Last week, after the 2022 immigration figures were revised upwards (again) to truly mind-boggling levels, I wrote that the reason successive Conservative prime ministers had failed totally to get a grip on the number of people coming here was because doing so would be hard.
It’s not enough to stick a right-winger in the Home Office with an impossible task; any coordinated effort to reduce this country’s reliance on imported labour would need to be coordinated across – and indeed, imposed upon – at the very least such departments as Education, Business, and the Treasury.
Moreover, it would also entail developing a deep structural understanding of the British economy and the factors which keep pushing it in this direction, which would not only be very hard work in itself, but applying that learning would then involve confronting hard choices and taking on vested interests. Even more hard work.
Professor Rob Ford of the University of Manchester, in a reversal of the usual relationship between journalists and academics, managed to make the same point in a single tweet:
“Immediate and massive action” would mean huge cuts to one or more of the following groups, who drive most of the inflows:
— Rob Ford (@robfordmancs) November 23, 2023
Foreign students whose fees most universities rely on
Migrant workers in the NHS and social care
High skilled workers in other sectors https://t.co/dIDfnXqBRX
He’s right. If a future Conservative government (there seem no grounds to expect much of this one) was serious about reducing immigration, it would need a plan for at least one of these areas. It would also need the political will, and sufficient tolerance from the electorate, to endure the short-term costs of any transition.
Such strategies are by no means impossible to imagine; we sketched out in broad strokes some of the possible measures a future government might apply back in May. But let’s have a closer look at how, and why, the Tories might slay one of Ford’s three giants. I sketched the problems with regard to the NHS in June, so – what about universities?
Why do universities drive immigration?
The basic problem is simple enough: since Tony Blair, successive governments have overseen a vast expansion in higher education – and proven typically reluctant to confront the reality of paying for it. Tuition fees, like near everything in this country except pensions, are not index-linked to inflation. Thus, the £9,250pa maximum fee now represents less than £7000 in 2013 pounds, around when the Coalition hiked fees to their current face value.
Result? Universities make a loss on home students. The Russell Group puts the figure at £2,500 per student per year, and “conservatively project” that this will rise to £5,000 per student per year under current conditions.
This obviously creates perverse incentives. One is that it seems to militate strongly in favour of universities prioritising “classroom-based subjects” (average annual cost per student: £10,500) over STEM (£14,000) or medicine (£23,500).
But another is that universities have a clear incentive to bring over more and more international students, who pay uncapped fees, to make up the funding shortfall. There also seems to have been significant growth in the number of students bringing dependents in with them; per the Office for National Statistics:
“In YE June 2019, dependants accounted for 6 per cent of non-EU student immigration and 37 per cent of non-EU work immigration, which increased to 25 per cent and 48 per cent, respectively in YE June 2023.”
Is this a problem?
Well. On the one hand, it’s a lot of people: there were just shy of 680,000 international students in the UK in 2020/21 (presumably excluding dependents), according to the House of Commons Library. That’s a larger population than Glasgow. It’s also responsible for a lot of arrivals: almost 382,000 in 2020/21.
On the other hand, just eye-balling the relatively small difference between the overall population and annual entrants would seem intuitively to bear out the Migration Observatory’s claim that, at least as of 2022, “most non-EU students leave the UK after their studies”. (It remains to be seen if this pattern will continue to hold in the new conditions ushered in by the Johnson Government, which have induced a surge in non-EU immigration.)
That people leave doesn’t necessarily mean there isn’t a problem; that’s still a substantial city’s worth of extra people dumped into a chronic housing shortage, for starters. But it is obviously quite a different problem to hundreds of thousands of people a year using university as a pathway to settle here; the cost/benefit calculation (and there are benefits) is necessarily different.
(It remains, however, fatuous to describe universities straightforwardly as an export and compare them to, say, German auto manufacturers. Germany exports cars, it does not import drivers.)
Beyond the numbers
Yet if the above perhaps highlights the shortcomings of focusing purely on the headline net inflow numbers, there are several counterpoints. First, those headline figures are politically salient, at least to Conservative voters.
Second, that if the Russell Group’s modelling is accurate, and the electorate doesn’t discover a sudden enthusiasm for actually paying for things, then universities’ reliance on the mass import of international students to cross-subsidise domestic students is only going to ratchet ever upwards. How many Glasgows is it worth to keep the sector afloat – two? Three?
Third, that this phenomenon could be problematic beyond the narrow question of immigration per se. For example: what if the system it props up is actually a bad system?
There isn’t really scope in this article to set out in full the case against the post-New Labour explosion in tertiary education; I’ve done so before, both here and elsewhere, although it would probably be worth doing again. But the basics are simple enough.
For starters, going to university imposes on individuals real costs (both financial and opportunity) for very uncertain returns; only a few degrees seem to offer a guaranteed graduate premium. Moreover, such premia as appear in the figures may in part artificial, artefacts of employers using a 2:1 to gatekeep what would once have been school-leaver jobs.
For example, Bridget Phillipson’s plan to make childcare a graduate profession would increase the benefits of having a relevant degree, but it would do that by locking people perfectly able to look after children out of the sector. This would restrict labour supply, push prices up even further… and then presumably stimulate even more demand for degrees!
Next, mass tertiary education is supposedly essential for skills, yet we have a skills shortage that demands the constant import of workers; it also isn’t obvious that three years on a low-contact course is a remotely efficient way to actually impart employment skills.
Then there’s the fact that whatever benefits a degree does confer are scooped up by business for free when they hire a graduate (and restrict their hiring to graduates), whilst the cost of generating those benefits falls on young workers (via loan repayments and usurious marginal tax rates) and the taxpayer (via the unpaid loan book) – an expensive way to let employers externalise the cost of basic training.
One could go on. But the above is hopefully sufficient to illustrate the point that excessive immigration should not (or at least, not just) viewed as a problem in itself, but as a symptom of dysfunction in other parts of the system. It cannot be tackled in isolation, because without understanding what parts of the status quo are propped up by the mass import of people, and how, and why, any move to cut headline numbers is going to run aground on the consequences of so doing.
Tackling that dysfunction would require stern political direction to such departments as the Treasury, Business, and (in this case) Education. If they are left simply to maintain the current system and shout down the Home Secretary in Cabinet, the numbers will only ever go one way.