It is hard to think of a more short-sighted and self-destructive policy than Theresa May’s decision in 2012 to close the post-study work visa route for those wanting to live and work in Britain.
Boris Johnson is right to bring it back.
Britain’s universities are truly world class, attracting the best and brightest from across the world. Overseas students add £20bn to UK GDP in the fees they pay as well as their spending, but they represent much more than a cash cow.
In today’s knowledge economy, a nation’s prosperity is closely tied to its ability to produce and attract highly-skilled talent. Institutions such as Imperial, UCL, and LSE are a powerful magnet pulling in the bright individuals that British startups need in order to grow to scale.
Yet in 2012, the then-home secretary Theresa May decided to make it harder for these individuals to stay in the UK. As a result, Australia recently overtook the UK as the number two destination for international students, behind the US.
The lack of a post-study work visa has damaged the UK’s entrepreneurial ecosystem. The Entrepreneurs Network found that 49 per cent of the UK’s fastest-growing companies had at least one foreign-born founder. Speaking to these founders, we found that many were initially attracted to the UK by the opportunity to study at a top university, but decided to stay after graduation to work or start businesses.
Without a post-study work visa or free movement, many founders might not have stayed.
While it is still possible for an overseas student to stay in the UK after graduation, they need to find an employer with a Tier 2 sponsors licence who is willing to pay £20,800 per year. The expensive and time-consuming process of becoming a Tier 2 sponsor effectively precludes foreign graduates from working for startups.
Miguel Martinez, co-founder and chief data scientist at Signal AI, told us that “any visa sponsorship programme adds additional complexity and requires significant effort… while this will not be a problem for large companies, it is likely to be prohibitively hard for a startup”.
Would-be entrepreneurs are averse to paperwork and red-tape. One international student-turned-entrepreneur told me that if he’d had to apply for a Tier 2 visa to move to the UK, he might have gone to Amsterdam, Paris, Berlin or Madrid instead.
The virtue of the post-study work visa is its flexibility. Not every graduate immediately starts working at a Big Four accountancy days after their last exam. Most take time to experiment with internships before finding the right fit.
A recent survey of over 5,000 US PhD students found that foreign-born students had a higher tolerance for risk-taking and were more likely to express an interest in commercialising research or starting a company, but were less likely to become founders or startup employees in their first job after graduation.
The researchers suggest that onerous visa restrictions are the reason.
With free movement set to end, it’s imperative that we keep the door to global talent open.
Restoring the post-study work route will enable more talented individuals to stay, work, and eventually build businesses in the UK.