The Government have introduced a scheme for foreign students to stay on as graduate entrepreneurs. This is to be welcomed. It also connects to arrangements for students to complete PhDs and for corporate interns. Nevertheless, as the noble Lord, Lord Krebs, and others have stressed, the Select Committee has expressed much concern about the government scheme that has replaced it, named post-study work. It recommends that the Government should reinstate the latter. Does my noble friend concur that, if combined, the PSW and graduate entrepreneurs scheme together would send out a very positive message? Thereby, foreign students would have much greater opportunity than they do now to prolong their studies and to take up employment with United Kingdom business and industry.

We also need frequent reviews of the effect of policies and of how our results compare with those of competitor countries. Does my noble friend support this? If so, might the Government introduce those constructive procedures for monitoring and assessments? Whether in the humanities or sciences, the pursuit of opportunities for student exchange is always worth while and to the advantage of all. It also reflects a paradox. In this case, it demonstrates how co-operation transcends competition while still retaining all the benefits of the latter. That comes from academic exchange and working synergies between universities and institutions in different countries. As a Council of Europe parliamentarian, it is a great privilege for me to have been asked to help with programmes for such exchanges between the United Kingdom and elsewhere.

At the same time, as the noble Earl, Lord Kinnoull, reminded us, the United Kingdom must not fall behind the standards of competitor countries, which equally seek to attract foreign students to their own economies. There is every good chance that we will not do so and, instead, build up very good practice. Meanwhile, and to that end, we are fortunate to be guided by this useful Select Committee report.

My Lords, I begin by thanking the noble Earl, Lord Kinnoull, for his very fine maiden speech, which has already been referred to around the House. We are all very grateful to have him with us to join in our discussions. I send my particular welcome to him as a fellow chemistry graduate from the same university, although, I think, of a different generation. In fact, I think that we did the same thing, which was to take the best of the chemistry courses on offer and then immediately go off and do something else—in my case, an accountancy and professional administration degree. Nevertheless, the lessons that we learnt will stay with us. Indeed, the noble Earl was able to use his business experience to contribute directly to this debate and we were all informed by that. His point that international businesses need international STEM graduates is very important, and it is a theme that comes back throughout the report.

It is no disrespect to the noble Earl to say that the other people who have contributed to the debate have also made it a very high-quality one. The point was made that it was rather weighted on the scales towards the aristocratic side, with three earls and a viscount. Indeed, I got so freaked by that that I decided I had better have some reserves, so I brought along my good and noble friend Lord Grantchester. Unfortunately, he scarpered just before he had the chance to bolster up what I was about to say, but I am sure he will come back.

I thank the committee and particularly the chairman, the noble Lord, Lord Krebs, for an excellent report on international science, technology, engineering and mathematics students and for trying to tease out some helpful recommendations for the benefit of your Lordships’ House and, indeed, of the Government. Once again, it is fair to point out that there has been a delay of nearly a year before your Lordships have been able to discuss such a good report. That is to be regretted.

It is a fine report and it is in the best traditions of the House. It is one that we expect to see but it is also important to recognise how good it is. It is a process of taking evidence, reflecting on and sifting through it, and then reporting carefully on the issues and offering suggestions to the Government on how many of those issues might be resolved. Sadly, as the noble Lord, Lord Krebs, said in his introduction, the Government’s response to the report is rather defensive and, in some cases, rather brusque to the point of rudeness. I may be wrong but I wonder whether anybody else got from the response, as I did, some Orwellian overtones, with the assertive mantra: there was a problem; the government have acted; there is therefore no longer a problem and no further work is required. For example, the introduction to their response states:

“The Government has reformed the student visa system to cut out the abuse of the system, and will continue to do so. We have also taken steps to continue to attract talented international students to our world class universities. We have been very clear that there is no limit on the number of international students and there are no barriers to studying in the UK”.

It is pure aspiration and rhetoric. It is not evidence-based or thoughtful in terms of the report. It continues with the rather chilling phrase:

“There have been a number of myths and inaccurate perceptions, which we are determined to correct”.

That smacks more of Room 101 in the Ministry of Love than a considered response from BIS and the Home Office.

In my view, Britain has long been and must remain an optimistic, outward looking and confident nation. When more people travel and trade physically and virtually across borders than ever before, no country can pull up the drawbridge. Our economy and culture have benefited immensely from those who have come here through the generations. We should be proud of being British and we should rejoice in the confident British diversity that occurs right across the country, and which London showed off for us in Olympic year. As we have heard today, the impact of the Government’s student visa policy is both economically illiterate and culturally bankrupt. Bringing more talented students, whether from China, India or Brazil, to learn at Britain’s universities not only brings in substantial investment in the short term but helps Britain to build cultural and economic links with the future leaders of the fastest growing economies on earth.

Britain has a long and proud history of being the destination of choice for potential students from around the globe. Our universities are highly regarded and the UK provides a rich, diverse and safe environment to study. All of this is detailed in the report. It seems to me that, given the comparative advantage that we have established, and the place we hold within the world, UK higher education should be front and centre of an active government strategy to generate growth. If we are going to keep up with our competitor countries we need to be bringing in more talented students from around the world to learn at Britain’s top universities. It not only brings in substantial investment but helps Britain to build important cultural and economic links—the soft power referred to by other speakers—and we should be absolutely getting behind it and backing it all the way.

Why is the Government’s policy so confused? Why is it so destructive? It is already having negative impacts, as we have heard, on the perception of the UK as a good place to study. A recent NUS survey of international students found that 40 per cent of those who were here said that they would not advise a friend or relative from their home country to come to the UK to study. That does not seem to be the best possible advice. Everybody knows that the best advertising for any product are the clients and customers. If they turn against it, there is a problem.

As we heard today, the main charge is that there is a causal relationship between the immigration changes brought in by this Government and the erosion in our market share of students coming to study STEM subjects. The evidence is that there is a perception around the world that Britain no longer welcomes its international students. As we heard, the Indian subcontinent has been one of the worst examples of that. We think that many of the students who would previously have come here have gone to Canada, Australia or America. We doubt whether that will ever revert back to the normal situation. The evidence is difficult to prove. As was said, there is no test that could be carried out on what would have happened if the world had not changed, but it seems to be convincing that so much has happened within the period of four years in which these changes have come in. Changing the rules continuously, as has happened, and as documented in the report, fuels that perception, whatever the Prime Minister or Ministers may say.

If bureaucracy is intensifying and the costs are going up, we are hardly being competitive. The world market is competitive and we are falling behind in what we can offer in terms of easy access to courses and then in terms of graduate employment, as shown in the report and raised by a number of noble Lords. We are not able to sustain our postgraduate courses, with all that that implies in terms of what the impact might be on home-based students. It also has an impact on SMEs, as employers’ organisations have pointed out, so it is a perfect storm.

With one or two exceptions, we seem to be agreed in the Chamber that there is a problem and that the solutions put forward by the Government will not clear it up. But as the noble Lord, Lord Rees, said, what is intriguing is why this has happened. The department responsible for higher education, BIS, has in effect been rolled over by the Home Office and the policies of immigration have trumped the policies of growth. An initial idea, which was probably right in instinct and correct to carry out, to clean up what seems to have been a really troublesome FE sector in terms of immigration, has been used to drive a coach and horses through a sector that we should support and cherish.

Can the Minister reconcile what is set out in this excellent report with the aspirations set out in her department’s July 2013 publication, International Education: Global Growth and Prosperity, which is quoted in the Select Committee’s report, which states that international students,

“boost the local economy where they study—as well as enhancing our cultural life, and broadening the educational experience of the UK students they study alongside”.

Is that still the case? Can she confirm that it remains the Government’s intention to leave the immigration system as it is? If so, can she explain how the Government can say that they believe that it is realistic for numbers of international students in HE to grow by 15% to 20% over the next five years? I do not see the evidence to support that. Can she set out for us today the practical steps that the Government are taking to show that the UK values international students, will provide a warm welcome and support while they are here and will keep in touch after they go home?

I thank all noble Lords who have participated in this debate today and who have supported the inquiry, particularly the noble Lord, Lord Krebs, and the noble Earl, Lord Kinnoull, who made his maiden speech today outlining some of his experiences, which were extremely interesting. I also noted, as did the noble Lord, Lord Stevenson, that we are surrounded by three earls and a viscount today, so I stand humbled before the committee and the noble Lords who spoke.

The quality of the debate that we have had today underlines just how important it is to attract and harness the talent across science, technology, engineering and maths, otherwise known as STEM, and how important it is to the economic and social well-being of our nation.

In 2013-14, we welcomed 179,390 new entrants from outside the EU to UK universities, including 56,340 STEM entrants. This year there has been a 6% increase. That is an additional 3,400 STEM entrants from outside the UK. The UK enjoys a 13% share of the international higher education student market. Competing recruiting countries such as Australia, the US and Canada are developing national education brands and marketing activities alongside competitive visa policies. All noble Lords referred to that in some way or other. They raised concerns that changes to our visa regime for international students and specifically those on post-study work options have been a big deterrent. I will try to argue that the latest data show a much more complex and somewhat patchy picture.

There was a 7% growth in visa applications last year and 18% since 2010. That includes an 11% increase for the Russell group. The Government have been very clear that there is no limit on the number of international students and there are no barriers to studying in the UK. It is also true that the Government have made reforms to the student visa arrangements, as many noble Lords pointed out. I will briefly outline why.

Under the system that the Government inherited, there was evidence of the system being abused. My noble friend Lord Selborne alluded to that. An example of the scale of the problem is the findings of the National Audit Office which reported that up to a quarter of the international students who came to the UK in 2009-10 may have come to work rather than to study and 26% of international students at private colleges were potentially non-compliant with immigration control.

Since 2010 the Home Office has revoked more than 860 sponsor licences. The system needed reform, with a series of measures to tackle the abuse, while continuing to attract the best and brightest students, and we believe that we have struck the right balance. Striking the right balance does, however, mean some tightening up of the system in some areas. These changes were entirely necessary to eliminate non-genuine students and to remove those providers not supplying genuine high-quality education. We believe that these changes are helping to protect the reputation of the UK education sector.

The current visa system is a good one but the committee is right to advise the Government to keep the system under review so that we can remain competitive and respond to the changing needs of students, providers and employers. The report recognised that many factors influence international students when they decide where they would like to study and it can be,

“difficult to tease out the motivations of prospective international students with any great certainty”.

I will now address some of the committee’s key recommendations. The committee recommended that we should change the way we calculate our net migration statistics and not include students when considering immigration policy. A number of noble Lords mentioned this, particularly the noble Viscount, Lord Hanworth. The Government use the UN definition of net migration, which covers all those coming for 12 months or more, including students. There is no need to change the way we measure the statistics and this would not make any difference to our student migration policy. As the Prime Minister said before the Liaison Committee on 13 May 2014:

“We do not need to make a change to our immigration policy or the way we measure statistics in order to have an incredibly positive offer to students around the world”.

The committee also called for a period of stability. We are all aware that there has been significant reform during this Parliament. However, it is important to note that many of the changes to tier 4 have been undertaken in response to requests from sponsors to simplify the system or to provide more flexibility. While we seek to minimise the frequency of changes, it is important to retain flexibility and to react quickly where there is evidence that the system is being abused. That is why the Government are keen to work with the education sector and have set up the education sector forum with those institutions which recruit international students and have the practical experience to identify unnecessary obstacles and work with the Government to overcome them.

The report also recommended that BIS establish a working group to review the effects of a reduction in international STEM students on STEM taught masters courses. The Government response highlighted the fact that the International Education Council, which was set up following the publication of the international education strategy in 2013, would look annually at the trends of international students coming to the UK. I can confirm that the council met earlier this week and the matter was on the agenda. The minutes of the meeting will be published on the GOV.UK website in due course.

We also recognise that there is a job to be done in better communicating our offer. A number of noble Lords talked about this. Other nations are ready and able to pounce on any chink in our armour. In a world of mobile technologies and social media, any perceived difficulties within the UK will be played back not only by the media in our key competitor nations, such as Australia, Canada or the US, but more directly and more powerfully as students share their experience with their peers in Asia, India and the Middle East.

I am pleased to note that the Government have made some progress in improving the information that is available for prospective international students. The Home Office strategic communications team has developed a suite of products for use by stakeholders and migrants which are updated quarterly. The Government are very keen to demystify the student offer for international students, and I am pleased to report to the House that the immigration and universities Ministers have agreed to continue to develop communications material for international students, their sponsors and employers to explain the different work rights.

I should like to focus briefly on a country which was mentioned by a couple of noble Lords, and that is India. We have seen a fall in the number of Indian students coming to the UK. Our response has been direct and unequivocal. The Prime Minister visited India and stressed that the UK welcomes genuine international students. A series of Ministers, including Vince Cable and David Willetts, have visited India to reinforce the message. Sir Mark Walport, the Government Chief Scientific Adviser, has also visited and reiterated these points. The British Council has used the education element of the GREAT Britain campaign as part of a series of exhibitions and seminars across India to promote the opportunities open to prospective students interested in coming to the UK.

Noble Lords will appreciate that just as there are several factors influencing the promotion of the UK as a study destination, there are many factors which influence a student’s choice of course and institution and country. There has been particularly strong and continuing growth in the Indian higher education capacity, from 250 universities and 12,500 colleges in 2000-01 to around 700 universities and more than 35,000 colleges today, with a comparable increase in domestic enrolment rates. Around 45 UK institutions have a presence in India in the form of a representative office or individual, and all are investing heavily in resources to market their brand. These offices also manage alumni and partnership opportunities for their universities, thus contributing to the efforts of marketing the UK as a favoured study-abroad destination.

So that we can get a much clearer understanding of the reasons for such a drop in international students from India, Greg Clark and James Brokenshire now jointly chair a UK-India visa group which convenes every three months with Mr Ranjan Mathai, the Indian High Commissioner to the UK. The aim is to ensure that our existing visa rules are being applied correctly by discussing specific cases of individual difficulties brought by the Indian High Commission, to promote our excellent student visa offer, and seek to tackle the negative perceptions through targeted communications. We are making it clear that there are plenty of opportunities for Indian students who wish to stay to work after graduating in the UK, with no limits on their numbers.

Perhaps I may now turn to the specific questions put to me by noble Lords. The noble Lord, Lord Krebs, said that the exchange rate may have affected the number of STEM students coming here, but he also pointed out that the USA and Australia exchange rates have also fallen, so why have not their numbers? It is difficult to determine an answer. As the committee has recognised, many factors influence prospective international students when they are deciding where they would like to study, and it is not easy to tease out their motivations with any great certainty.

Most noble Lords asked about the post-study work route and expressed concerns about the short period of time that students on graduating have to remain in this country, as well as the level of starting salaries. The Government are committed to enabling the best international graduates to access the labour market. The old tier 1 post-study visa allowed too many students to end up in low-skilled and unskilled jobs or being unemployed. As I have already mentioned, in 2009 more than 38,000 graduates were given post-study work visas which gave them unconditional access to the labour market for up to two years. This was absurdly generous at a time of high unemployment in the UK.

We have replaced the post-study work visa with a selective system. All students studying a course for a year or more will have four months at the end of their course which they can use to search for a graduate-level job with a company holding a tier 2 licence. Those entering tier 2 in this way do not count against the annual tier 2 limit of 20,700 places. We have also waived the requirement on employers to test whether a suitable resident worker is available. It is easy for businesses to become tier 2 sponsors; they can apply online and the application takes just 30 minutes. That has been questioned, I know, by the noble Lord, Lord Rees, and so I stand corrected if that is not in fact the case.

The noble Earl, Lord Kinnoull, mentioned the milk round, which is an excellent way for companies and businesses to recruit students. I remember the milk round, and it is a way in which many students can secure jobs before they have even graduated, therefore putting them on the route to employment before the four-month clock starts ticking.

The noble Lord, Lord Krebs, mentioned the Sirius programme. If you look on the website, you will see that the Sirius programme is no more. That is because it was a pilot scheme, and the pilot is currently closed to new applicants. As he will know, it was a competition that invited applications in 2013 and 2014 and applications were received from over 93 countries. It is now being evaluated and we need to learn from the pilot before we can say what will happen in the future, but—there is no doubt about it—it has been a very popular initiative.

The noble Lord, Lord Krebs, mentioned a case study of a Canadian student, which is in the Select Committee report. The student in question could apply for a tier 2 visa and would be subject to the residential labour market test. The speciality that the student had chosen at that time was one where training places were, I understand, heavily oversubscribed, so the complaint is essentially that the places would be taken by resident workers before the student was able to apply. The NHS does choose to manage the RLMT by having two application rounds, with only resident workers being allowed to apply in round one. If the noble Lord would like any more detail on that, I am very happy to give it to him. Interestingly, there was no policy change in 2013 that would have changed the situation. Before April 2012, the student could have started her speciality training under tier 1 with no need for the RLMT, but this had already closed by the time that she finished her foundation training in August 2012. However, I am happy to write further to the noble Lord if he should wish.

Many noble Lords talked today about the difficulty in getting visas. We do not accept that the UK’s immigration rules are deterring international students and there is no clear evidence in the report to support that argument: where some courses and countries have seen falling numbers, other countries and courses are on the rise. As I have already outlined, visa applications continued to rise in 2014, with a significant increase for the Russell Group universities.

The noble Lord, Lord Krebs, asked about research by government to ascertain the views of students and the student experience. The International Education Council has commissioned a working group to look at the student experience and hear first-hand views from international students on what practical things we can do to remove barriers. The stakeholders will report once they have completed their project.

Time is running out; I am going to have to write to some noble Lords. My noble friend Lord Dundee talked about the recent improvement in numbers of Indian students. I have already covered the point on India.

My noble friend Lord Selborne talked about the tier 5 temporary worker visa, which is for 12 to 24 months. That is certainly a route for some international students. As a country and as a Government, I think that we need to do more to help employers understand the options open to them.

My noble friend Lord Dundee asked a question on entrants for STEM and non-STEM. In 2003-04, for STEM there were just over 39,000 entrants; in 2013-14, there were just over 56,000. For non-STEM, back in 2003-04, there were 72,500 entrants; in 2013-14, there were just over 123,000.

The noble Earl, Lord Kinnoull, asked about graduate entrepreneur visas and how many were issued in 2013. Some 171 were issued in 2013. He commented that that was quite a low figure and, given that it was such a good scheme, he asked whether we could do more to promote it. I totally agree with the noble Earl on that.

My noble friend Lord Selborne asked about tier 4 and whether the doctorate extension scheme is too complicated. The Home Office reports that 434 doctorate extensions were granted in 2013.

I have run out of time. I apologise—I know I have not answered all noble Lords’ questions because there was more to come. I thank all noble Lords for taking part in this very interesting debate.

My Lords, I thank all noble Lords who took part in this debate for their tremendous contributions. I particularly congratulate the noble Earl, Lord Kinnoull, on his excellent maiden speech. He made some immensely interesting points and revealed the advantage of having a chemistry degree from an ancient university.

I also thank the Minister for her response. The one area where we did not quite get the answer that we might have hoped for was on the four-month limit in the post-graduation time to acquire a visa. I hope that whoever is in government after the May election will look at that again, because the evidence is overwhelming from all sides that four months is just too short. As the noble Earl, Lord Kinnoull, said, with the milk round and the annual cycle of companies in recruiting, four months just does not work. As Sir Andrew Witty said, it does not leave students with enough time. I hope that will be reconsidered in future.

Motion agreed.