(1) The Secretary of State must commission an annual report from the Migration Advisory Committee on the impact of the provisions of this Act on the number of overseas students in the UK from the EEA and Switzerland.

(2) The report must be laid before each House of Parliament as soon as possible after it has been completed.

(3) A Minister of the Crown must, not later than three months after the report has been laid before Parliament, make a motion in the House of Commons in relation to the report.—

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

It is a pleasure to see you in the Chair again this morning, Sir Edward. The new clause would require the Government to commission an annual report from the Migration Advisory Committee on the impact of the Bill’s provisions on the higher education sector.

As the Committee will know, the UK higher education sector has a world-leading reputation, which helps it to attract international students. The proportion of international students is a measure in most global university rankings, meaning that by choosing to study here, international students contribute directly to the sector’s world standing. Today, 18 of the UK’s universities rank in the world’s top 100, and 76% of UK research is ranked as excellent or world-leading. International staff and students are crucial to the UK’s economic success, and it is important that the UK continues to attract both EU and non-EU students and staff in the future.

International students deliver more than £26 billion to the UK economy. They bring more than £6.9 billion in income to universities in tuition fees. They generated £13 billion of export revenue in 2016, an increase of 41% since 2010. Universities UK estimates that universities supported more than 200,000 jobs and were worth £3.3 billion in tax revenues.

Aside from the direct economic benefits, international students and staff are crucial to the provision of skills, the conducting of research and the culture of the UK’s universities. In 2017-18, UK higher education institutions reported a £4.3 billion deficit between research income received and the costs of delivering research activity. Much of that gap was covered by international tuition fees, so international students are key to the UK’s research capacity.

In 2018-19, there were 485,645 international students enrolled at UK universities, an increase from 436,600 international students in 2014-15. Some 342,620 of those international students—that is 70%—were from outside the European Union. The remaining 143,025 students were from EU countries, but the UK’s market share has dropped in 17 of the world’s top 21 sending countries. The Office for Budget Responsibility has identified higher education as the sector likely to take the hardest hit from the covid crisis.

Given the pressures, it will be vital to understand the impact of immigration policy on future student numbers. The impact assessment attached to the Bill is optimistic, suggesting that a potential reduction in the number of EEA students attending UK universities of 25,000 after the first five years of the new points-based system will be offset by a corresponding increase in non-EEA students.

However, some of the assumptions in the impact assessment are highly speculative—as, indeed, the Government themselves acknowledge. Paragraph 160 of the impact assessment states that

“measures such as proof of funds and employment rights might have an additional deterrent impact—but there is little evidence on which to base an estimate. The impact of any administration cost or visa fee or change to student funding will also impact student choices. Therefore, the estimates presented here will only reflect the potential impacts from changes in immigration policy and not the overall impacts on EU student numbers.”

Paragraphs 163 and 164 state:

“The restrictions on the rights to bring dependants, which will apply to EU students from 2021, may also have an impact on inflows under the future system, as only those who are studying a full-time course which is a least nine months long at a postgraduate level of study are allowed to bring family members to the UK…Applying these potential deterrents, the reduction in EU student inflows are estimated to be around 15,000 per annum in the first five years of the policy.”

In paragraph 165, expected-length-of-study data is applied to the change in inflows, pointing to:

“an estimate of up to 25,000 fewer EU higher education students in the UK by academic year 2024/25 relative to the baseline.”

The paragraph also argues that

“any places not taken by EU students may be occupied by non-EU students, so the overall impact on foreign student numbers is not clear.”

In paragraph 166, the Government estimate that

“non-EU enrolments might increase by up to 10 per cent, depending on the level of study”,

but the paragraph also notes:

“This assumption is very uncertain, not least because other drivers could have affected non-EU inflows over the period of the last post-study work visa.”

None the less, paragraph 167 states:

“The assumption of around 10 per cent increase in enrolments is estimated to lead to an average annual increase in non-EU enrolments by around 25,000 over the first five years of the policy.”

That is a strikingly convenient conclusion in the light of the assessment of 25,000 fewer EU students at the end of the same period.

Paragraph 172 notes:

“Changes in the numbers of students enrolling will affect tuition fee income for universities. Overall, projected tuition fee income is estimated to increase under the future immigration system. This is primarily driven by the”— assumed—

“increase in tuition fee income from additional non-EEA students which is expected to more than offset the decline in EEA student tuition fee income. The increase is estimated to be between £1 billion and £2 billion over the first five years of the policy.”

However, paragraph 172 goes on to state:

“Estimates do not take any account of behavioural impacts, nor any changes in universities expenditure.”

Paragraph 173 expands on that, stating:

“EU students are currently classified as ‘home’ students, and therefore benefit from accessing student loans and paying domestic tuition fees which are currently capped at £9,250 for undergraduates. Estimates above assume home fee status and access to student loans will remain the same as the current system. However, any changes to this will have an impact on both EU student enrolments and the projected tuition fee income of universities.”

Paragraph 175 concludes:

“As a result of changes to net student enrolments modelled above, a cumulative net fiscal benefit is estimated of under £1 billion over the first five years of the forecast period.”

That is a bold statement that will be true only if the assumptions in the impact assessment are correct and the reductions in EU students are indeed replaced by non-EU students.

We can already identify a number of policy choices that could affect those assumptions. The current situation for EEA students coming to the UK is that for academic year 2020-21, they retain the same status as domestic students. However, delays in start dates and term times as a result of the covid crisis may mean that there will be students who enrol on to academic year 2020-21, but do not enter the UK until 2021. Which immigration system will apply in such circumstances is uncertain.

The Government urgently need to provide clarity on this issue and find a sensible and pragmatic way to ensure that no EEA students coming into the UK in the academic year 2020-21 will face additional barriers to entry as a result of the covid crisis and that they will all be treated as they are currently.

As we heard last week in evidence from Richard Burge of the London Chamber of Commerce and Industry, post-study work opportunities play an important role in attracting international students, so the two-year post-study work visa is welcome, but Universities UK has also identified a number of concerns about this policy. The 2020 international student survey from QS—Quacquarelli Symonds—found that only 6% of prospective international students interested in studying in the UK were aware of the timeframe that they would be allowed to stay in the UK after studying, so better promotion to prospective students is needed. The ISS found that 60% of respondents would be more likely to consider studying in the UK if the post-study work visa was extended to three or four years, and clarity is needed that students who begin their studies remotely and subsequently spend less than 11 months in the UK will still be eligible.

A number of uncertainties exist in relation to the assumptions of student numbers set out in the impact assessment. A report to Parliament, as proposed in our amendment, would enable careful monitoring of the extent to which the assumptions in the assessment are realised and offer the chance to take early action if outcomes are poorer than expected. The same is true of non-UK staff in UK universities. International staff make up nearly a third of the total academic workforce in higher education institutions: 18% are from the EU and 13% are from outside the EU, while the proportion of academic research staff who are international staff is even higher, and the number of international staff has been increasing. EU staff members increased by 44% between 2012 and 2018, and non-EU staff members by 25%.

It will be important that the proposed review reports on the impact of Government policy on the recruitment and retention of international staff, but here too there are concerns about future policy direction. To be eligible for a visa in the current immigration system, international teaching staff are required to earn a minimum salary, which is decided using well-established sector pay scales. The Migration Advisory Committee advised that the criteria used to set the minimum salary threshold should be changed to use a different dataset from the annual survey for hours and earnings. This change increases the minimum salary requirement by over £7,000.

The Government followed the MAC’s advice on the basis that academic staff would still be eligible in the points-based system, because they hold a PhD-level degree qualification, but while all teaching staff are highly qualified, only around 49% hold a PhD. Twenty-seven per cent of current international staff, or 7,800 people, would not be eligible to come to the UK under the new proposals. Universities UK is aware that the Government want to attract such staff, so it would encourage a revision of the requirement to avoid any unintended consequences. Higher education is the only area of the education sector that does not receive an exemption from the annual survey of hours and earnings data measurements in the proposals.

Finally, around 17,000 UK university students take part in the Erasmus+ scheme every year, which enables thousands of students to benefit from the opportunities that a period of study in an international university can offer. The UK will not participate in the new Erasmus+ programme starting from 1 January 2021 unless the Government secure continued participation in the current talks on the UK’s future relationship with the EU. The loss of Erasmus+ would be felt hardest by young people, especially disadvantaged and disabled students, who receive additional grants to study abroad, very often going overseas for the first time.

The programme is also valued, however, by UK employers. Almost half—42%—of higher education students on Erasmus undergo traineeships abroad in businesses and enterprises, learning skills that are demanded by employers on graduation. Incoming students, meanwhile, spend £420 million a year across the UK, and that sum is rising annually. If we take account of these earnings, the UK is estimated to make a net profit of £243 million a year from our participation in Erasmus. Again, regular reporting would enable Parliament to monitor the extent to which young people continue to have access to the best international exchange opportunities in higher education, which is important for the UK’s competitiveness and economic success and for the life chances of our young people.

In conclusion, I hope the Minister will agree that ongoing monitoring and reporting to Parliament on the state of the higher education sector in relation to staff, students and young people on exchange programmes in the wake of this Bill will be vital. I commend my new clause to the Committee.

Again, I fully support and echo much of what the hon. Member for Stretford and Urmston has said. If anything, I would argue that the review requested in the new clause should be slightly broader and encompass not only student recruitment but staff recruitment, because that is an important issue for our universities. I also suggest that the report needs an urgent timeframe, because the clock is ticking down to a new academic year and a new recruitment period, but she made all sorts of valuable points.

Some changes made to the Government’s original White Paper have improved matters, such as the reduction in the salary and skills thresholds, but there remain lots of challenges, and of course just now universities are under immense pressure in dealing with the coronavirus pandemic and its fallout. I have spoken with Universities Scotland about the review suggested in the new clause, and what follow are some of the issues it raised. What steps are the Minister and the Government taking to get the visa system working again—lots of visa processing centres remain closed—and how can alternative measures be put in place to ensure we can recruit students at the moment?

What steps will the Government take to ensure that students can start courses online with confidence—for example, by extending the window from three months to six months so that people can have extra time to arrive in the UK from when their visa becomes valid? What steps are being taken to ensure that online study does not disqualify students from the graduate route, and will the Minister consider increasing the graduate route length to three or four years and promoting it intensively, because as we he heard awareness rates are still very low?

Finally, the report should also look at whether consideration has been given to waiving tier-4 visa fees for one year only? In the longer run, what steps are being taken to ensure that our visa fees are competitive and allow us to compete with countries such as Canada and Australia, which have such strong offers in terms of fees and post-study work. These are all things the Government should think about as part of the report, and we think the new clause would be a welcome addition to the Bill.

The new clause provides the Committee with a useful opportunity to consider the important issue of international students in the UK, and I am grateful to hon. Members for tabling it.

I want to start by picking up on the point made about Erasmus by the hon. Member for Stretford and Urmston. My constituency sees a large number of Erasmus students, and we very much welcome it. At the moment, the scope and content of EU programmes post 2020, including Erasmus, is being negotiated within the EU institutions and has not been finalised. The Government have made it clear that the UK is ready to consider participation in certain EU programmes, in particular Erasmus+, once the EU has agreed the baseline in its 2021-27 multiannual financial framework. Given that that has not yet been agreed, we are preparing for every eventuality and considering a wide range of options with regard to the future of international exchange and collaboration in education and training if it is not possible to secure a deal on Erasmus+. I want to give reassurance that the will is there. Once the EU has agreed its baseline, we will look to continue to be part of that valuable programme.

The Government strongly welcome international students, as I know Members across the Committee do. We see the academic and creative energy they bring to communities across our Union, including Belfast, Glasgow, Cardiff, Birmingham and Exeter. The Committee will be pleased to hear that the UK is one of the world’s leading destinations for international education, and hundreds of thousands of talented students choose to come to the UK’s world-leading institutions.

The Higher Education Statistics Agency has found that the total number of international students in higher education in the UK increased by 10% between 2014-15 and 2018-19, with the latest data suggesting that around 140,000 EU domiciled and 340,000 non-EU domiciled students enrolled in higher education institutions in the UK. The most recent set of immigration statistics show some very welcome growth in the number of people studying at our institutions from China and India in particular.

I want to reiterate that the Government place no limit on the number of international students who can come to study in the UK and have no intention ever to introduce any such limit in future under the new migration system. Indeed, as set out in the “International Education Strategy”, published last year, it is the Government’s ambition to increase the number of international higher education students studying in the UK to 600,000 by 2030. However, I recognise that we must not stand still if we are to continue to be a leading destination for international students. The Minister of State for Universities recently announced a new international education champion, Sir Steve Smith, to spearhead the UK’s efforts in the international student market. The Minister and I liaise regularly about the role that the migration system can play in facilitating that.

In summer 2021, we will launch a new graduate route, which will enable international students who have successfully completed their degree to remain in the UK for two years post study to work or look for work at any level, in order to kick-start their career. That will ensure that the UK continues to attract the brightest and the best and that our offer to prospective international students remains competitive internationally. I know that this policy change has significant cross-party support. It was even one of the first requests made by an SNP MP in a recent Opposition day debate on migration, in which my hon. Friend the Member for Moray and I took part, and I am pleased that it has been welcomed by the education sector.

I want to respond to the points made about eligibility for this route. We have published guidance, which confirms that those having to study overseas by distance learning due to the current circumstances will still be eligible for the graduate route. I do not blame Opposition Members for not having seen it, because it came out this morning, so I do not make that point to have a go at them. That followed discussions that the Minister of State for Universities and I had.

We will not penalise people for circumstances that are beyond their control, and we are working to finalise some of the details. Particularly for those on a one-year course—who will predominantly be postgraduate students, where we probably have a record of compliance and they have a very high skill level—we will be working to find that they have spent some time in the United Kingdom. For those starting three-year courses, we will not hold against them an absence from the United Kingdom caused by having to do distance learning, as a general principle.

We are looking at a range of other measures we can take to facilitate applications for tier 4, particularly from those who are applying to a new course having already been in the United Kingdom, many of whom are postgraduates or have done foundation courses. We have had strong representations on the extension to six months. It is clear that that will not be a huge advantage to someone looking to start a course in late September or October, given that it is now mid-June, but we are looking at where we can make some appropriate changes to the migration rules to reflect the unique situation. We will of course continue to work with Universities UK to ensure that those changes are appropriate. As I say, we have today published some guidance, which I am sure Committee members will find interesting. I will make sure that a link to it, or perhaps a copy of it, is sent round, to make one or two of these points clear.

On the wider response, we have extended leave, free of charge, for those students who are unable to travel home. We have also temporarily given more institutions the ability to self-assess English language, permitted distance learning and allowed students to make in-country applications when they would otherwise not have been able to do so. We will launch a new student route later this year, as part of the new points-based system, and EEA citizens who wish to come to the UK from 1 January to study will need to apply under that route and meet the requirements in the same way as non-EEA citizens. However, to be clear, those who arrive before the end of the transition period will be able to apply to the European settlement scheme and benefit from the protections of the withdrawal agreement.

Under the new student route, provided that students have been offered a place by a sponsoring institution, the immigration requirements will be light touch. Along with being sponsored, students must be able to speak the required level of English for their course and to support themselves in the UK. The route will improve on the existing tier-4 route, making it more streamlined for sponsoring institutions and their students, creating clearer pathways for students, and ensuring that the UK remains competitive in a changing global market.

As I have mentioned before in Committee, the Government have committed to expanding the role of the Migration Advisory Committee. This year will be the first time that the MAC publishes an annual report—an important development to increase transparency and provide more regular evidence on issues relating to immigration. However, as I have said before, in addition to specific commissions from the Government, the MAC will also be able to undertake other work when it considers it necessary.

In 2018, for the first time in its history, the MAC looked at the issue of international students. The Government have accepted its recommendations, and we have gone slightly further than the MAC suggested by creating the new graduate route, enabling international graduates to remain in the UK for two years on completion of their studies. Given the importance of the issue, I cannot imagine that the MAC will not choose to look at it regularly or comment on it in its annual report.

To touch on the comments made earlier, the MAC is an independent body. Yes, it can take Government commissions, but I am sure it will also be open to representations from the sector and others—potentially the devolved Administrations—on issues that it should prioritise and consider.

It should be recognised that prospective students take into account many factors when choosing where they will go to study, including the quality of the institution and the course on offer, course fees, the ability to access student loans, graduate outcomes and the global economic environment. The new clause would require the MAC to consider the impact of “this Act” only. Such a narrow focus would not capture the wider environment that could affect international student numbers. For the reasons I have set out, I hope that Opposition Members will feel able withdraw the new clause.

I welcome much of what the Minister has said. I welcome his and the Government’s ambition to be and to continue to be a leading player in the international student market. I very much welcome what he said about the commitment either to continue our association with Erasmus+, if that is possible, or to find other ways to continue to offer international exchange opportunities to students. He gave useful assurances in relation to the guidance published this morning—which I apologise for not having read—on greater flexibilities in respect of the covid-19 crisis. I am sure that the MAC will have heard what the Minister said about encouraging its continued active review of the international student market. Given the Minister’s comments, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.