Coalition immigration policy costs UK economy £1billion per year

Theresa May

Various newspapers have been reporting the spectacular failure of the Tory promise to reduce net migration to tens of thousands by the election next month.

These reports all declare that net migration to the UK has risen in fact, due to consistent emigration figures and a recent increase in immigration. What none of these reports have noticed is the one group that has been negatively affected by Tory-coalition migration policy – foreign students. And they have failed to observe that this has been ripping up to £1 billion out of the UK economy on an annual basis. What’s worse is that the Tories are well aware of this but are rigidly sticking to their plan in a bid to appease their xenophobic supporters.

In February, the ONS released its final migration statistics quarterly report prior to the election:
PDF, Data in XLS format

This is important for the government because they had pledged to reduce net migration from 244,000 (year ending June 2010) to tens of thousands. Rather than tens of thousands, the net migration stands at 298,000 (year ending September 2014) – it has increased by around 50,000*. Looking at the immigration statistics we can see that work related immigration has risen from 194 to 271,000& , immigration by people ‘accompanying others’ has risen from 78 to 90,000% and immigration for ‘other’ reasons has risen from 44 to 49,000$. The only drop in immigration has been where no reason is stated (36 down to 23,000£) and a drop of 43,000 in those coming for formal study (235 down to 192,000@).

These increases and the decrease in foreign students can be seen in the following figure:

Line plot of ONS immigration stats by reason
Shifting patterns of immigration to UK during Coalition office 2010 to 2015. The only meaningful drop in immigration has come from formal study (red)

This drop in foreign students should be of concern to us all. It was certainly of concern to David Willetts when he was Universities and Science minister, and Vince Cable when he was business secretary back in 2013 when they begged and argued with the Home Office to have students removed from the migration targets – but Theresa May has instead boasted about reducing student visas

The reason for this being a concern rather than a smug, triumphant boast (other than the stench of xenophobia that haunts these policies) is that foreign students bring lots of cash to our economy. And I mean shed loads. Sheffield University released a report in 2013 that estimated their 8,222 foreign students (total foreign students in all of Sheffield) would bring £136.8 million to the local economy. They noted that because students are young, often single, generally without children, they take very little from local services in return. Foreign students are a boom for universities and the local economy.

Those figures are limited to Sheffield but ought to extrapolate fairly well for the rest of the country. Sheffield is a fairly average town, not part of the rich South East, not out on the impoverished fringes etc. Simply extrapolating from Sheffield’s 8,222 students, to 43,000 students which is the drop in student migrants since the Coalition took over, leads to a figure of £715.45 million, lost to the UK economy, simply for the year ending September 2014.

It is worth noting that the figures had spiked in the last quarter to mean the relative loss of students was only 43,000. The more normal figure during coalition policy is a loss of around 60,000 students (see student migrant figures of around 175,000 for all of 2013 and the first half of 2014). Thus <b>for a large part of their term, the coalition has lost the economy £998 million or just shy of £1 billion per year</b>.

Is that something worth boasting about? I doubt our fiscally struggling universities think so, nor will the local businesses around our university towns.


    References for use of ONS data

  • * data taken from Table 1, Column B, Rows 129 and 146
  • & data taken from Table 2, Column E, Rows 41 and 59
  • % data taken from Table 2, Column L, Rows 41 and 59
  • $ data taken from Table 2, Column P, Rows 41 and 59
  • £ data taken from Table 2, Column R, Rows 41 and 59
  • @ data taken from Table 2, Column N, Rows 41 and 59

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