Overseas students contribute £2.3bn a year to UK, says study

The Financial Times, 18.05.15, international students make a net contribution of £2.3bn a year to the UK economy in London alone and support 70,000 jobs in the capital, according to research published just as ministers are considering stricter visa curbs.

Researchers found that international students in London contribute £2.8bn a year to UK gross domestic product through tuition fees, subsistence spending and income from visiting friends and family members. This is offset by an estimated £540m cost to public services, such as the NHS, of their stay in Britain. Foreign students, however, have no recourse to welfare benefits and do not compete for housing with other Londoners.

Despite Home Office concerns about students overstaying on their visas, the report calculates that only 12 per cent of foreign students remain in the UK after they graduate. Those who do are earning average salaries of £19,000 and contribute £9m a year in income tax and £17m in national insurance payments.

Julia Onslow-Cole, head of immigration at PwC Legal, said there had been a “dearth of data” about the value that foreign students bring.

“Our report blows out of the water any suggestion that their effect on the economy is marginal,” she said. At a time when ministers were looking for growth, they would not want to “choke” successful sectors such as higher education. “A strong economic recovery will provide a solid basis to tackle wider immigration concerns,” Ms Onslow-Cole added.

According to the report, the benefits of attracting foreigners to study in London spread beyond the Exchequer: 60 per cent of students said they were more likely to do business with the UK as a result of studying here.

But the difficulty of navigating the immigration system also prompted some negative responses from those surveyed. More than a third of overseas students said problems with visa applications had undermined their experiences of studying in the UK, and many of them complained about the difficulty of securing a visa to work here after graduation.

Baroness Jo Valentine, chief executive of London First, said she was concerned that visa restrictions — such as the end four years ago of the post-study work visa — were “turning people off” coming to the UK.

“We remain opposed to the net migration target, on the grounds that it is manifestly just a number,” she said. “It is not founded on any sort of analysis of what the net situation has been and should be . . . The endgame needs to be valuing students who want to come here for genuine reasons and contribute in many ways to higher education, but are absolutely vital to [the UK’s] long-term relationship with the rest of the world.”

Read the full article The Financial Times