When is an immigrant not an immigrant?

This HEPI blog was kindly authored by James Pitman, Chair of Independent Higher Education and Managing Director, UK and Europe for Study Group.

The definition of an immigrant is no longer an abstract question for politicians and policy makers, or indeed for university and college leaders. In fact, you could argue that at stake is nothing less than the sustainability of the UK higher education sector, the nation’s fifth largest export sector, second biggest net contributor to the UK’s balance of payments and probably its most important source of soft power. The UK’s largest fiscal contribution to what was once known as ‘levelling up’ (now seen as ‘regional economic renewal’) is also dependent on this question, plus some £12 billion in desperately needed taxes that fund hungry public services.

As in many countries around the world, the number of immigrants coming to a country matters greatly to the population, for a host of reasons from identity to strain on services and housing on the one hand to skills and income creation on the other. But the dictionary defines an immigrant is ‘a person who comes to live permanently in a foreign country’, and there are several groups of people that come to the UK with no intention of staying permanently, nor do they access the public services that the population is particularly concerned about and these make up the context for the question.

The first significant category is tourists. In 2023 tourists visiting the UK generated £31.1 billion and accounted for 292.9 million bed nights. The implication of this is that on an annualised equivalence basis there were some 800,000 full-year tourist equivalents permanently in the UK.[1] Those 800,000 did of course use some services, such as transport, but they do not have access to the public services that the population is most concerned about, and the majority are grateful for the injection of funds and jobs they bring with them. So the public is generally supportive of this particular temporary guest, recognises that their spending is significant, they sustain vital sectors of the economy such as culture and hospitality and go back home generally well-disposed towards the UK.  We don’t hear calls to restrict the tourism industry within the context of immigration numbers.

This brings us to the second significant category of temporary visitors — international students.  The arguments here are more nuanced, because some students do stay after their degree studies to work, but the vast majority (over 80%) leave immediately after the completion of their studies and never have any intention to become a full immigrant.

Furthermore, the compliance record of the sector is very strong. There is some abuse, as there is in any system, but education providers are keen to work with government to root this out and minimise it. In 2021/2 there were some 680,000 international students in the UK, and the cohort commencing their courses in that year will contribute a net impact of £41.9 billion over the period of their studies. There simply is no equivalent inward investment pouring into economies not only of the great metropolitan centres but almost every city and region across all four of the nations that make up our United Kingdom.

There are many areas of our society that benefit and costs are not what some imagine. In January of this year, for example, the Immigration Health Surcharge was increased by 66% to £776 per student per year.  This far exceeds the demands of this typically healthy population on our public services and the contribution to the NHS by every international student now accounts for over £500 million per year. It is now possible to show with some certainty that the contribution to the NHS by this surcharge outweighs the use of NHS services by this young demographic.

Beyond this, a significant number of international students, who may be investing up to £120,000 in their studies in the UK, come with full private health insurance.  If you accept that international students more than cover their NHS use directly via the immigration health surcharge, the consequence is that the £7.7 billion share of general taxation arising from the economic value of the sector is a sum that the NHS would not have if international students did not come to the UK.

There are other vital ways the UK benefits by hosting international students. Over many years the contribution from international student fees to universities was used to subsidise research and thus maintain the competitiveness of the UK higher education sector and contribute to the public good that research ultimately often brings. TRAC data shows UK university research is cross-subsidised to the tune of £1 in every £4, making international students one of the largest, if least visible research funders in the country.

Now though it isn’t just research which is being cross-subsidised but domestic tuition. With undergraduate fees capped for nearly a decade, their real value has plummeted as inflation has risen.  This dependence is an unsustainable position.

So what about post-study work? It is true that international students do have an opportunity to stay in the country for two years on the Graduate Route and that the post-study work option is critical to attracting international students from many countries, in particular from many in South Asia and Africa.  But we shouldn’t forget that this exists within a globally competitive context. In comparison to other traditional study destinations, this offer is relatively weak. Research from IDP earlier this year showed that 42% of international students would switch their study country destination if the post-study work option was reduced. The last government’s rhetoric about the future of the Graduate Route further destabilised confidence, although that of our new Education Secretary is most welcome to correct misunderstandings.

So what is the fear of the critics? There have been accusations that students progressing onto the Graduate Route gain employment in non-graduate roles, an option which is entirely legitimate under the rules of the scheme. Should we worry? The evidence says no. International students start from a position of disadvantage having no network to leverage in their hunt for jobs.  With many studying in priority category levelling up areas, where the university is the main employer, the opportunities are restricted and, just like domestic students, there are many valid degrees that do not easily provide access to jobs that pay at the levels required — the arts being an obvious example.

Yet we need to consider the economic impact in the round. Because international students are legally barred from accessing many public services such as education, housing (students are generally accommodated on university campuses or in purpose-built student housing), social protection and already pay for the NHS through the immigration health surcharge, any students working in the Graduate Route can be seen as effectively paying income taxes/NI at double the rate of an equivalent domestic worker, because they can only access half the services that their taxes pay for (that includes policing, defence, transport, interest on the national debt etc).  And so the reality is that every international student working in the Graduate Route is subsidising the UK taxpayer. Furthermore, as HEPI research has demonstrated, many international students get jobs in skills shortage areas.

So, let’s come back to the question; can international students be deemed to be immigrants if they have no intention to immigrate except for those who stay on to work on the Graduate Route or on a standard work visa?

My answer is that we urgently need to consider the evidence and revise our categories. In many respects, overseas students are more like tourists and the general public is similarly well disposed to international students.  Given that their access to public services is extremely limited and that they are now restricted from bringing any dependants with them, any argument that they should be counted as immigrants for public services policymaking purposes seems far-fetched.  This argument for a more transparent categorization is eloquently made by Lord Willetts in the recently published Opportunity, growth and partnership A blueprint for change from the UK’s universities, from UUK.

The technical reason international students are currently counted as immigrants for the purposes of the Net Migration Numbers is that the UN definition of an immigrant is anyone who spends more than 12 months in a foreign country. Yet it is clear that, although the UK may have to report numbers to the UN, for the purposes of counting the number of people who come to the UK with the intention of staying permanently and availing themselves of the public services that are available to the citizens of the UK, international students that intend to leave after their studies should not be counted — they are not immigrants in the ways that demand policy constraint, and they should not be caught up in the numbers the government is seeking to reduce.

There are some in the higher education sector who believe that the real reason that the UN definition was grasped so firmly by some in our last government was to facilitate ‘dog-whistle’  distraction politics on the topic of immigration. International students don’t vote and the last government was not well disposed to the higher education sector. As Alex Sobel, MP for Leeds Central, a constituency with a high number of international students, said at a recent HEPI event at the Labour Party Conference, international students are really just ‘Education Tourists’  and valuable ones at that.

So now we see an opportunity to rethink and redefine. The new government has been making positive statements about international students and we can particularly thank Bridget Phillipson, the new Education Secretary, for that. Now warm words need to be turned into concrete action.  Let us hope that the new government reviews the evidence and takes a more sensible approach for the good of the UK and makes the change to only count immigrants who are actually immigrants.

[1] Full year tourist equivalent (FYTE) is a concept designed to derive a number of theoretical permanent tourists in a year.  It is similar in concept to Full Time Equivalents in employment.  By taking the total bed nights of all tourists visiting the UK in a year and dividing by 365 days, you can derive an approximation of number of aggregated tourists or FYTEs present through the year.