The lesson in Britain’s immigration figures

Irrespective of who forms the next government, immigration will remain an important issue, both as a driver of economic growth and its impact on Britain’s reputation as an open and

outward-looking nation. In light of this, yesterday’s latest immigration figures warrant closer inspection.

The Office for National Statistics (ONS) estimated that net long-term migration (which only includes those entering or leaving the UK with the intention of staying for more than 12 months)

was 212,000 over the year ending June 2019. Though it is true that there has been a gradual decline in net long-term immigration since 2016, the latest figures are still higher than in 2013.

There are two trends behind these net figures that policymakers should note.

Firstly, long-term immigration of EU, EEA and Swiss nationals into the UK has fallen significantly from around 300,000 in 2016 to just under 200,000 in the year ending June 2019. Over the

same time period, emigration of EU nationals from the UK also rose from just under 100,000 to just over 150,000; most significantly among the nationals of the eight eastern European

countries who joined the EU in 2004.

In spite of the government’s commitment to uphold the rights of EU citizens currently living in the UK, the UK’s image as a desirable destination for EU nationals has taken a hit. The

mistreatment of the Windrush generation has also added to the sense of insecurity that migrants feel in the UK more generally. Overcoming this sentiment will be a challenge for the next

government.

The second trend worth highlighting is that the gradual rise in the net long-term immigration of non-EEA citizens since 2013, surpassing that of EEA nationals in 2016, has largely been

driven by non-EEA international students. In the year ending June 2019, 157,000 non-EEA international students migrated to the UK for formal study, compared with just 74,000 non-EEA

nationals who migrated for the purpose of work.

The Home Office issued its highest number of Tier 4 student visas in the year ending September 2019 since 2011, of which 43 per cent and 11 per cent were issued to Chinese and Indian

citizens respectively. Both countries are experiencing fast levels of economic growth and a developing middle class. The next government may be able to capitalise on this trend to further

boost the demand for UK university education in these countries, while supporting the transition of these students into the UK’s labour market.

A report published last year by the Migration Advisory Committee (MAC) on international students in the UK found that in 2015, international students (both EEA and non-EEA) had an equivalent

UK export value of £17.6 billion (they are considered exports because they are bringing in money from abroad).

International students were also found to contribute positively to public finances, given their limited use of public services. The report estimates that on average, an EEA student

contributes £3,300 per year more to the public finances than the average UK student, whilst this figure was £5,100 for non-EEA students. Moreover, the higher fees paid by non-EEA

international students also help subsidise fees for domestic students and university research.

As for integrating international students into the UK’s workforce, it should come as no surprise that higher-skilled immigrants typically earn and contribute more to taxation that the

average taxpayer. A report commissioned for the Higher Education Policy Institute estimates that international students (both EEA and non-EEA) that graduated in the 2016/17 cohort, who

entered the UK workforce, will contribute £3.2 billion in tax contributions over the first 10 years after graduating.

But more fundamentally, these individuals are also drivers of productivity and innovation. The MAC report found that most international students, who obtain a work visa after their study,

move into STEM or business-related roles; areas it argued would be beneficial to the innovativeness of the UK economy, though it is difficult to measure these effects.

The UK is still stuck in a productivity rut, which has seen productivity grow at 0.2 per cent a year between 2010 and 2015, down from two per cent between 2000 and 2005. Targeted measures to

ease the integration of international students into the UK workforce could provide a catalyst for economic growth and greater dynamism at a time when the European continent (including the

UK) appears to be lagging behind much of the world. And even where international students do not go on to work in the UK and contribute to our economy, evidence suggests they form positive

attitudes towards the UK while studying here, which has benefits for UK soft power.

Some steps have been taken in this direction, with the government announcing in September that it would introduce a new Graduate Immigration Route for international students from summer 2021

onwards. This policy simultaneously boosts the appeal of the UK for international students keen to secure work in the UK already, increasing the UK’s export of higher education, but also

provides the UK with a supply of highly-skilled workers.

Yet this announcement should be seen as the UK catching up with its global competitors, rather than establishing itself as a leading destination for international students. Australia, Canada

and New Zealand already have post-study work visas in place and Germany, France and Ireland offer international students temporary residence permits to aid their securing a job. There is

significant scope to improve the UK’s offering to international students.

Yesterday’s immigration figures and the broader political context in which they sit should inform the next government’s priorities on reforms to the UK’s immigration policy. Once the

electioneering is over, it is vital that those in power take stock of the facts and design policy accordingly.

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