Universities, the economy and immigration

Higher education is now at the centre of a tentative Conservative Party leadership election battle between George Osborne and Theresa May. With May ever-pandering to right-wing impulses in immigration policy, Osborne is presenting himself as a friend of universities and growth, and both are preparing the battle lines that will follow after the General Election. As universities enter the heart of this new and intense political struggle, Martin McQuillan looks at its implications for higher education.
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When did George Osborne become the best friend of universities? It seems to have happened sometime during the unraveling of the policy on the student loan book when the Treasury had to intervene after the Department of Business, Innovation and Skills blew its annual operating budget in November 2013.

The Treasury also picked up the tab for the shortfall in graduate repayments, kicking the can of the unpredicted non-cash impairment down the road of Whitehall accounting conventions. It was at this point that the Chancellor withdrew the additional reserves he had offered BIS in the previous three years and no longer considered the HE team capable of running its budget. It was shortly after that the long-serving David Willetts was replaced as minister by the timeserving Greg Clark.

It is profoundly ironic that the initial mishap with the BIS budget occurred as a result of the zealous recruitment of Romanian and Bulgarian students by private providers onto sub-degree courses, at a time when universities have been under intense scrutiny over their sponsorship of international student visas.

And having a friend like George Osborne may prove to be something of a mixed blessing: with lobbying George comes the need to educate his advisors about the complexities of the sector. He has promised to release universities from the student number cap but as yet has not indicated how this is to be paid for, when he is also committed to finding £7bn of tax cuts in the next parliament.

In his autumn statement he announced a number of HE related infrastructure projects, but equally we await with interest the outcome of funding decisions around REF 2014. However, possibly his most significant intervention on higher education policy came this week when wearing his hat as architect of the Conservative election manifesto. The Financial Times reports he has blocked a push by the Home Secretary, Theresa May, to have a manifesto commitment that would compel non-EU graduates of British universities to leave the country before applying for a work permit in the United Kingdom.

The Tier 1 post-study work visa was withdrawn in 2012 and the present policy is that the Tier 2 general visa allows companies to sponsor employees earning over £24,000 in a skilled role. Theresa May has proven herself to be a bête noir of universities, temporarily withdrawing Highly Trusted Sponsor status at several institutions and steadfastly refusing to remove international students from the net immigration figures despite such a change being the policy of all other parties, including UKIP.

She quotes figures from the ONS saying that of the 121,000 international students who came to the UK in the year to June only 50,000 left and that by the 2020s some 600,000 non-EU students were expected to enter the UK. Questionable as these figures might be, for a Home Secretary charged with delivering on a Conservative pledge to reduce net migration to the tens of thousands, universities present something of a problem.

Like Theresa May’s recent contretemps with Michael Gove over Islamism in Birmingham schools, this spat with Osborne has little to do with education and more to do with positioning for the inevitable post-election contest for the Tory crown. Of all the possible outcomes of the general election, a Conservative majority government is the least likely, according to the bookies. Even if the Tories were to form another coalition government, having failed to win a second election, David Cameron’s position would be in significant doubt and horse-trading over the Conservative leadership is a distinct possibility.

Theresa May’s seeming desire to expel graduates from the country needs to be understood in the context of a post-Cameron Conservative party sliding further to the right and towards a referendum on EU membership. Osborne’s riposte is both a shot across the bows of a potential leadership challenger and recognition after 5 years of patchy economic performance, of the damage such a policy could do to the UK economy.

The shift in post-study work policy since 2012 is clearly having an effect on the recruitment of international students in certain markets. According to HEFCE Indian and Pakistani student enrolments in English universities has halved since 2010. This is in the context of a 1% overall decline in international students entering postgraduate courses in 2012-13 (the first drop in demand since 1985), but a 2% increase on non-EU undergraduate enrolments. This slow down in demand is mostly attributable to visa restrictions and in particular the prospect of students being able to find employment in the UK after graduation.

In Australia graduates are eligible for a two, three of four-year post-study visa depending upon their highest qualification, the US now guarantees green cards for STEM graduates, and in Canada graduates can qualify for permanent residency. At the very least this puts British universities at a competitive disadvantage in the recruitment of international students. Commencements for international students in 2012-13 in Australia were up 7.4%; Canadian enrollments grew by 11%, and offers of admissions in the US rose 9% in the same year.

George Osborne is keen to protect a possible conveyor belt of well-trained, highly skilled talent for the British economy and believes that the Tier 2 earnings threshold strikes that balance. However, for UK universities whose budgets require the ongoing recruitment of high volumes of non-EU students the situation is even simpler. Post-study visa restrictions are making the United Kingdom an unattractive place in which to spend one’s full international fees. In this respect, at a time when other funds are being squeezed, current government policy is militating against a potential growth area for universities and the British economy more generally. International students contribute £10.2bn to the UK economy in fees and living expenses each year, according to the 2013 report International Education—Global Growth and Prosperity.

Theresa May’s position speaks to a contradiction at the heart of the Tory right. On the one hand, it is supportive of the labour deregulation and free-market economics that distinguish the UK economy from the neighbouring Eurozone, drawing wealth and investment from the global economy. On the other hand, it is surprised when this same influx of capital to the UK attracts migrant workers and international students to participate in that economy.

The Conservative right and UKIP seems to believe that it is possible to have unrestricted capital-led growth in the UK economy without that same growth attracting workers and students from overseas. They want all the benefits and privileges of globalization without any of the population mobility that necessarily goes with it. However, logic may not be their strongest suite. Their position is as much emotional as it is political. The least that one could say about it is that is damaging our universities’ ability to recruit international students. It is quite understandable that someone who spends £18K per year on his or her degree course might also want to work in his or her chosen country of study after graduation.

To insist that they must return to their country of origin is fundamentally to misunderstand the motivations of international students and dangerously over-estimate the intrinsic attractiveness and value of a UK university degree. It would seem that Theresa May believes that a market of student choice does not extend to non-EU students. The US, Australia and Canada will be the beneficiaries of such myopia.

The other political parties have yet to make their position clear on post-study work rights. NUS asked the All-Parliamentary Group on Migration Inquiry in to the Post Study Work Route, launched last year, to consider recommending that all non-EU international students be given the right to work, free from restrictions, for 12 months after study.

As we enter the uncharted territory of a post-election Conservative party, this issue is unlikely to go away. On the contrary it can only intensify as a site of contest between the interests of higher education and economic growth, and the anti-immigrant rhetoric that pervades the political spectrum from left to right. Much will depend upon where May, Osborne, and the parliamentary arithmetic stands in a few months time.

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