25 October 2016

Cutting foreign students is a false economy

By David Laws

Ever since the Conservative Party set a target to reduce net migration into the UK, there has been a lively debate about whether overseas students should be included in these immigration statistics.

The Home Office – looking both at the magnitude of student immigration (over 400,000 foreign students were studying in the UK in 2014/15), and the scope for easily reducing numbers in order to meet its target of reducing net migration to below 100,000 per year – has been determined to count students in the immigration numbers.

The Treasury and the Business Department have been far less convinced by the case for controlling or reducing student numbers, and at times over the last six years both departments have made the case for excluding students from these figures and controls.

The new Chancellor of the Exchequer, Philip Hammond, appeared to be trying to revisit this debate in his answers to questions at the recent Treasury Select Committee last week, but it appears that he has been firmly “slapped down” not merely by the Home Office but by 10 Downing Street.

There is no dispute among sensible people that the Home Office and Education Department should be ensuring that students who come to the UK are real students, and not individuals seeking to evade immigration controls, in order to work and permanently relocate to the UK.

There clearly have been some abuses amongst both “legitimate” and less legitimate institutions, and it is quite right that these issues have been identified and addressed.

It is also perfectly sensible for the UK to track the numbers of students who are in the UK, and to make sure that these individuals respect immigration controls while they are here, and that they return to their home countries at the appropriate time.

The problem arises not because information is collected, but because of how it is used and interpreted. Each year there are huge flows of tourists from abroad into the UK, and millions of UK citizens who make overseas visits. No one would seriously suggest that we should have some sort of net target or ceiling for visitor numbers.

The risk is that consolidating the student numbers into overall “immigration” numbers both distorts public understanding and creates an incentive for the Home Office to seek to reduce student immigration – even though it seems both economically productive for the UK and relatively uncontroversial with the public.

Student immigration flows into the UK have increased rapidly over recent years, with non-EU flows into higher education tripling over the last 15 years. There have been particularly large increases in student numbers from countries such as China – a major targets for UK exports.

It is no surprise that the Treasury, Education Department, and Business Department want these large student flows to continue – essentially, UK education has become one of our most successful “exports”, bringing billions of pounds into higher education, further education, and the general economy.

Having high-ability students coming into the UK may also help us to recruit top graduates from around the world, as well as improving the UK’s links with many individuals who are likely to be influential in both the public and private sectors of the “home countries”.

Education looks like it is, and could be, a major export “winner” in a post-Brexit environment, which could otherwise be challenging for the UK. And most students will be a net “win” for the Exchequer, because the taxes they pay and the money they bring into the UK are likely to more than offset their cost to the UK for the public services they consume (students are likely to make only modest claims on the health service and on schools).

It is also striking that the UK population – generally sceptical about the benefits of much immigration – seems to be remarkably positive about student migration, including giving students a limited right to work at the end of their study.

If student “immigration” is counted as part of the target of reducing net migration to below 100,000 per year, there is a real risk that this may cause the Home Office to make policy choices which will reduce exports, undermine our education sector, restrict our access to high-quality future employees and researchers, and have little obvious benefit either to the economy or to public confidence in immigration.

The answer for the UK seems to be to allow genuine students to continue to access our education sector, without onerous controls or impediments, while separating immigration figures to show them both including and excluding students.

If the Government then wants to retain its commitment to a net migration target of 100,000 or fewer, the Home Office could and rationally should re-focus this target on the non student net migration number. Such an approach would seem to be both economically beneficial and likely to enjoy a large measure of public support.

David Laws is a former Education Minister and the executive chairman of the Education Policy Institute.