A rich pool

There has been much discussion in the UK press following the release of new figures showing a net migration of 504,000 over the last year. Much of this debate has focused on the government missing its migration target yet again. The small print, however, indicates that 277,000 of these half a million people are international students, most of whom would be expected to leave the UK within a year or two of completing their degree. We are misrepresenting the immigration figures in the UK by including international students, and in doing so, we are missing a major opportunity for the UK economy.

Education should be seen as a major export for the UK. Students bring international earnings into the UK just as any other export does. In this respect, they are not dissimilar to tourists, although of course they pay significantly more. Many international students pay approximately £20,000 for each year of their degree. They enable UK universities to survive and thrive, underwriting much of the research that is taking place in our universities and helping them to stay at the top of international league tables. Of course, unlike other exports and unlike tourists, international students draw on our services, especially healthcare. However, they are not entitled to benefits and cannot take up jobs in the UK. As Jim Dickinson, associate editor of higher education publication Wonkhe said: “In an ideal world, news that the higher education sector is attracting a significant number of students to study in the UK would be great news for a post-Brexit ‘global Britain’.”

Let us now consider a long-term strategic issue facing the UK. It is clear to most economists that UK economic growth (as well as reduced inflation) will require an increase in our labour supply. This was reiterated by the CBI last week, and also by Brexit-supporting peer, Lord Wolfson, who said the UK’s immigration policy was holding back growth. It has been suggested that a one-off increase in worker numbers could be achieved by bringing the long-term sick and the retired back into the labour market. However, this cannot be a long-term strategy. There are, after all, only so many people who want to – or indeed can – get back into the labour market. Growth will require sustained increase in labour supply and therefore will require some immigration. Of course, this immigration needs to be strategic and carefully thought through. A UK government Committee has been considering this issue but has not reported yet. As we hit a recession, it is clear that the UK will need to consider its labour market strategy for growth.

How is this related to international student numbers? If the UK needs immigrants and it is already training a large number of international students, what better way to fill its labour requirements than to recruit students who have been trained here? We know the quality of these students, their dynamism and we also know that they are familiar with UK institutions, cultures and processes. Equally, or perhaps more importantly, a very large majority of these students go back to their home countries carrying their UK education in their psyche. This is a massive reinforcement of the UK soft power in the world and, as Jim Dickinson said, a great boost for ‘Global Britain’. A few years ago, I visited Kenya with the University of Reading and we met a large number of university and research staff there, including the vice-chancellor of one of the universities. All were trained in the UK, and all looked back at their education and their time in Britain with great fondness.

The government’s current policy of counting international students numbers in its immigration targets, and consequently trying to restrict these numbers, is undermining one of Britain’s most successful sectors, the higher education sector, and also its wider economic growth strategies. More careful thought needs to be given to immigration policy in the UK.

Image credit: LWYang from USA, CC BY 2.0 via Wikimedia Commons