How badly would cuts to international student visas hurt UK city economies?

Coventry is one of the cities that would be hit hardest by student visa cuts. Image: cmglee/Wikimedia Commons.

News that the government is looking to halve international student visas will no doubt be a concern for the higher education sector, and to those worried about the UK’s poor export performance. But it’s also likely to have big implications for a number of cities across the country.

Any restriction on visas, if applied tomorrow, would apply only to those students outside of the EU. However, this may change when the UK exits the EU, and so in the following analysis we look at all international students to look at the wider effect it might have.

In 2014-15, there were around 440,000 students from abroad studying in the UK – one-fifth of all students at UK higher education institutions (not including the Open University). Chinese students made up by far the largest share of these students, accounting for 20 per cent of all international students. To put this into perspective, Indian students made up the second biggest group of foreign students, accounted for 4 per cent in total.

Of course, these students were not evenly distributed across the UK, with London unsurprisingly the most popular destination, attracting a quarter of international students. However, as a share, Coventry had the largest number of foreign students – the table below shows that almost a third of those studying in the city were from outside of the UK. As was the case in most cities, China was the most common country of origin, with a quarter of all foreign students in Coventry being Chinese. Ipswich, on the other hand, had the lowest share, with just 2 per cent of students from abroad.

Source: HESA Admissions. Note: Cities with campuses of fewer than 500 students were excluded from the analysis.

Cuts to student visas could have big implications for cities such as Coventry, Exeter and Sunderland. Universities UK estimated that foreign students were worth a total of £10.7bn to the UK economy in 2011-12, through fees and money spent by the students in their time here.

Taking this figure and applying it to the location of foreign students would mean that they were worth £380m to the Coventry economy, £123m the Exeter economy and £83m to the Sunderland one. In Coventry this was equivalent to over 6 per cent of its total output in 2011-12.

The current political climate means that talking about visa restrictions is popular with the electorate. But such decisions will have an economic impact too, and may well hurt the very places the government is attempting to help through its place-based industrial strategy. And this, surely, would be counterproductive.

You can see more analysis on migration and student and new graduate mobility in the Centre for Cities’ Great British Brain Drain report.


Paul Swinney is senior economist at the Centre for Cities. This article was originally published on the think tank’s blog.

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Worried Guildford will be destroyed by Chinese trains? Then you might not be very nice

A South West Train at Waterloo. Image: Getty.

Despite the collapse of everything else that more-or-less worked in 2008 Britain, before the Hunger Games years began, some things remain constant. One of the things that’s near-mathematical in its constancy is that, when a new train contract is let, people on both sides of the political spectrum will say extremely stupid things for perceived partisan advantage.

This week saw the award of the contract to run trains to the south west of London, and unsurprisingly, the saying stupid things lobby was out in force. Oddly – perhaps a Corbyn-Brexit trend – the saying of egregiously stupid racist lies, rather than moderately stupid things, was most pronounced on the left.

As we’ve done to death here: rail in Great Britain is publicly run. The rail infrastructure is 100 per cent publicly owned, and train operators operate on government contracts, apart from a few weird anomalies. Some physical trains are owned by private investors, but to claim rail isn’t publicly run would be like claiming the NHS was the same as American healthcare because some hospital buildings are maintained by construction firms.

Every seven years or so, companies bid for the right to pay the UK government to operate trains in a particular area. This is the standard procedure: for railways that are lossmaking but community-important, or where they are within a major city and have no important external connections, or where there’s a major infrastructure project going on that’ll ruin everything, special measures take place.

The South Western England franchise is not one of these. It’s a profitable set of train routes which doesn’t quite live up to its name. Although it inherited a few Devon and Dorset routes from the old days, its day job involves transporting hundreds of thousands of Reginald Perrins and Mark Corrigans from London’s outer suburbs and Surrey, Hampshire and Berkshire’s satellite towns to the grinding misery of desk jobs that pay a great deal of money.

(If your office is in the actual City of London, a fair trek from the railway’s Waterloo terminus, then you get the extra fun of an extra daily trip on the silliest and smelliest Tube line, and you get even more money still.)

Anyway. The South Western concession went up for auction, and Scottish bus and train operator First Group won out over Scottish bus and train operator Stagecoach, the latter of which had run the franchise for the preceding 20 years. (Yes, I know 20 isn’t a multiple of 7. Don’t ask me to explain, because I can and you wouldn’t enjoy it.)

First will manage the introduction of a bunch of new trains, which will be paid for by other people, and will pay the government £2.2bn in premiums for being allowed to run the service.

One might expect the reaction to this to be quite muted, because it’s quite a boring story. “The government does quite a good deal under which there’ll be more trains, it’ll be paid lots of money, and this will ultimately be paid back by well-paid people paying more train fares.” But these are not normal times.


First Group has decided for the purposes of this franchise to team up with MTR, which operates Hong Kong’s extremely good metro railway. MTR has a 30 per cent share in the combined business, and will presumably help advise First Group about how to run good metro railways, in exchange for taking a cut of the profits (which, for UK train franchises, tend to be about 3 per cent of total revenue).

The RMT, famous for being the least sensible or survival-oriented union in the UK since the National Union of Mineworkers, has taken exception to a Hong Kong company being involved in the railways, since in their Brexity, curly sandwich-eating eyes, only decent honest British Rail has ever delivered good railways anywhere in the world.

“A foreign state operator, in this case the Chinese state, is set to make a killing at the British taxpayers’ expense,” the RMT’s General Secretary Mick Cash said in a press release.

This is not true. Partly that's because a 30 per cent share of those 3 per cent profits is less than 1 per cent of total revenues, so hardly making a killing. Mostly, though, it’s because it’s misleading to call MTR “state-owned”. While it’s majority owned by the Hong Kong government (not the same body as the central Chinese state), it’s also partly listed on the Hong Kong Stock Exchange. More to the point, this a really odd way of describing a transport authority controlled by a devolved body. I wouldn’t call the Glasgow subway “UK-state owned” either.

So this fuss is intensely, ridiculously stupid.

There’s an argument – it’s a bad argument, but it exists – that the entire UK rail system should be properly privatised without government subsidy.

There’s an argument – it’s a slightly less stupid argument, but it exists – that the entire UK rail system should be returned to the public sector so we can enjoy the glory days of British Rail again.

The glory days of British Rail, illustrated in passenger numbers. Image: AbsolutelyPureMilk/Wikipedia.

But to claim that the problem is neither of these things, but rather that the companies who are operating trains on the publicly run network are partially foreign owned, makes you sound like a blithering xenophobe.

In fact, if you think it’s reasonable for a Scottish company to run trains but not for a Hong Kong company to run them, then that's me being pretty bloody polite all things considered.

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