MPs warn of £3.6bn loss from student visa changes

26 Jul 11
Changes to the eligibility rules for student visas could cost the UK economy £3.6bn and damage the nation's economic recovery, MPs have said.

By Richard Johnstone | 26 July 2011

Changes to the eligibility rules for student visas could cost the UK economy £3.6bn and damage the nation’s economic recovery, MPs have said.

The Home Affairs Select Committee today highlighted concerns over the lack of an evidence-based approach to student visas policy, following the government’s announcement of changes in May.

The reforms included changes to eligibility criteria so that foreign students wanting to study at degree level need to speak a better standard of English, and restricting the time that can be spent on a student visa from a potentially unlimited period to five years.

These changes are expected to cut the number of students arriving in the UK on visas by up to a quarter or around 80,000.

In their report, Student visas: follow–up, the committee criticises the government’s failure to publish an impact assessment detailing the cost of the new policy until 12 weeks after the changes were announced.

The late publication of the assessment, which stated that the changes could cost the economy as much as £3.6bn, led the committee to conclude that the government failed to establish a solid evidence base for reform.

The projected losses, over four years, include £2bn in reduced output from students and their dependants who can no longer come to the UK. The assessment also concluded that around £1bn would be saved from the changes, mainly through a reduced cost to public services of £840m.

Committee chair Keith Vaz said that MPs was ‘disappointed’ that the impact assessment was delayed and was concerned that the Home Office still does not take evidence-based policy as seriously as it should. He called on the government to take measures to ensure that this situation does not recur.

‘The home secretary’s dismissal of the impact assessment is very disappointing. We reiterate the need for an immigration policy which is both evidence-based and does not adversely affect the British economy,’ Vaz said.

Immigration minister Damian Green said the student visa changes were introduced after full and extensive consultation. ‘The extent of the crisis which this government inherited in the immigration system meant that tough early action was necessary,’ he said.

The National Union of Students said that the report showed that ‘ministers' recklessness and knee-jerk policy making risked rendering the UK economically, socially and culturally poorer’. 

‘Despite warnings from other ministers, the business community, students, as well as the education institutions who have seen their funding slashed, the Home Secretary has pushed through changes to visas in order to fulfil rash pre-election promises,’ said NUS international students’ officer Christina Yan Zhang.

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