Business and HE leaders urge Chancellor to protect the Graduate visa route

13 May 2024

The Russell Group has joined Chambers of Commerce, business networks across the UK and higher education leaders to write to the Chancellor, warning against watering down or scrapping the graduate visa route.

Co-ordinated by the University Alliance group of universities, the letter has been sent ahead of the Migration Advisory Committee’s review of the graduate visa route (set to be published on 14 May). The signatories argue that if the government were to make any restrictions to the graduate visa route in response, it would have a "serious impact upon R&D capacity and return on government investment, besides causing damage to the wider economy".

The letter cites: 

• Data collated by IDP Connect that indicates that if the graduate route were removed, 45% of international students would study elsewhere. Modelling by PwC shows that even if less than half of that projection came to pass, 80% of universities would be in deficit by 2026.  
   
• That research & development at UK universities delivers a significant return on public investment: in England, the Higher Education Innovation Fund (HEIF) generates £8.30 for every £1 of funding. 
   
• The fact that the higher education sector itself is the second largest investor in research in the UK, spending £5.6billion on research in 2021.  

• That almost all of this investment is generated by tuition fee income from international students. In turn, fewer international students in the UK will mean reduced investment in R&D. 
   

Any move to restrict international students would come at a time when over 50 UK universities are already cutting staff, and that number would increase should the graduate route be scrapped or restricted. Fewer staff would reduce universities’ workload capacity for research, innovation, and business support.  

On signing the letter, Dr Tim Bradshaw, CEO of the Russell Group said:  

“A thriving university sector is critical to the UK’s R&D efforts, and ultimately to the growth of our economy and our global standing. Partnerships between universities and businesses are creating jobs and generating growth across all regions of the UK, delivering great returns on public investment. 

“Placing further restrictions on international students would cause unnecessary damage to our R&D infrastructure and our economy, leading the UK to lose out on global talent and skills, as well as the tuition fee income that helps to educate UK students and fund vital research.” 

Other supporters of the letter include Universities UK, alongside leaders of Chambers of Commerce based in London, Aberdeen, Wales, Birmingham, Brighton, the East Midlands and more.

Despina Johnson, Chief Executive of the North London Chamber of Commerce and Enterprise. said:

“At the North London Chamber of Commerce and Enterprise, we know that strong research and development infrastructure is crucial in enabling businesses to innovate and grow. R&D investment is essential in the success of our local economies, and in London and elsewhere, much of that investment is made by universities and delivered in collaboration between universities and businesses. We know that the contributions of international students are vital in funding this activity, but also in ensuring London is the thriving, international economic powerhouse that it is.  

Any changes to the graduate route that make the UK less attractive to international students will harm UK business and economic growth, and have a knock-on impact on our local economies.” 

Vivienne Stern MBE, Chief Executive of Universities UK, said: 

“We’re incredibly lucky so many international students choose to study here; they enrich our campuses, generate jobs and strengthen our soft power in the world – yet we seem intent on dismantling all of this. The Graduate Route is an essential part of the UK’s competitiveness in our offer to those students. It underpins a £37 billion export market, the employment of over 230,000 people in higher education and the UK’s position as a science and research superpower. Any changes to the graduate route will affect every university and region in the UK.  

“The government has invested a great deal in UK research and development because they know it helps drive badly needed growth. International students cross-subsidise UK research to the tune of around £5bn a year, and a decline in numbers will inevitably mean a decline in the UK’s research power. Universities of all shapes and sizes will need to make difficult choices about where to invest diminishing resources. This will mean further cuts to staffing, courses and research investment. The business community and the higher education sector alike are worried about this because we know what it means: a crushing blow to our local economies.”  

Professor Jane Harrington, Vice-Chancellor of the University of Greenwich and Chair of University Alliance said:

“International students add £37 billion to the UK economy every year in education exports and cross-subsidise UK research to the tune of £5bn. If the graduate route is restricted, UK universities will become less globally competitive, and the government would need to find ways of covering the significant losses to research funding and wider export income caused by declining international student numbers. This would be an extraordinary economic own goal. 

Together with business, we are urging the Chancellor to protect the considerable investments the Treasury has made in R&D, and to prioritise the longer-term impacts for our country.” 

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