Letter to Stephen Gilbert MP on Student Visas from LSE Students’ Union. Part 2 of 3: Economic Effects
2. Negative net economic effect
In a Martin Rosenbaum BBC article of 14 April, it is disclosed that the Treasury—alongside free-market think tank Adam Smith—is dour on the effects of immigration cuts on the economy. The Treasury’s “broad argument is that cutting immigration of skilled workers would reduce the UK economy’s potential for growth. It also states that migrants tend to make a positive contribution long-term to the UK’s fiscal position.”
Students currently contribute around ?8 billion to the UK economy. That figure does not include the economic gains from students on a Post-Study Work visa, for which estimates are difficult to come by but logic would dictate is somewhere in the hundreds of millions to low billions of pounds in stimulus, plus taxes. If no argument from Section 1 on the impact of this proposal passing seems compelling, let it be this: The UK will be perceived as anti-student migrant, and the result will be a weaker UK economy.
Despite a gloomy speech from the Prime Minister on 14 April, qualified students do not come for a ‘free ride’. (That erroneous metaphor came from Mr Cameron’s misinterpretation of an airline’s free-flight advertisement while touring a British educational fair in India.)
To the contrary, students compete globally for scholarships, university places, and jobs afterward. Many do get jobs immediately afterward, though certainly not often with the possibility for ?40,000 within a year. They pay high taxes and create new links for UK firms around the globe. This soft power helps grow the economy and direct investment to the United Kingdom, as opposed to other English-speaking nations.
A different way of looking at the problem comes from the academic world of economics. The UK, unlike most continental European counterparts, functions under liberal market capitalism. By closing off its internal market to migrants who not just shore up service sectors but also college students and graduates who fill professional roles (often quite low-paid), the UK is actively undermining its own neoliberal model. This is all to say nothing of the reality of ‘soft power’, from which Britain yields untold benefits as seeming accessible to ambitious, smart young people from across the world.
The negative publicity generated by the immigration debate is already affecting student recruitment. LSE has collected data showing that Indian and Chinese students—financiers, engineers, and workers Britain needs for economic success—are discouraging younger peers from applying because of the withdrawal of the Post-Study Work visa route. Students may go to Australia, Ireland, Canada, or the United States; or they may simply find a university elsewhere among rapidly improving local options.
Part 1: Making the UK Unattractive
Part 3: Politically Driven
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