My Lords, I listened with great interest to the debate on this amendment in Committee on 10 March. Unfortunately, I was unable to stay for all of it, although I read it carefully in Hansard, and so was not able to take part, but I would like to make a brief contribution today.
Winding up for the Opposition on that occasion, the noble Lord, Lord Stevenson of Balmacara—that demon of the squash court, as he keeps saying—had some fun at the expense of my noble friend Lord Bourne of Aberystwyth, when he said:
“I congratulate the noble Lord, Lord Bourne, on putting his head above the parapet. Although I think he picked up some of the arguments, I did not think his heart was entirely in it”.—[Official Report, 10/3/14; cols. 1607-08.]
I intend to put my head above the parapet this afternoon, and I have to say that my heart is entirely in it.
Overseas students make an exceptionally valuable contribution that enriches our university life, but as I shall explain, I have concerns about scale, about leakage at the end of courses, and various consequent impacts on our settled population. Further, I think the extent of the beneficial impacts, adduced by various briefings we have had, are somewhat overstated.
I begin by following my noble friend Lady Williams of Crosby in talking about the briefings we have had, some of which have been quite cataclysmic in tone. They do suffer, in certain instances, from mixing absolute
numbers and percentages. It is perfectly possible to have an increasing absolute number and a declining percentage. Indeed, if one looks at market share, as some of the briefings do, it is almost certain that the UK will have a declining market share in an era when global university education is rising rapidly in parallel with people in the UK wanting to study overseas. In addition, as the UK has a historically high level of overseas students and a relatively small population in world terms, our market share is almost certainly bound to be declining.
More importantly, there have been attempts, in my view, to ascribe all the changes in student numbers to the proposals that we are discussing in this Bill. This is fanciful. There is a host of other reasons that influence people’s decisions on where to study—of those, notably, cost. Indeed, there was an article in the Times yesterday with a headline that suggested changes in the system were deterring students, but when you got into the meat of the article it was actually about cost. The piece mentioned cost only in sterling or Euro terms, failing to take into account the other great part of the cost—changes in the exchange rate. A year ago $1.50 bought you £1; today you need $1.66, so if you are a dollar-based student you are facing an increase of 10% in the costs of studying here in the UK. As regards India, which is an even more important market, as many noble Lords have said, a year ago 83 rupees bought you £1; today you need 100—a 20% increase in costs to a student from India.
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Having thus far been somewhat disobliging to the noble Lord, Lord Hannay, and his supporters on this proposal, I support them strongly in one respect: that is, their request that student numbers be broken out of general migration statistics in the way to which the noble Lord referred. Wherever one stands on this issue, clarity and transparency can only help our debate, so I express the fervent hope that my noble friend on the Front Bench has managed to persuade the Home Office of the wisdom of the noble Lord’s approach. I was a member of the committee of the noble Lord, Lord Howell, on soft power, and students are undoubtedly a specialist category. We really need to show them separately to make sure that we are all arguing from the same place on the hymn sheet.
In debate in Committee, I discerned two major philosophical themes attacking the Government’s position. The first is that it is in our national economic interest not to limit—but to maximise, some might say—the number of foreign students. It is certainly true that in the short term, the fees that foreign students pay help the universities. The noble Baroness, Lady Warwick, referred to this. The money that those students spend on living expenses also help the local communities in which they exist, although one could argue about whether students are big spenders. There are also costs to the state and the community, which are in part the reason for the Government’s amendments and the discussions we are having today.
However, this argument goes further and claims a long-term economic benefit because of the cultural and other links established at university. In my view,
this argument is, at best, not proven. Let us take the case of India, a country which has featured much in our debate and from which we have had many students over many years. It is a country with long historical links to the United Kingdom: accordingly, it is one which would be expected to have the best long-term economic dividend for us. Yet if you examine Indian import statistics when broken down by country for 2011-12—having looked at the numbers, that is not an unusual year—you will find that China’s imports are the largest at 12%, followed by some Gulf states at about 8%, which was probably oil, the USA at 5.2%, Switzerland at 4.6%, Germany at 3% and the United Kingdom at 1.6%. So we are exporting about a third of what the United States does and about half of what Germany does.
I therefore find myself forced to the conclusion that the issue of creating long-term economic advantage by bringing students here may well be yesterday’s argument. In a global world, having studied at a UK university may help at the margin but people buy goods and services that are competitively priced, delivered on time, perform well and are properly resourced as regards after-sales service.
That was the first plank of the argument against the Government but the second has an altogether loftier aim: that we have a duty to export our values to the world. The noble and learned Lord, Lord Woolf, made that point very fairly in his speech in Committee about the importance of the rule of law, and he is of course absolutely right. Development experts tell us that property rights and the rule of law are essential preconditions for a country’s development. However, that lofty and indeed worthwhile aim can be achieved only if the students who come here return to their country of origin. We know that there is leakage. How much leakage there is, we do not know precisely and will not know until our e-border system is up and running but my noble friend on the Front Bench pointed out, again in Committee, that in 2013, of the 124,000 non-EU students who came to this country, only 49,000 left it.
Some noble Lords, such as the noble Baroness, Lady Williams of Crosby, make the point that it is entirely right and fair that this country should cream off the brightest and best students from non-EU countries. I ask those noble Lords just to bear in mind the potential drawbacks to that approach. In an increasingly interconnected world, we all have an interest in global stability. Stable societies emerge because of leadership in government, law, medicine, engineering and so on. If we encourage such potential leaders to come and study here, and then stay here, there may be some economic benefit to us as a country in the short term but there may be long-term political disbenefit.
Finally, I ask those who argue this to consider the impact of increased numbers of foreign students on our settled population. I quote from a Higher Education Commission inquiry into postgraduate education, on which my noble friends Lord Norton of Louth and Lord Boswell of Aynho served. It said:
“Much of the recent increase in postgraduate student numbers is due to rising numbers of international students. Postgraduate enrolments have increased by more than 200% since 1999, compared to an increase of just 18% for home and EU students. The
Commission is concerned that this increase masks stagnation in the qualification and skill level of the home-domiciled population. We need an emphasis on up-skilling the UK population, ensuring that British students are able to compete in the global labour market”.
I conclude by saying that of course we should attract international students to study here, but we need to do that with realistic aims in mind.