What Price Foreign Students?
With the newly announced net migration figure climbing to 215,000 from 196,000 the Government’s pledge to reduce it to the tens of thousands is proving to be even more difficult to achieve than ever. The main reason for this increase has been a further drop in emigration, a factor over which they have little control. Already, their capping of Tiers 1 and 2 to 21,700 for the forthcoming year with its overall reduction of some 5,000 has been superseded by this net increase. Given that the Government is fond of quoting Professor Metcalf of the Migration Advisory Committee on this subject, this is his assessment of Tiers 2 and Tiers 1 migration
All things being equal. Tier 1 and 2 migration clearly has a positive impact on (GDP). In a straightforward static analysis, Tier 1 and 2 migration makes a small but positive contribution to GDP per head. Such effects will accumulate over time and become more significant. (Source: MAC Report)
Not only is the cap on Tier 1 and 2 proving ineffective to meet the Government’s objective, it would seem that the TUC’s assessment that such an arbitrary cap will damage the economy is well founded!
Having done damage in one area the Government’s politically motivated drive to reduce net migration is now focusing on foreign students who make up some 60% of all non-EU migrants to the UK. Given the severe cuts they are making in Higher Education funding and the associated proposed tripling of student tuition fees, they know they have to tread carefully. The UK Council for International Student Affairs (UKCISA) recently estimated that Universities earned £2.5 billion from foreign students in fees alone, during the preceding year. For the majority of universities these fees represented between 10% and 30% of their total income. Billions are also spent by foreign students in the local economy. A 2007 British Council report estimated that the total value to of overseas students to the UK economy was £8.5 billion – a figure which included private sector colleges.
The Government is however generally shying away from the University sector and talking about targeting sub-degree foreign students of whom 131,000 were approved to study in the UK in 2009. They are particularly fond of talking about bearing down on bogus colleges! Their actions are however driven not by wishing to eradicate abuse but by arbitrarily cutting migration figures to meet their political goal. Such arbitrary interventions in this sector as with Tier 1 and 2 will not be without cost. Along with the real loss of driving away foreign students and with them income from legitimate colleges, the universities will not remain untouched. It is estimated that 50% of foreign undergraduate students have previously studied in the UK on sub-degree courses. It should be fairly obvious that sub-degree courses offer a valuable feeder stream for degree courses
Today’s Institute of Public Policy Research (IPPR) press release puts it aptly:
Foreign students contribute a huge amount to the UK education sector and to the wider economy. It is right to clamp down on abuse of the visa system but these proposals are driven primarily by the Government’s objective of reducing net migration by more than half. In its efforts to meet this objective, the Government risks causing significant harm to a highly-successful export sector at a time when the economy is still vulnerable.
The Government’s objective of reducing net migration is not only becoming more elusive, the pursuit of it is becoming more damaging.