Foreign students cut could cost economy £2.4bn

Home Secretary Theresa May's plans to cut the number of foreign students coming to Britain will cost the economy £2.4 billion, figures have showed.

The crackdown on bogus students and colleges is part of David Cameron's drive to bring net immigration down from more than 200,000 to tens of thousands annually by 2015.

But the reforms will cost the UK £2.4 billion, an impact assessment released by the Home Office showed.

Costs of £3.6 billion will include £2 billion from a "reduced output from students and their dependants" who will no longer be able to come to the UK and from tighter control of foreign students' ability to work in the UK, the assessment said.

A further £170 million cost will come in the loss of student tuition fees to institutions, while the reduced output from post-study workers will cost £1.2 billion.

The UK Border Agency is also expected to see a £160 million loss in income from fees.

But the moves will also bring benefits of £1.1 billion.

Overall, the assessment said the "best estimate" was that the reforms would cost £2.4 billion, but this could be up to £3.6 billion in the worse case scenario.

Immigration Minister Damian Green said: "We are radically reforming the immigration system to tackle abuse and bring net migration down to sustainable levels.

"These changes to the student visa system will create a system where every student coming to the UK attends a legitimate course at a legitimate institution.

"They will work alongside our other reforms of the work route and changes being planned for the settlement and the family routes."

The impact assessment also showed there will be 273,000 fewer student visa grants over the full five years of the parliament, leading to a fall in net migration of about 232,000.

The reforms will also save £75 million in reduced course provision for the education sector, £150 million in reduced UKBA processing costs, and £840 million in reduced costs for public services.

Savings in enforcement costs will also save £45 million "which may be used to combat more significant abuses of the immigration system that potentially result in harm to the UK economy and society", the assessment said.

A UKBA spokesman said: "These proposals will lead to savings of £1.1 billion most of which will benefit our public services.

"It may be there will be even greater benefits as it is not unreasonable to assume that jobs not taken by migrant students will instead be taken up by British workers.

"However, we have costed a worst-case scenario while the Migration Advisory Committee looks at this issue over the summer."













Mrs May has said the "radical" clampdown would close fake colleges and block entry for those who cannot speak good English.

There will also be tougher restrictions on non-EU students staying in the country after their course finishes.



Since the new Government came to power in May last year, 33 educational providers have had their licences revoked for abuses.



Immigration Minister Damian Green said: "These figures show that this Government will not hesitate in taking action against educational providers who do not abide by our rules."







Later, a Home Office spokesman added: "We are required to provide impact assessments, but the process for these assessments is unsatisfactory.

"For example, they require us to assume there is a zero displacement effect of students taking jobs on the local labour market and so we have asked the independent Migration Advisory Committee to look at this issue over the summer."







Pam Tatlow, chief executive of university think-tank million+, said: "The impact assessment sets out the huge cost to the UK of the changes to student visas.

"This is exactly what vice-chancellors and universities have been warning Government about for months.



"At a time of economic difficulty, we should not be introducing reforms that will damage the UK or stop us attracting the talent and skills we need to rebuild our economy.



"Of course we should be doing more to crack down on bogus colleges, but the system did not need the Government to take a sledgehammer to it. The end result could be a catastrophic loss of education exports."







Shadow home office minister Shabana Mahmood said: "The Government's immigration policy is in disarray and they are not being honest about their policies, nor the effect they will have on net migration.

"In getting to this point, the Government has succeeded in damaging the reputation of UK universities as well as our global reputation."



She went on: "We know too from recent reports that the Government is failing to ensure the UKBA has the resources it needs to maintain effective enforcement measures, which is crucial to ensuring students do not overstay their visas.



"We need to crack down on bogus colleges but the Government rhetoric does not match the reality on the ground.



"At the heart of their policies is chaos, confusion and a failure to protect both the UK's border and the economy. The Government has been talking tough on immigration, but it is now clear that they are failing to deliver."



Shadow universities minister Gareth Thomas added: "This decision is not only set to cost Britain over £2.4bn just when we can least afford it, but it will also make it far harder for our universities to fight off competition from the best American universities for the brightest overseas students."











Arts and Entertainment
TVShow's twee, safe facade smashed by ice cream melting scandal
News
newsVideo for No campaign was meant to get women voting
Arts and Entertainment
tv
Arts and Entertainment
Lisa Kudrow, Courtney Cox and Jennifer Anniston reunite for a mini Friends sketch on Jimmy Kimmel Live
tv
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Sport
Alexis Sanchez celebrates after scoring his first goal for Arsenal in the Champions League qualifier against Besiktas
sportChilean's first goal for the club secures place in draw for Champions League group stages
News
i100
News
Down time: an employee of Google uses the slide to get to the canteen
scienceBosses are inventing surprising ways of making us work harder
Arts and Entertainment
Amis: 'The racial situation in the US is as bad as it’s been since the Civil War'
booksAuthor says he might come back across Atlantic after all
Extras
indybest
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Project Manager (infrastructure, upgrades, rollouts)

£38000 - £45000 Per Annum + excellent benefits package: Clearwater People Solu...

MI Analyst and SQL Developer (SQL, SSAS, SSRS)

£28000 - £32500 Per Annum + 28 days holiday, pension, discounts and more: Clea...

Creative Content Executive (writer, social media, website)

£30000 - £35000 Per Annum + 25 days holiday and bonus: Clearwater People Solut...

Systems & Data Lead – Oxfordshire – Permanent – Up to £24k

£20000 - £24000 Per Annum 28 days holiday, free parking, pension: Clearwater P...

Day In a Page

Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone
Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

What is the appeal of Twitch?

Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

How bosses are making us work harder

As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
Manufacturers are struggling to keep up with the resurgence in vinyl records

Hard pressed: Resurgence in vinyl records

As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

A tale of two writers

Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
Could a later start to the school day be the most useful educational reform of all?

Should pupils get a lie in?

Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
Prepare for Jewish jokes – as Jewish comedians get their own festival

Prepare for Jewish jokes...

... as Jewish comedians get their own festival
SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

A dream come true for SJ Watson

Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
10 best cycling bags for commuters

10 best cycling bags for commuters

Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

Paul Scholes column

Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?