UK immigration: International students put £2.3bn into the London economy

Billy Ehrenberg
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The report found that students support around 70,000 jobs in the capital (Source: Getty)

The contribution of foreign students to London’s economy is “overwhelmingly positive,” according to a report by London First.

The report, entitled “London Calling: International students’ contribution to Britain’s economic growth,” goes some way to debunking fears about international students overstaying their welcome and their cost to the national coffers. What is more, the report contradicts Theresa May's stance before the election - hinting at legislation to restrict net student immigration to zero.

The figures

The data suggests London’s international students contribute an annual average of £2.3bn to the capital's economy - after £540m has been taken off for public services, including the NHS.

There are around 100,700 international university students in London, or 27.4 per cent of the total and 42 per cent of all postgraduate students. 27.4 per cent of undergraduate students in the capital come from abroad.

What is more, the report found that students support around 70,000 jobs in the capital, both through their fees and the money they spend whilst in the country.

Some fear education is being used as a way for immigrants to enter the country by legitimate means and then remain here for other reasons. However, the data shows only 12.5 per cent of students stay after their courses finish, and, what is more, the average international student earns a salary of £19,000 per-annum after graduation, with the combined income tax contribution being £9m and national insurance contributions £17m.

Future business people studying in the UK has other benefits for the economy too. The experience of British culture and values makes it more likely international students will do business with companies in the UK after leaving. Of those surveyed, 60 per cent said they’d be more likely to deal with Brits after experiencing the UK’s culture. The British education system was also praised in the report – 60 per cent of those asked viewed their career prospects as having improved as a direct result of having studied in the UK.

Why it’s interesting

The report flies in the face of Conservative rhetoric: in the run up to the General Election, home secretary Theresa May hinted at zero net student migration being enforced by law. The report shows this would be detrimental to the economy.

As well as debunking fears about student immigration, the report also suggests ways for the government to address some of the issues driving voters' concerns.

The authors suggest the government enter into a “proper debate” about the UK’s immigration policy, which should “welcome those who contribute economically to our country”.

It outlines three ways in which the government can improve the way it deals with student. The first is to improve the collection and use of immigration data, “so that we can see the real facts on inward and outward flows”.

The second is to classify students as temporary residents rather than migrants, much as Canada and Australia already do:

They are here for a short time only and by choosing to study in the UK, they are contributing to jobs, growth and cultural understanding in this country. By classifying them as migrants and including them within the net migration target we are implying they are unwelcome.

Finally, far from encouraging the widely-held fear that too many students stay in the UK after completing their studies, the report believes this should be encouraged.

The Government should reinstate the automatic option or make it easier for international students to work here for a few years after graduation; this would be good for UK universities, good for UK business, and good for Britain’s long-term relations with the global business community when these graduates return to their home countries.

In short

It seems many fears people hold about students’ contributions are unfounded, and that migration is often far from a negative influence on the UK economy.

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