International Science, Technology, Engineering and Mathematics Students (S&T Committee Report)

Lord Krebs Excerpts

Thursday 19th March 2015 Lords Chamber

Moved by

[Lord Krebs]

That this House takes note of the report of the Science and Technology Committee on International Science, Technology, Engineering and Mathematics (STEM) students (4th Report, Session 2013–14, HL Paper 162).

[Lord Krebs (CB)]

My Lords, I declare two interests, first as principal of Jesus College, Oxford, where we have many international students, and secondly as chairman of Oxford Risk, a small-business spin-out of Oxford University that has an interest in recruiting the best talent from around the world.

I thank the members of the Science and Technology Select Committee for their excellent contributions to this inquiry, as well as our outstanding specialist adviser, Professor Sir William Wakeham, for his wise and expert advice and, of course, the committee clerk and policy analyst for their superb support. Noble Lords will be aware that this report is a historical throw-back to my time as chairman of the S&T Select Committee and I am pleased to note that it is the last of the reports under my chairmanship to be debated.

I also thank the noble Baroness the Minister for the Government’s response to our report, although I have to say that the response was a little less positive than we had hoped. We made nine recommendations, of which one was accepted unequivocally, four were rejected and four were considered, I suppose. I hope that at the end of the debate, the noble Baroness will bring us an update on the Government’s thinking.

I start by clarifying what it is we are talking about. Noble Lords will be aware that there is a broader debate about measures to reduce net migration into this country. Our inquiry falls within that broader context. We looked, in particular, at undergraduate and postgraduate students from outside the UK and European Union, referred to either as overseas students or international students, coming to this country, or not, to study science, technology, engineering and mathematics—STEM subjects, as they are commonly known. We were particularly concerned with what we called “hard STEM subjects”, such as physics, maths, chemistry, engineering, computer sciences, medicine and biology, rather than the softer subjects that come under the broad heading of STEM used by the Higher Education Statistics Agency and which include courses such as architecture, building and planning, forensic science and equine studies.

When we think about students who are studying what we called “hard STEM subjects”, the first point to note is that we have a national skills shortage. The CBI estimates that 43% of employers have recruitment difficulties with STEM graduates and that, in order to fill the requirements of industry, the number of graduates will have to rise by 40% from today’s levels. Similarly, the Social Market Foundation has proposed that we need an extra 40,000 STEM graduates per year up to 2020. Another metric is the shortage of physics teachers in state schools. It is estimated that more than 500 state schools have no qualified physics teacher at all and that there is an overall national shortage of about 4,000 physics teachers. If we are to develop the high-tech, science-based economy that was referred to in yesterday’s Budget, we need to be able to educate and employ more STEM graduates.

International STEM graduates are a very important part of the higher education ecosystem. In total, there are between 50,000 and 60,000 international STEM students in the UK, if we include both undergraduate and postgraduate. Some university courses are hugely dependent on international students for their sustainability. For instance, almost half of those enrolled on taught master’s courses in computing and engineering come from outside the UK and the European Union.

In spite of our dependence on international students both in our educational system and for employment in our science and engineering industries, it seems that our ability to attract international STEM students is declining relative to our competitors. The question we asked in our inquiry was whether this decline, which started about five years ago, has been caused at least in part by the serial changes to immigration policies that have been introduced since 2010 as part of the Government’s aim of cutting net migration. Before 2010, the number of so-called hard STEM students from overseas was steadily increasing year on year, but since then the overall number has not increased, and in some cases there have been dramatic declines.

The picture is not uniform across subjects, across courses and across countries of origin. I will not go through all the detail of the figures we were given by BIS, but suffice it to say that the most dramatic decline post 2010 is in students coming from the Indian subcontinent. Indian student numbers declined from around 12,000 to 5,000 over the two years post 2010, while other countries, notably China, have continued to show an increase. Looking at subjects and kinds of course, the biggest declines within subjects are in engineering, computer science and subjects allied to medicine like optometry and pharmacology, and that is true whether looking at undergraduate numbers or those taking postgraduate taught master’s degrees. There has been no discernible trend towards a decline in the number of students studying for PhD degrees—research students—but the numbers here are in any case relatively small. The decline in particular subjects and courses may actually be linked to the decline in geographical origin because many Indian students who used to come here would study the subjects in which there has been a marked decline in overall intake.

The question is this: what has caused these changes? Is the correlation between the decline or levelling off in some areas and the introduction of changes to the Immigration Rules for students sufficient for us to infer causation? The problem with interpreting the trends is that, of course, we do not have the counterfactual; we do not know what would have happened had there not been any changes to the Immigration Rules. Would the increase in students from China have been even steeper? Would India have continued to rise instead of falling? We were told by officials from BIS that other factors may have influenced the trends. They mentioned, for example, exchange rate fluctuations, particularly the fall in the value of the rupee, and they also referred to more aggressive marketing and recruitment by our major competitors such as Australia, the USA, Canada, Singapore and other EU countries. But while we saw a 42% decrease in Indian students between 2010 and 2012, Germany and Canada both saw an increase, and the USA had a mere 7% decrease. Since the fall in the value of the rupee would surely have affected these countries too, it would appear that exchange rate fluctuations cannot be the whole story.

A report published last month by the British Council draws on the figures from the Higher Education Statistics Agency. It highlights how we are losing out to our competitors. Our market share of international students globally—not just in STEM, it has to be said—has fallen over the past four years by more than 4% and there is no sign of that decline slowing down. So in spite of our natural advantages—the English language and our global connections through the Commonwealth—our competitors seem to be eroding our market share. This is bad news for universities and for the much-needed skills that I have already referred to which international STEM students could bring to our industries, not to mention the soft power effect of building relationships with other countries for the future.

We cannot be absolutely sure what has caused the slow-down and in some cases the decline in the arrival of international students, but the circumstantial evidence we heard suggests very strongly that government policies on immigration have played a significant role in preventing STEM students from coming here to study and work. I will not attempt to speculate whether this was the Government’s intention, but we know from the Statement made in another place by the Home Secretary in March 2011 that the aim of the changes to which I am about to refer was to reduce net migration and,

“to return some … sense to our student visa system”.—[Official Report, Commons, 22/3/11; col. 856.]

So there probably was some element of intent in that.

To summarise the evidence, we heard about three kinds of factors that might be putting off students from outside the European Union coming to this country. The first is perception, the second is bureaucracy, and the third is specific barriers. I shall say a little about each of those.

On perception, as a result of the changes that started in 2010, some overseas students appear to have got the message that the UK does not welcome them. That is great news for our competitors. I know that the Prime Minister and the former Minister with responsibility for science, David Willetts, have gone to great efforts, including travelling to India, to say that the UK is open for business and welcomes international students. But once confidence has been eroded, it is not easy to rebuild it, and I think that more work needs to be done. Although the numbers are very small, my own informal survey of international students at Oxford University tells me that there is still a perception in India and elsewhere that the UK is less welcoming than it used to be.

On bureaucracy, we heard in our evidence that the frequent changes in immigration policy—it was not just a one-off; many things have changed since 2010—and the bureaucracy associated with applying for visas is off-putting to potential students.

On both those issues, the Government in their response appeared to be pretty well satisfied with the current situation. However, I would like to ask the Minister whether the Government have done any research to ascertain the perceptions of students themselves, both those who choose to come to the UK and those who considered coming here and have gone elsewhere. In a moment, I will refer to such a survey carried out by an independent body. I think that market research of that kind might help as a reality check to see where we are.

I turn now to some specific barriers. The first thing to say about the evidence that we heard is that the cost of a student visa to come here is higher than in eight out of nine competitor countries for which we have evidence. The sums of money may not be huge—they are in the order of tens to hundreds of pounds—but the implicit signal is clear: we want to make it more difficult to come here, through what we will charge you for a visa, than some of our competitors do. I think that that is a continuing problem.

Perhaps the most important barrier that we heard about is the change in the rules allowing students to stay on and work after they have qualified. Some, perhaps many, international STEM students, having qualified in a UK university, would like to stay on and work. This is surely a good thing, given that we have trained and educated them to provide the skills that our industry desperately needs. You would think it a no-brainer that we would want to try to persuade them to stay here.

Under the old arrangements, prior to 2012, the so-called post-study work route entitled international students to stay on and work for up to two years before applying for a tier 2 skilled worker visa if they had a job. In 2012, the post-study work route was abolished and replaced with a new scheme in which students have a mere four months to find a job, not after they have graduated but after they finish their course, and have to have a salary, which is today more than £20,500, to apply for a visa. We heard that this is a major deterrent to overseas students coming here. Our time limit of four months is shorter than in any other English-speaking or EU competitor country. For instance, Germany has a period of 18 months; the USA, 29 months after STEM graduates finish the course; and Australia, depending on the course and the circumstances, has a period of between 18 months and four years.

Look at the numbers. In the year before the old tier 1 post-study route was abolished, just under 35,000 visas were issued. In 2013, under the new tier 2 “general” route, only 4,175 visas were issued. That is an 88% drop in one year. We heard abundant evidence that the current arrangements are not only bad for UK universities but bad for UK business. One of our witnesses, Sir Andrew Witty, the chief executive of GlaxoSmithKline, told us that the new arrangements are “not great for employers” and that students have,

“vanishingly small amounts of time”,

to secure a job. As I said, the four-month clock starts ticking as soon as they finish their course, which may be many weeks ahead of the time that they receive their degree or final qualification, especially if it is a Masters degree with an element of a viva. The time that they have after they know their qualification to complete a visa application and job application is vanishingly small, as Sir Andrew says.

The Engineering Employers Federation also commented to us on the difficulties of the new arrangements, particularly for businesses that need to get a sponsorship licence. As I declared at the beginning, I am chairman of a small business. This morning we discussed there the fact that the UKVI guidance book that we must study if we want to get a sponsorship licence is a mere 144 pages long. We are not making life easy for small businesses to hire skilled STEM graduates from overseas. Would the Minister agree that our evidence from industrial employers shows that the current arrangements are really not fit for purpose? Why should the Government ignore the comments of those working hard to build a UK science-based economy?

Furthermore, an independent survey carried out by Hobsons of 70,000 prospective international students who made inquiries to UK universities between March 2011 and 2013 demonstrated that perceptions of visa restrictions, including the post-study work route, were a major deterrent to students coming to this country from overseas.

Let me end with, very briefly, two individual case histories that both relate to my college at Oxford, Jesus College. One student who gave written evidence to the committee is a Canadian citizen who studied medicine at King’s College London before coming to Oxford for further specialist training. She went back to Canada briefly to complete Canadian medical exams in case at some point in her career she wanted to practise there, but she wanted to come back and work in the NHS. However, in the brief period she was away, the rules changed and she was told that she was no longer eligible for further medical training in the UK. It seems to be madness for us to invest years in training a doctor and then tell her that she cannot come and work here.

My other case history is a Chinese engineering graduate from Jesus College who set up her own company, Oxford Space Structures, which is building consumer products as a spin-out of the European Space Agency’s research. Apparently, her company’s product is a lightweight travel cot based on technology developed for satellites—I look forward to buying one for my brand-new granddaughter, who arrived last Saturday. The BBC covered the story two weeks ago under the banner headline, “The global fight to attract foreign entrepreneurs”. It seems like a good news story, and indeed it is. However, when I clicked on the link to the UKTI Sirius scheme, under which the Chinese engineer was able to set up her business and which is designed to attract such entrepreneurs, I read that it is currently closed. Does UKTI have future plans for attracting overseas entrepreneurs if the Sirius scheme is now closed?

I could make a number of further comments about our report, but I prefer to hear what other noble Lords have to say. I just end by noting that our report is by no means alone in highlighting the problems to which I have alluded. In 2011, the Home Affairs Select Committee in another place advised against the closure of the post-study work route. Just last month, the All-Party Parliamentary Group on Migration published a report that reached a very similar conclusion to ours, based—as was our report—on a substantial volume of evidence from universities, students and employers. I beg to move.

--- Later in debate ---

[Lord Krebs]

My Lords, I thank all noble Lords who took part in this debate for their tremendous contributions. I particularly congratulate the noble Earl, Lord Kinnoull, on his excellent maiden speech. He made some immensely interesting points and revealed the advantage of having a chemistry degree from an ancient university.

I also thank the Minister for her response. The one area where we did not quite get the answer that we might have hoped for was on the four-month limit in the post-graduation time to acquire a visa. I hope that whoever is in government after the May election will look at that again, because the evidence is overwhelming from all sides that four months is just too short. As the noble Earl, Lord Kinnoull, said, with the milk round and the annual cycle of companies in recruiting, four months just does not work. As Sir Andrew Witty said, it does not leave students with enough time. I hope that will be reconsidered in future.

Motion agreed.