Out-Law News 2 min. read

London universities 'an export success story' as research shows international students generate £2.3bn for economy


International students studying at London universities are worth around £2.3 billion to the UK economy annually, according to new research.

Business body London First and PwC, the professional services firm, found that international students studying in London alone spend around £2.8bn annually in tuition fees and consumer spending, while generating health service and public sector costs of just £540 million. Their spending also supported 70,000 jobs in the capital, according to the report (56-page / 878KB PDF).

The vast majority of the current and alumni students from across London's universities surveyed as part of the research said that they would recommend studying in the UK to friends and family, while 60% said that they were more likely to do business with the UK as a result of their studies. However, more than a third of respondents said that the UK's immigration system negatively affected their university experience; while the vast majority said that they had found it difficult to secure work in the UK after completing their studies.

"International students are made to feel unwelcome because of anti-immigration rhetoric – and the fact that they are currently included in the government's net migration target," said Baroness Jo Valentine, London First's chief executive. "But students' expenditure here is a modern-day export: they pay substantial fees and contribute significantly in consumer spending."

"As a matter of priority, our new government should follow the lead of Australia and Canada and reclassify international students as temporary visitors, not migrants. It makes no sense to imply through classification and rhetoric that they are unwelcome, which is harming our universities' abilities to sell education to talented students around the world," she said.

The report's authors also call on the government to make it easier for international students to work in the UK for a few years after graduation, ideally by reintroducing the post-study work visa. This would be "good for UK universities, good for UK business, and good for Britain's long-term relations with the global business community when these graduates return to their home countries", according to the report.

The Conservative Party pledged further reform of the student visa system as part of its pre-election manifesto, including measures to clamp down on abuse and a further review of the sponsorship system. Research on behalf of Universities UK and think tank British Future last summer found that the majority of the UK public supported the removal of international students from official immigration figures, although United Nations rules do not exclude students from the definition of "international migration".

According to the report, almost 67,500 non-EU international students attended London universities in academic year 2013/14. They accounted for 18% of the total student population in London, and 22% of the UK's total international student intake. The research also found that only 12% of foreign students remained in the UK after graduation, with those that did earning an average of £19,000 a year.

"Notwithstanding the Home Office position on immigration, this survey provides evidence of the economic advantage of removing students from the net migration figure," said universities expert Gayle Ditchburn of Pinsent Masons, the law firm behind Out-Law.com.

"Further, the reason why so few students remain in the UK after graduation will be in no small part due to the difficulties that employers experience obtaining the appropriate work visas for international employees, thereby removing from our economy a pool of skilled graduates," she said.

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