HL Deb 21 February 2005 vol 669 cc981-3

2.43 p.m.

Lord Sheldon

asked Her Majesty's Government:

What estimate they have made of the revenue raised by charging overseas students for visas to Britain.

The Minister of State, Home Office (Baroness Scotland of Asthal)

My Lords, the revenue raised through charging for visa fees for overseas students is on a cost recovery basis, not on profit. Visa fees are set at a level to ensure that the full cost of providing the world-wide entry clearance is met entirely from fee income and no part of the cost is met by the UK taxpayer. Revenue raised for the financial year 2002–03 was £6,548,580 and for 2003–04 it was £8,101,080.

Lord Sheldon

My Lords, I thank my noble friend for that reply. I understand that some of these charges can go up to £300, £400 and even £500. It is very difficult to see how these charges can be justified as they do not seem to be related to the 37 minutes which I understand is the average time taken to process these applications. Is it not very important to recognise that the people who come into this country to study are likely to become very important people in their own country when they return there, with enormous advantage to us? We should not he trying to make a profit but ensuring that the charges are reasonable in the circumstances.

Baroness Scotland of Asthal

My Lords, I agree with my noble friend about the importance of students coming here and the benefits to this country. I can reassure him that the costs of processing student leave-to-remain applications are based on approved Treasury cost recovery guidelines. This means taking the full cost of providing the leave to remain service and dividing it by the volume of applications to arrive at a fee per application. It does not mean calculating the cost of each activity associated with processing an individual application and extrapolating a unit cost from that.

Lord Howe of Aberavon

My Lords, I declare an interest as one of several Members of the House who are trustees of the Cambridge Commonwealth and Overseas Trusts. I am sure the Minister is aware of the overseas research scholarship schemes—recently extended, I am glad to say—financed by the Government, which are designed to compete head-to-head with other countries in attracting to our universities some the best students in the world. Is it not, to say the least, unwise to announce an increase of 100 per cent in the leave-to-remain charge for graduate students going on to postgraduate qualifications almost at the same time as the United States is announcing substantial relaxations in its visa requirements?

Baroness Scotland of Asthal

My Lords, I understand the noble and learned Lord's concern. Perhaps I may reassure him about the way in which visa applications will be dealt with. The whole of the time that a student will need to be here will be covered by the original visa given to the student and we hope that there will not be a need for further extensions in the way that the noble and learned Lord fears. We are committed to ensuring that international students are welcomed here, that they have a vibrant and proper time, and that they benefit hugely—as we will benefit—from their presence in this country.

Baroness Sharp of Guildford

My Lords, is the Minister aware that the costs of student visas in this country already compare unfavourably with the costs of student visas in other countries? What assessment have the Government made of the impact of these changes and their refusal to consider visa appeals, which was announced on 8 February, on the number of overseas students who might come to this country?

Baroness Scotland of Asthal

My Lords, I can reassure the noble Baroness that these issues have been considered very carefully, not least in regard to one issue in which this country may appear at first flush to be more expensive. The noble Baroness will know well that the effectiveness of the scheme overall gives incredibly good value for money. For instance, the length of most courses for a first-time degree is three years; in many other countries it is four or five years. So, overall, we have created a very good environment in which students are able to take advantage of the most excellent opportunities that they have right here in this country from our wonderful universities.

Lord Tomlinson

My Lords, will my noble friend undertake to examine the point that visas for overseas students ought to be made specific to an educational establishment? I recognise that students may want to change the place at which they undertake their studies but the visa ought to be institution specific in order that the institutions can themselves accept a responsibility for liaising with the Home Office when students who have come into this country supposedly to study do not turn up.

Baroness Scotland of Asthal

My Lords, I certainly undertake to take that matter hack, but I can assure my noble friend that a great deal of work is now being done with universities and establishments to ensure that we have a proper grip on these issues and that students who come here quite genuinely to study do that properly.

Lord Roberts of Conwy

My Lords, can the Minister confirm that the actual increase in charges is from £165 to £250 for a personal application and from £250 to £500 for a postal application? If the last figures now cover charges—and therefore mean no burden to the taxpayer—what happened previously and to what extent did the taxpayer subsidise these students?

Baroness Scotland of Asthal

My Lords, let me make it plain that in relation to the recovery costs, it is still not absolutely full cost recovery. As I have tried to make clear, the Government have accepted that there is a real benefit to this country in having foreign students come here and, as a result, we make a contribution of about £85 in that respect. On the other charges, an assessment was made in accordance with Treasury guidelines on what proper recovery should be made, and the figures were set at that level.

Lord Hannay of Chiswick

My Lords, can the Minister tell the House whether any inquiries into the likely effect were made before these increases were introduced and whether any information was sought from universities on their view of the impact on their student intake?

Baroness Scotland of Asthal

My Lords, I shall certainly write to the noble Lord. The student task force, which was set up last year, has successfully tackled a number of issues. We have been working very closely with the education sector to make sure that these matters are better and more properly understood. However, I shall write to the noble Lord about the details he seeks.