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Statements from ministers this week have made it clear that higher education in England is facing significant reforms, re-setting its focus towards helping to plug the UK's skills gaps and rebuilding the economy. Fariba Soetan, Policy Lead for Research and Innovation at the National Centre for Universities and Business, argues that the proposed changes bring a welcome focus on graduate outcomes and supporting the careers of young people.
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Employers’ claims that international students are vital to the future prosperity of the UK are “seriously undermined” by the number of foreign students going into graduate jobs, according to a new report.
The briefing paper from Migration Watch UK, said that since rules were introduced that only granted post-study work visas to students taking up jobs with a minimum starting salary of £20,000, the numbers applying for the visas had plummeted.
In 2011, the last full year in which students could be granted a visa that would allow them to stay on and search for work at any skill level, nearly 50,000 did so.
In the first full year (2013) that international students were required to get a graduate level job in order to remain in the UK, only 4,100 were recruited, rising to 5,600 in 2014.
The report said: “This very small number who managed to get graduate employment at the average rate of graduate pay seriously undermines claims by employers that international students are 'absolutely vital to the future prosperity of the UK'. Students may well have been taking low skilled work to pay off their fees but, if so, that is hardly vital; indeed, the foreign exchange benefit to the British economy will have been correspondingly reduced.”
The Post Study Work visa was first introduced in 2004 to allow science, technology, engineering and maths graduates to remain in the UK for one year’s work experience. Over time the visa gradually became more open and more generous, according to Migration Watch.
The final version, called Tier 1 (Post Study Work) was described by the independent Migration Advisory Committee as one of the most generous schemes of its kind in the world. It allowed all graduates of any discipline and any degree class to remain in the UK for up to two years in order to search for work with no restrictions on its skill level.
In 2011, Theresa May, the Home Secretary, announced that the Tier 1 (Post Study Work) visa was to be closed on the grounds that the arrangement was “far too generous” and that 39,000 students and their 8,000 dependants took up the visa “at a time when one in ten UK graduates were unemployed.”
The replacement scheme only allowed graduates to remain in the UK if they were able to secure graduate level employment paying a minimum of £20,000 per year. No cap was placed on the number of students that could switch and employers did not have to conduct a resident labour market test, normally a requirement if an employer wishes to bring in a non-EU worker. The average salary of a UK graduate who graduated in 2011/12 and entered the labour market was £20,000. In 2013, less than 5,000 overseas graduates applied for the visa.
Universities have called for the rules to be relaxed, arguing they are more stringent than the restrictions applied in other countries and are turning international students off the UK.
A report published last year by Universities UK said: “"Changes made to post-study work options in the UK have made it less attractive as a study destination to students from certain parts of the world. These changes have been implemented at a time when other countries are moving in the opposite direction and providing more generous arrangements. It is therefore vital that post study work opportunities for qualified international graduates are enhanced."
Businesses have argued that they need the more generous Post Study Work visas because of a shortage of UK STEM graduates.
Migration Watch said the numbers of international students enrolled on STEM courses in 2013/14 was just 34,400, compared to 233,300 domestic undergraduates - the highest level since 2002/03.
The briefing paper said: “As for universities, they want students to be able to work unrestricted so that students can pay off the fees for their studies. However, students remaining in the UK to do unskilled work in order to pay off fees are of no significant benefit to the UK economy.”
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