Almost immediately after their General Election victory, David Cameron and Theresa May announced that they were going to redouble their efforts to bring down net migration from the hundreds to the tens of thousands. This despite the figures continuing to climb steeply – now well over 300,000 and after missing a political opportunity to draw a line under their failure to come anywhere near their 2010 or 2015 pledges.
University figures have reacted with horror as Theresa May targets international students even more directly, even going as far as to say that universities should change their business models and all international students should leave immediately they finish their studies.
Despite this stepping up of the rhetoric – dangerous of course in itself as it immediately sends messages to students thinking of coming here and to competitors keen to exploit our distaste – others in government are becoming more vocal in their opposition to the Home Office’s hawkish plans. And this isn’t a Coalition objection in the form of the consistently oppositional Vince Cable or even the seemingly easy to dismiss David Willetts. This time the opposition is coming from some bigger beasts in the Conservative party.
So there are a few reasons why we might be more optimistic in the medium term. But at least one of these is double edged. First is the mounting political pressure from powerful colleagues inside the Conservative Party. The Foreign Secretary Philip Hammond has written to May – as part of the Cabinet ‘write round’ process where new policy seeks approval from ministers whose departments are affected. Not only has Hammond objected on the basis of damaging our ‘soft power’, he’s also leaked it too. That’s usually a strong sign of disagreement. Others, including Sajid Javid and George Osborne are said to have taken against May. Sources from the Treasury have been quoted in national newspapers voicing their concerns with the Home Office plan. Evidence of major political fallout mounts.
The second reason for optimism is a cultural issue embedded deeply in the Conservative psyche. This pits arguably the two most important Conservative issues – the economy and immigration – or economic and social conservatism against each other. They are difficult to reconcile. David Cameron seems unable or unlikely to settle this question. He didn’t in the whole of the last parliament and he doesn’t look like doing so now. He seems unable to choose between Great Britain as a global leader in a global race or a Little Britain stuck in a narrow, inward looking society. He’d very much like to have it both ways. But he can’t.
This brings us to the third issue and the most double edged. With HE spending under assault in the Spending Review, the additional teaching income offered by international students can keep balance sheets healthy. This is especially the case in STEM and in large areas of postgraduate education. All matter massively to the economy and to Osborne’s ambitions for improving productivity. Some state funding is likely to be withdrawn – from both teaching and research – and unless universities can make up the difference from other sources – including from international students – then large areas of important provision/activity could be lost. Osborne knows that if he makes cuts then the income from international students becomes even more important to universities and thus to the economy as a whole.
Most Conservatives would like to see universities more exposed to markets and more financially dependent on their performance within them. International students recruitment is a market and one that universities tend to do very well in. And crucially it’s a market that doesn’t depend on state income. Theresa May wants universities to “change their business models”. But this means that they would have to be even more dependant on state income or state-backed loans than is currently the case. With a government in place that is committed to delivering a smaller state, that looks unlikely to happen. Worse – at least for Osborne – is that a smaller state supporting a more domestic business model doesn’t allow universities and science to underpin an economic vision of growth, innovation and global competitiveness.
That’s the fiscal, economic and policymaking calculation. But of course there is also a deeply political element to this. Theresa May has leadership ambitions. Alongside Boris Johnson, she provides the only serious opposition to George Osborne. In July she took on the London Mayor publicly over his purchase of water cannons for London. At the same time Osborne used the Budget to slap down Johnson’s opposition to a third runway at Heathrow.
Osborne is now the clear favourite to succeed Cameron and so has become the candidate to beat. Already he’s the chief strategist as well as First Secretary of State and the ‘de facto’ Deputy Prime Minister. He has significantly more support in Cabinet than either Johnson or May. Nicky Morgan, Amber Rudd, Greg Clark and Sajid Javid have all worked for him at the Treasury. Philip Hammond and Matthew Hancock worked for him in opposition.
But Theresa May could still be his most difficult and tenacious opponent. That’s another reason why Cameron may be hesitating to offer support on international students. But at some stage Osborne may want to remind Theresa May that he intends to be PM and Conservative leader in 2020. Now might be that time.