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By BASF

University Towns Face Huge Economic Hit From Student Visa Curbs

Local leaders have stressed the importance of maintaining high levels of international students

5 min read

Changes to international student visa rules that restrict foreign students from bringing family members to the UK could hit the economy of university towns across the UK, local leaders have warned.

Earlier this week the Home Office confirmed that visas will no longer be granted to dependents of postgraduate students from outside the UK, with some exceptions being made for PhD students. Last year 135,788 visas were given to foreign students' dependents. Almost 500,000 student visas were given out in that time period, marking a 750 per cent increase from three years ago.

The new reforms proposed by Home Secretary Suella Braverman, which will come into force in January 2024, are part of the government's overall drive to reduce UK net migration, after figures hit a record high of 606,000 in 2022, according to the Office for National Statistics. 

But the government has been accused by local leaders of failing to consider the broader economic impact the policy could have on towns and cities which benefit from the millions of pounds brought in by foreign students and their families.  

Paul Blomfield, co-chair of the APPG for International Students, and Labour MP for Sheffield Central, whose constituency is home to thousands of students, said the curbs could only "adversely" impact the city. 

"International migration is worth £273million pounds to Sheffield central, it's very significant indeed," he told PoliticsHome.  

"The benefits of international students in Sheffield are clear, they provide a vital contribution to the local economy and to the university. Anything which undermines recruitment – and there is a real fear these measures will undermine recruitment – could only damage the financial position of the city."

Khalid Mahmood, Labour MP for Birmingham Perry Barr, also told PoliticsHome the new restrictions for overseas students could "only be a bad thing". 

Mahmood's constituency, in a relatively deprived area of the city, neighbours Aston University and Birmingham City University, both of which attract large numbers of international students to live in the area. 

"We have people coming to colleges who pay a significant amount of money for their university education. Proper and legal immigration boosts the country, and as a country we want to grow and we want to develop. People are going to suffer [if we curb the figures]," Mahmood said.

He believed Braverman's policy was playing to the Right of the Conservative Party and will not benefit the country as we have more than a million vacancies to fill. 

In the northwest of England, which is also home to several major universities, Liverpool City Region Mayor Steve Rotheram is concerned the government's new visa measures risk turning international students away from their patch.

“While we’re doing everything we can to make our region and its world class universities an attractive destination for international students, the government’s 'little England' mentality risks turning them away – and holding the country back," Rotheram told PoliticsHome.

"These students not only enrich our culture and grow our economy, but their contributions to our universities allow us to deliver a massive return to the Treasury year on year."

Post-industrial cities such as Preston, which was named as the most improved UK city in 2018, have become increasingly dependent on foreign students. The net impact of international students in Preston was £77million, according to figures from policy consultancy London Economics.

“We are a small city with top-notch infrastructure, offering excellent living standards to the student population. Vibrant, cultural and friendly with plenty to keep you entertained, Preston is a diverse and contemporary place to study,” Councillor Matthew Brown, Leader at Preston City Council told PoliticsHome.

Foreign students also make huge financial contributions to post-industrial cities such as Newcastle, Glasgow and Sheffield.

In Newcastle, they have contributed £1.8billion to the local economy. However, local Cabinet member for a Resilient City, Cllr Paula Maines, said students contribute more than “just money” and enrich the social fabric of the city.

“One of the great things about our country is the diversity and richness that immigration has brought over the years. Newcastle is a City of Sanctuary and is proud of its long history of welcoming people from all over the world. It would not be the city it is today without immigration,” Maines added.

A source from the leading Russell Group universities told PoliticsHome the topic of international students has become a "political issue". They called for students numbers to be dropped from the ONS figures as they do not reflect the “short term nature of migration”.

Professor of Economics at Kings College London Jonathan Portes said the high numbers of students coming to the UK is a “major economic benefit” and a success the government should be celebrating.

While he felt it was reasonable for politicians to be concerned about the rapid expansion of student dependents, he believed it is important to remember they “spend money here, cannot claim benefits and are not generally a major drain on public services”.

New figures from Universities UK suggest the economic benefit of international students rose from £31.3bn to £41.9bn between 2018/19 and 2021/22. Each of the UK's parliamentary constituencies is "£58million better off because of international students", according to the data.   

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