Immigration is one of the most credible levers for economic growth we have – it’s time to embrace it

The UK’s economy is reliant on migration.

Irrespective of political comfort, or promises about headlined numbers, or what the press says, the UK has an aging population and a declining fertility rate. It also has a productivity crisis. There is just no path to having a bigger economy with a radically smaller workforce. It is uncomfortable for some but the economic reality of aging means the UK needs more people.

Not all kinds of migration are the same and different kinds of migration have different economic impacts but analysis by the IfS shows that in aggregate:

[…] 200,000 higher net migration per year over five years can raise tax revenues by £17.5 billion in the final year of the forecast (in 2028–29 prices). Using these estimates, if the OBR continues to anchor its year-5 net migration forecast to the ONS’s long-term projection, the recent downgrade to the ONS long-run migration assumption could reduce forecast tax revenues by £1–5 billion in 2031–32, depending on how the OBR adjusts its net migration forecast over years 1 to 4 of the forecast.

In short, if migration reduces as current forecasts suggest it will cause significant harm to the economy.

The perfect world

In a world without politics, migration policy would be tweaked to try and meet the needs of the economy, meet the UK’s humanitarian commitments, and whatever else criteria it might choose. Of course, immigration is not just a political issue but consistently the political issue.

It’s on this basis that the higher education approaches to the politics of immigration can often look puzzling from the outside. The majority of the higher education sector would be happy to be left alone by the Home Office to recruit whomever it wants to the courses it wants. Economically, the government has encouraged a system which is entirely reliant on the recruitment of international students. Politically, an Andy Burnham government that has signalled continuity from the previous Labour government on migration is unlikely to allow larger numbers of international students into the UK.

The politics of this are not particularly complex. The government believes it will win more votes by being seen to reduce net migration than it will by supporting the financial success of universities. In the Budget John Healey could have signalled some kind of move on net migration, or skills tied to migration, or various taxes and surcharges. He did not.

To be clear, this might be electorally useful but it is short-term political gain for long-term economic pain. Burnham has shown he can do hard things: pension triple lock, relationship with Europe, and touting welfare reform, for starters. He has entirely ducked the debate on what he wants the higher education system to do, or look like, beyond some noises about parity of esteem. He has been even quieter on immigration other than housing for asylum seekers and overseeing the inter-ministerial row over Indefinite Leave to Remain. The result is a political vacuum of damage to universities and little action on migration.

The actual world

The slow down in visa approvals in higher education will maintain while the electoral price for doing so is low. In the sector making the case for fairer conditions it should not shirk the fact that it is one of the single biggest driving forces of net migration in the country. It is true that many of those migrants return to their own country but year on year universities enable significant levels of immigration to the UK. In the year ending September 2023, the peak of student migration to the UK, student migration was the single highest source of non-EU immigration to the UK above work, asylum, and humanitarian reasons.

It cannot be overstated just how sceptical the general public is about immigration. According to YouGov polling, around 50 per cent of the public believe immigration is the most important issue facing the country. The salience of this issue has consistently crept up this decade since its low point of 14 per cent in April 2020. Today, it remains more important in the minds of the general public than the economy, crime, or welfare benefits. A massive 63 per cent of voting enthusiasts (people aged 50-64) believe it to be the most important issue facing the country.

The other big problem is that there is not a strong correlation between net migration and the prevalence of migration as an issue. Covid aside, net migration is now estimated to be lower than any time since 2003. This period has seen both the highest levels and lowest levels of importance placed on immigration. The importance of immigration as a political issue has little to do with the actual numbers but everything to do with what is seen to be done about the numbers.

The core defence of the higher education sector has been that student immigration is not really like other kinds of immigration. Polling commissioned by UUK showed that only a small section of the public views students as migrants in the conventional sense. The findings are robust and they speak to a sense that people don’t view immigrants as a blob but make calculated decisions about their contribution to the UK. The polling does not suggest that the general public would accept much higher levels of immigration if this meant more international students could study in the UK. It definitely does not show a range of preferences of the public on students from which countries, studying which subjects, and the impact on net migration. It is a helpful poll but it is narrow on a specific kind of migration not migration generally.

It is understandable that universities have tried to divorce student migration from migration generally. The sector has not tried to convince a sceptical public that net migration is good. The UUK commissioned polling only bolstered calls to remove students from the net migration figures entirely. Unfortunately as Harry Anderson at UUKi pointed out, it would also make no sense at all. It is technically possible but ethically it is absurd to remove one form of migration over another as it makes for a better argument about net migration.

A whole new world

Another defence has been that student migration props up universities and reducing net migration would wreck university finances. This is entirely true but it does not mean it is persuasive. This assumes that the government would feel the pain equally on bad news about migration as it would on university closure. Universities cannot pretend migration does not exist and it cannot make the case for migration on the basis of their own balance sheet. The former is the distortion of reality and the latter is wishful thinking. The challenge is harder than both hiding and hoping. It is making the case for the kind of country the UK can be, and how immigration plays a role within that.

The opportunity with a government that has promised growth in every postcode, devolution, reindustrialisation, and the revitalisation of towns all at once, is to demonstrate how university supported migration fits their agenda. Every single time we are explaining our own finances we are losing. Every single time we talk about the country we can win.

The starting point is to acknowledge that universities are a driver of net migration. The ask shouldn’t be for a more accommodating system but for a system which meets the needs of the country – this also includes universities. This means being firm on cracking down on poor practice, making the case where migration aligns to the industrial strategy, and growing student numbers that can be sustainably supported by institutions and through good housing. It also means being more on the front foot about the sector’s economic commitment to the country.

Burnham may want to rewire the state but he has few answers on what are the levers that are going to actually cause the economy to grow. Migration is one, whether government likes it or not, and universities are well situated to argue that they encourage the most desirable possible version of migration in the form of ambitious and skilled young people. But that takes a genuine commitment to deploying resources to grow the economy of which international students are part. This might be new work in knowledge exchange, research programmes, teaching, community engagement, high street regeneration, or any other number of things in between.

It is not enough to make the case that international students make the sector better in a multitude of ways. This is plain to see and people working within universities know this. The future of universities is dependent on the sector going even further to grow an economy which has been stuck, and making migration part of that effort.