Britain risks throttling a golden goose

Britain’s universities are one of its crown jewels. They are vital to competitiveness, skills and innovation and bring in lucrative export earnings. But this week migration advisers, business leaders and the sector regulator have warned that falling overseas student numbers due to a government clampdown on immigration threaten serious harm to universities, which rely on overseas student fee income. Cutbacks loom; some universities could close. Company bosses say that would undermine a key reason to invest in the UK. For a post-Brexit Britain that has not only pledged to raise domestic skills but must continue to fight globally for capital and talent, this is a huge economic own-goal.

The government has targeted international graduate students as part of efforts to reduce net legal migration from a record 745,000 and 670,000 in the past two years. Such influxes put strain on housing and services, and immigration is back among voters’ top three concerns. The worries, however, are also fanned by the government’s own rhetoric.

The numbers are already set to fall towards more normal long-term levels as big one-off inflows subside — from Ukraine, Afghanistan and Hong Kong, and a post-Covid surge of overseas students when other countries were still closed. Yet restrictions introduced on international graduate visas, barring those on non-research courses from bringing family members, have now contributed to sharp falls in applications. Initial indications are that they are running 57 per cent down on last year.

This means serious belt-tightening since, with fees for domestic students in England frozen for a decade, universities make a £2,500 loss on each one. Income from uncapped international fees has become a vital cross-subsidy.

Critics have claimed the “graduate student route” opened in 2021, allowing students to remain for two years post-degree to seek a permanent job, was being misused as a backdoor immigration route. An investigation by the independent Migration Advisory Committee found no evidence of any deliberate and widespread abuse, and said the scheme was achieving its objectives of maintaining competitiveness and raising education exports. It urged the government not to restrict it further without addressing the funding crisis in higher education.

Tory rightwingers who insist only the “brightest and best” overseas graduate students should be admitted say many are studying outside elite Russell Group universities. Some say Britain has too many universities teaching low value degrees and contraction is merited. But some talented overseas students choose non-elite colleges because their fees are lower. Such institutions often also cater disproportionately for less well-off UK students who, thanks to cutbacks to further education colleges, have little alternative.

The UK should not allow international student numbers, broadly in line with its 2010 market share of global higher education, to drop further. But the lopsided funding model for UK universities that has been allowed to evolve is at breaking point; the workings of financing, student fees and loans need to be rethought. Since Labour may shortly inherit the problem, it needs to set out a more credible vision of its own.

With some multinationals saying this week they have had to rescind offers to foreign graduates because of salary thresholds designed to limit migration, this is also about Britain deciding what kind of country it wants to be. Conservative governments insisted that after “taking back control” of its borders post-Brexit, the country would stand proudly as Global Britain. Many talented foreigners who aspire to study or work in the UK are hearing a different message.

Letter in response to this editorial comment:

University cash cow puts academic standards at risk / From John O’Hagan, Department of Economics, Trinity College Dublin, Dublin, Ireland