MR LIAM BYRNE MP AND MS LIN HOMER

27 NOVEMBER 2007

  Q20  Gwyn Prosser: During this period when we are playing catch up with all these checks is there a security threat?

  Mr Byrne: I am not qualified to answer questions about counter-terrorism and the wider security threat. Very often the security agencies will ask Border and Immigration Agency officials to do things without telling them why they are being asked to do them. That is just the nature of the business we are in, but we are now in a much better position than before to manage that threat. Once upon a time in this country you did not need a licence to be a security guard; there was no right-to-work check undertaken at that stage and it was very hard to make such a check. Now it is different. Once upon a time you did not have things like biometric visas and passenger screening systems. All those changes are new and strengthen the hand of our counter-terrorism forces.

  Q21  Gwyn Prosser: Can you tell me how many prosecutions there have been against employers who have failed in their duty to do right-to-work checks?

  Mr Byrne: I have not brought that information with me, but it is something that I have placed before the House and I shall be happy to write to the Committee. I should enter the caveat that I believe it is too low.

  Q22  Gwyn Prosser: Is it in single figures, dozens or how many?

  Mr Byrne: It is dozens, but it was because the 1996 legislation, which we inherited, made it quite difficult to prove the case that we changed the law. That is why we are introducing a civil penalty regime in the new year.

  Q23  Mr Clappison: You have told us about the action which the Home Secretary took in July, but you knew about this in April. Can you tell us exactly what it was you knew about this in April of this year?

  Mr Byrne: I knew in April that a Border and Immigration Agency operation had detected a problem with one of the MPS contractors.

  Q24  Mr Clappison: What was the problem?

  Mr Byrne: That they were employing a certain number of illegal immigrants. That was then the trigger for a different kind of check which was introduced in June. I want to be quite clear about what was known when. The Committee is right to press me on that.

  Q25  Mr Clappison: You did not tell the Home Secretary about this in April?

  Mr Byrne: In April there was a trigger for a different kind of check. In June the different checks were introduced. That resulted in a higher refusal rate which in turn prompted the Home Secretary's decision to introduce a 100 per cent check.

  Q26  Mr Clappison: Did you tell the Home Secretary about it in April?

  Mr Byrne: I do not think the Home Secretary was told in April about the results of this single BIA operation.

  Q27  Chairman: Mr Clappison makes a very important point. Can you let us have a chronology of exactly who knew what and when in time for our meeting with the permanent secretary next week?

  Mr Byrne: Yes.

  Q28  Chairman: We are not holding a very big inquiry into this but we want to have answers. We would like a chronology starting from when you discovered this in April. Who knew it and what has happened right up to the present?

  Mr Byrne: We can provide that today.

  Chairman: I should like to move on to migration statistics and the impact on public services.

  Q29  Ms Buck: Minister, I am sure you will realise that this is very dear to my heart. My confidence in these figures collapsed on census day 2001 and disintegrated for ever when the then chief executive of the ONS said that the one million person under-count in that census probably resulted in one million young people going to Ibiza. I am sure you will agree that two particular questions arise: first, the accuracy of the migration statistics in the country as a whole, which is closely tied to the issue of those who arrive and those who leave the country; and, second, the distribution of migration within the country which is of great importance to those concerned with public services and community cohesion. To start with the statistics for migration into the country, why has it taken so long for government as a whole, including the Home Office, to respond to those very grave concerns about the accuracy of the statistics which were first reflected back in 2001?

  Mr Byrne: First, I share your concern about statistics. We have similar constituencies. I come across many of the issues in inner city Birmingham that you observe in your constituency. My views about the quality of ONS data are already matters of public record. It is something that I am pursuing with the national statistician in the next week or two. I do not believe that this problem has been ignored. The interdepartmental task force on migration statistics was set up in May 2006 and reported in December of that year, and 2007 saw improved population estimates which sought to put in place more accurate national and sub-national breakdowns of statistics. There were improvements to data sampling at ports and the way that the international passenger survey was conducted was changed, but my basic position is that we will not really make a step change until we do two things which have required about 12 months' preparation. First, obviously we have to start counting people in and out of the country. That is difficult. There are 250 million passenger movements in and out of Britain. That is a big job and paper-based systems will not work. We have just finished a procurement process, which took approximately 12 months, for electronic passenger screening systems which not only screen passengers against our watch list but also allow us to count people in and out. That was the contract for which we announced the award last week. The second and possibly slightly more controversial point is that getting a sense of where foreign nationals are living will be substantially improved through the issue of compulsory ID cards to foreign nationals. That will involve our collecting not just names but also addresses of where foreign nationals are located. We could not start to introduce that until we had in place the UK Borders Act which has just received Royal Assent. It took about a year to go through the House. That means we can start to introduce those cards next year. This must be a two-fold process: one is to count people in and out of the country; the other is to understand whereabouts people are. The interdepartmental task force is good and is already making all sorts of important changes and there is a programme of changes in place over the next year or two. The national statistician will be able to explain that in greater detail. If you were to ask me what I believed to be the key to getting this problem sorted out I would say it was counting people in and out and introducing ID cards to get a better understanding of precisely where in the country people were living.

  Q30  Ms Buck: As a short-term solution, can you explain a little more what improvements are being made to the international passenger survey? You will be aware that the Local Government Association, including my own local authority, has been extremely sceptical of the latest population count—I agree with them in that respect—which is entirely counter-intuitive as to what is happening in terms of location and population. Can you talk about the accuracy and measurement of information not just at airports and ports but also coach terminals and the arrival of people by all sorts of different routes?

  Mr Byrne: The changes to the international passenger survey introduced in 2007 in addition to the breakdown of statistics were basically two fold. The first was a massive increase in the sample size. The sample size for IPS was traditionally about 800 and was increased to about 3,000. The second change introduced was to look at the best times of day because obviously that can have quite a big impact on the kinds of travellers being picked up. I think the more important changes will occur next year. Probably the most important change is where the passenger survey is conducted. If you go to new airports like Bristol or Leeds/Bradford they have seen a very rapid growth in the number of passengers passing through them. The international passenger survey must be slightly more up to date in the way in which people are counted in and out of the country. Therefore, changing the port samples is important. In addition, next year we will be activating the e-borders system which already covers about 30 million passenger movements. When the new contract is in place next year it will give us a little more information. I also understand that the ONS is using a continuous household survey. But I think that the IPS is about making sure the right ports are sampled and that the sample size is increased and that is an essential pre-condition of strengthening the statistical integrity of it which many of us have questioned.

  Q31  Ms Buck: Do you now have complete confidence in the statistics that the ONS is giving you?

  Mr Byrne: I have more confidence than I had before, but I still think they have some way to go.

  Q32  Ms Buck: Do you agree with Richard Alldritt, chief executive of the Statistics Commission, that today approximately £100 billion worth of public money is distributed on the basis of population statistics that may not be accurate?

  Mr Byrne: I would agree with the first but not necessarily the second part of the sentence. The figure of £100 billion sounds about right if you take the £25 to £30 billion that goes to local government and the £11 billion, which it is soon to be, that goes to the police. From memory, the funding formula for primary care trusts involves population statistics, so those statistics are important in all those formulas and therefore migration statistics are important, because migration is now the principal driver of population statistics. We have to be slightly careful not to forget the change in resources we have seen. If you think about the 1 per cent real terms increase each year in the local government settlement, that is worth nearly £1 billion in the first year. If you look at the £50 million that Hazel Blears announced on 6 October for community cohesion, some of that can be spent to address migration issues. If you look at the ethnic minority achievement grant, that is projected to increase by about £25 million over the next three years. Some of the costs of migration are picked up by the Home Office. If you look at the amount of money we spend on unaccompanied asylum-seeking children, asylum-seekers and failed asylum-seekers to keep them from destitution many of those costs are picked up directly by the Home Office chequebook. It is an important debate, but we need to be careful about saying there is a simple relationship between population change and public service costs. It was the Audit Commission which said in January there was not a direct relationship. Obviously, if there are people from Eastern Europe who are young, healthy and in work their impact on public services will be minimal; if one has a trauma victim with a family who has been given asylum obviously the cost is higher. There is not a linear relationship. I think the Audit Commission went on to say that some authorities had done a better job than others at changing their services flexibly.

  Q33  Ms Buck: That is right. Some local authorities would say, however, with some justification that although there are resources following those groups you have outlined in many cases they do not meet full cost, particularly in relation to the second category. That is perhaps more a question for DCLG than you. You have made a case for e-borders through ID cards. Do you think it is acceptable for public services to have to wait until the full implementation of an electronic and biometric ID card system before they can have confidence that resources will follow migration movements?

  Mr Byrne: There are two points here. First, the programme of work that ONS has in place will produce better population estimates, and the results of the interdepartmental task force that concluded in December of last year entail a programme of work over the next three or four years that will cost of the order of £30 to £40 million. Currently, the Home Office is negotiating its contribution to that money. Those statistics will get better and better each year and that is important. The second point is that you have balance giving public service leaders the confidence in what their budgets will be for two or three years. We happen to be a government that is putting extra resources into frontline services; budgets are going up. I think you risk chopping and changing budgets if you wire the funding formula and settlement too closely to day-by-day movements in population numbers. I think there is a balance here to be struck.

  Q34  Martin Salter: I too have a series of questions on the impact of funding public services, particularly the police. Before I come to that, has the Treasury made any estimate of the increase in tax revenues generated by an increase in the workforce as a result of recent migration?

  Mr Byrne: We tried to summarise some of this in a report we prepared for the House of Lords a month or two ago. There were two headline conclusions. The first is that we think migration added about £6 billion to national output in 2006, which is quite a big number. We also summarised IPPR data from 2003 to 2004 which estimated that migrants contributed about 10 per cent of government revenue and consumed 9.1 per cent of government expenditure. On balance, the evidence we have suggests that for both the economy and the Exchequer migration is good.

  Q35  Martin Salter: I want to look at the impact on policing. I note the work of the Migrants Impact Forum which talks in terms of the impact on policing. There has been an increase in low-level crime such as uninsured vehicles, driving without the wearing of seatbelts and antisocial behaviour. From my experience in Reading, my constituency has experienced significant migration particularly from Eastern Europe. Sadly, we have seen an increase in vagrancy—which is a great shame because people come half-way across Europe and end up living on the streets—street drinking and breaking into boats on the Thames in order to find somewhere to live. I have seen an increase in drug dealing, prostitution and chronic overcrowding and hot-bedding in densely-packed terraced housing areas in total breach of environmental and health legislation. That is a worry for the local authority, and it also has some impact on policing and local services. On the other side of the equation, I note that migrants are more likely to be victims rather than perpetrators of crime, particularly hate crimes. There is also the really worrying problem of women being trafficked across Europe and elsewhere by gangs that now have easier access across our borders to promote that trade. It seems to me that whether they are victims or perpetrators of crime increased migrant numbers has an impact on policing. What is the Home Office doing about the impact of migration to inform the police funding formula in the first instance?

  Mr Byrne: Tony McNulty is the minister who will make a full statement on this when the police settlement figures are presented to the House a little later this year. At this stage there are three points I make. The first is that it is very hard to prove statistically the relationship between migration and crime, in part because we do not collect national crime figures based on the nationality of the individual. Part of the reason we made sure the police were involved in the Migration Impact Forum was to ensure that even if there was not a proper statistical base to it we could at least get feedback from ACPO and others. The evidence presented to the Migration Impact Forum when we looked at the decision on Bulgaria and Romania was that migrants were very often the victims of crime because they were vulnerable to exploitation by gang masters and to exploitation by unscrupulous landlords and there was a combination of the two effects, the provision of housing being used as a tool to keep wages low. It is difficult to prove. The second point is that overall police funding has grown dramatically.

  Q36  Martin Salter: That is not my point. The question is how we allocate increased funding.

  Mr Byrne: My third point was going to be that the funding formula used to allocate money to the police will draw on 2004 sub-national population projections for 2008, 2009 and 2010 simply because that is the best available data. I think we should remember that the formula used to drive police funding does not draw just on population statistics; it also draws on the socio-economic condition of different areas and also differences in crime rates. Population estimates are important and they will be affected by migration estimates, but there are huge other factors in the formula as well, not least the crime rate in different areas.

  Q37  Martin Salter: The other day I had the privilege of going out on patrol with community support officers. Reading is very lucky to have a couple of Polish police community support officers who make a fantastic contribution. Surely, in communities like mine and elsewhere where there is a large influx of Eastern European migrants it makes an awful lot of sense to have a recruiting policy aimed at getting more police officers from those communities. It is a little difficult to police an alcohol-free zone if you cannot talk to people in a language they understand.

  Mr Byrne: You are right. One of the points made by the Audit Commission in its January report is that different parts of the country are thinking about the way they provide services to communities that are changing in quite flexible ways. It should be for frontline professionals in different parts of the country to work out how best to do that. Some areas are doing a very good job. One of the things that has changed in the past couple of years is that migrants come to areas where there is not a long track record of welcoming newcomers. That means that public service professionals in those areas face questions that they have not had to deal with before. In places like Birmingham, Manchester, Leicester and your constituency people are thinking pretty innovatively about how to change and flex services to take account of changing population needs. I often say that migrants move faster than ministers, but very often frontline professionals are able to keep services up to date far faster than we can design it in Whitehall and Westminster.

  Q38  Mr Clappison: We shall be discussing the economic impacts of migration and the House of Lords report shortly, but I should like to ask about the points-based system and the effects it will have. Since 1997 we have seen a very substantial increase in both inward migration and net migration and that has been due in no small measure to the very substantial increase in the number of work permits issued in contrast with what happened before 1997. Do you expect more or fewer work permits to be issued under the points-based system?

  Mr Byrne: The simple answer is that we have not yet made that decision, partly because I said that we needed to make two changes to the way we made immigration policy: we need to make it in a much more open way, which means that we need to take evidence on not only the benefits but also the wider impacts. We set up the Migration Advisory Committee to advise on that matter and we set up the Migration Impact Forum to advise us on the wider impact. But the second point is that we will not introduce the points system in a big bang. It is the biggest change to our immigration system since the 1971 Act. It is possible that the changes are even more historically important than that. The points system will be phased in beginning in the first quarter of next year. What I want to do is publish the evidence from the Migration Advisory Committee and Migration Impact Forum at the time we publish statements of intent about how that particular tier of the points system will work.

  Q39  Mr Clappison: Do you have any estimate, research or figure to show the change that the points-based system will make?

  Mr Byrne: In the political market in which we both work there are two proposals on the table. One is to introduce a points system and one is to cap economic migrants from outside the EEA. When I asked ONS to look at the impacts of these different approaches I was told that a cap on non-EEA migrants coming to the UK for economic reasons would cover about one in five newcomers to Britain. If you look at the points system, because it embraces students who are about 25 per cent of the inflow into Britain last year and dependents, that will cover about six out of 10 people coming here. Therefore, the points system is far wider in scope than a simple cap just on economic migrants from outside the EU and potentially it is very powerful.