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Foreign students are key to UK prosperity

By Nick Pearce and Jo Johnson

Will the next generation of world leaders – the Manmohan Singhs, Benazir Bhuttos and Bill Clintons of the future – be educated in the UK? Our world-class universities explain why the UK is the most popular destination for international students after the US.

The 400,000 that come to British colleges and universities each year make up the major component of the UK’s £15bn-a-year education exports, and are also a source of lasting value. They take friendships and loyalties home with them that later become trade links, cultural bonds and diplomatic ties.

Britain’s universities are a globally competitive export sector and well-placed to make a greater contribution to growth. With economic growth at a premium, the UK should be wary of artificially hobbling it. Despite an increase in the total number of foreign students, our overall market share in international student education fell by nearly 1 percentage point between 2000 and 2009. It is important to understand why Britain is slipping and what can be done about it.

Unlike many other countries, the UK makes no distinction between temporary and permanent migration. All migrants who stay for more than a year show up in the long-term migration statistics, regardless of whether they leave a few years later. That means students who study in the UK for more than a year are caught by the government’s net migration target, despite the fact that they have little long-term impact. Cutting international student numbers leads to rapid short-term reductions in net migration: smaller cohorts arrive while larger cohorts from previous years leave.

While immigration is a major public concern, surveys show that it is not highly motivated foreign students toiling away in libraries that cause the British people anxiety. They do not feel culturally or economically threatened by overseas students, not least as they are much less likely to stay on than migrants who enter through the other main categories. The evidence suggests that only 15 per cent of students stay permanently, compared with about a third of those entering on work permits or through the family route.

Now that the government has clamped down on the problem of bogus colleges – an avenue for illegal immigration – there is scope to take legitimate students out of the annual migration targets so that we count only those who stay on permanently to work or get married after they have finished their studies. Indeed, that is what our main competitors in the global student market already do. Australia, Canada and the US sensibly treat international students as temporary or ‘non-immigrant’ admissions in their statistics.

They also take a smarter approach to post-study work. Students value this highly (partly because it enables them to start paying off student loans), and will invest their human capital elsewhere if it is not available. Competitors have understood that students tend to choose a country before choosing a specific university. Australia is especially keen to win market share. Last year it announced sweeping liberalisation of student visa rules.

It is crucial for the UK to build a national brand as a safe and exciting place to study, offering a rich life experience and enhanced career prospects. Tapping top-flight student talent globally will not just mean the UK gains in terms of innovation, research and a broader science and skills base. Greater exchange of students now will mean stronger relationships later. The UK cannot afford to lose touch with the next generation of opinion-formers, restrict understanding of the British worldview or allow the UK to recede as a cultural reference point.

Changing the way students are classified will have little effect on the government’s ability to control medium to long-term net migration. The success in tackling bogus colleges and fraudulent student visa applications has created the political space in which a change to the classification is now conceivable.

The government faces real choices over policy on international students. The difference they make to long-term net migration is relatively small. The difference these choices make to the education sector, to Britain’s soft power around the world and to the UK economy is very significant. (FT)

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