Post-study Work Schemes

Stuart C McDonald Excerpts

Thursday 8th December 2016 Westminster Hall

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I warmly congratulate my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) and his new colleagues—the fresh talent—on the Scottish Affairs Committee on their excellent work on this important issue and on bringing this debate to the House.

I thank all hon. Members for their contributions today. All of them, in their own eloquent way, added to the convincing—indeed, overwhelming—case for reintroducing the post-study work visa in Scotland. It is really an open-and-shut case. In short, reintroducing the visa would be good for our universities and students, for business and the economy and for Scotland—for the country as a whole.

On the first point, we have heard already how non-EU international students are of great value to Scotland’s universities and the economy. Each year, they bring in about £444 million in fees alone and an estimated £488 million in off-campus expenditure—not all, I hope, in the pubs of the hon. Member for Edinburgh South (Ian Murray). Universities Scotland has calculated that Scotland has lost out on at least £254 million of revenue since 2012 as a result of the closure of the tier 1 post-study work visa. That figure does not include the considerable additional economic benefits from highly skilled international graduates contributing to the Scottish economy after university.

We should always remember, however, that in addition to the positive economic benefit from attracting these bright international students, they contribute immeasurably to the quality of the educational experience for all students. Domestic students and staff are exposed to different perspectives, contributing to their international experience and the development of critical thinking. International students create a more culturally diverse environment.

On the second point, hon. Members have highlighted how important retaining some international students here can be for business. They broaden the skills base and bring new ideas and links. In 2014, about 25% of all job vacancies in Scotland were hard to fill because of a shortage in available skills. That was up from 15% in 2011, and the closure of the post-study work route has certainly not helped in that regard.

On the third point, hon. Members have spoken about how Scotland as a whole benefits from a post-study work scheme, not only because of the demographic challenges that we face—an issue to which I will return shortly—but because attracting international students is, as my hon. Friend the Member for Inverclyde (Ronnie Cowan) said, key to a nation’s soft power. Scotland and the UK as a whole would benefit by gaining a vast network of global ambassadors among our international alumni.

Against that background, the very bad news is that removal of the post-study work scheme has had a substantial impact on the ability of students to remain in the United Kingdom after graduation. As my hon. Friend the Member for Perth and North Perthshire said, last year only 7,000 international students from across the UK made the transfer from tier 4 to tier 2; in 2011 that figure was close to 50,000, so there has been an overwhelming drop of more than 80%.

The case for a post-study work scheme for Scotland is therefore a powerful one. Unfortunately, the response from the UK Government has been hugely frustrating. Their arguments just do not stack up. The Government argue that international student numbers have remained steady or even increased slightly since the post-study work scheme ended, but, as my hon. Friend said, that misses the point. There is no doubt that we could have attracted even more students with a post-study work offer that was commensurate with what our rivals in other English-speaking countries such as Australia, New Zealand and Canada offer. As my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) pointed out, Scotland has seen a 59% decrease in the number of students from India since 2009-10. Indeed, the year after the post-study work route closed, recruitment of students from India fell by 26% in a single year. In their argument on the numbers, the Government miss another point: in Scotland, not only do we want students to come, but we want some of them to stay afterwards, and the current system has impacted on that severely.

The Government also argue, on the basis of a small and imperfect evaluation report, that the Fresh Talent scheme had flaws. I agree with my hon. Friend the Member for Perth and North Perthshire that the scheme was a great success, but as my hon. Friend the Member for Dundee West (Chris Law) said, no one is arguing that it was absolutely perfect. The point made by the hon. Member for Edinburgh South was absolutely right: we should not ditch a whole scheme on that basis but address its imperfections, improve it and make it work.

The principal argument is that a significant number of students graduating from Scottish universities then went to work in other parts of the UK. However, the key point is that the visa did not prohibit that happening. Those students were doing absolutely nothing wrong, so the answer is simple: make it a formal condition on the face of the visa that the person lives and works in Scotland. That should be no more difficult than making it a condition of a person’s visa that they study on a particular course or work for a particular employer.

The Government argue that there is already a competitive post-study work offering, but the UK post-study work offer barely exists, in that there are basically four months of additional leave after graduation in which to find a job that qualifies for tier 2. That does not remotely compare to the offerings of competitor countries in north America or Australia and New Zealand.

I could spend my whole speech discussing why tier 2 is not working well for Scotland in particular; my hon. Friend the Member for Perth and North Perthshire also touched on that. Our small and medium-sized enterprises are at a significant disadvantage in complying with the rules and regulations, compared with the big multinationals that make full use of them in other parts of the UK economy. Suffice it to note—as my hon. Friend did—that just 6% of tier 2 sponsors are in Scotland and Northern Ireland compared with 62% in London and the south-east, so the rules are working for London. However, it is not just Scotland that is struggling to compete—other parts of the UK are losing out as well.

[Pete Wishart]

I am glad my hon. Friend picked up on the point about 62% of tier 2 sponsors being in London and the south-east. That area does not require the international students, so I am pretty certain that he would agree that we should try and make the situation equitable across the United Kingdom and incentivise people to come to Scotland. That surely reinforces the call for regional variation on these issues, so that we can get international students in Scotland and not where they are probably not required—that is, in London and the south-east.

[Stuart C. McDonald]

My hon. Friend is absolutely right. This is not just about Scotland—Northern Ireland, Wales and parts of England are struggling to compete with London. The one-size-fits-all rules are set according to the economic needs of London and the south-east, so an extra couple of months, as is offered in the Government pilot scheme, will not alter the position. As other hon. Members have said, the failure to include any Scottish universities in that pilot was a slap in the face and a political own goal.

The Government are trying to defend the indefensible. I will close with two broader points. First, as has already been touched on, this is ultimately being driven by the Prime Minister’s obsession with the net migration target, which is making her pick the low-hanging fruit—in other words, international students. In fact, the current Home Secretary has tried to ditch or water down the net migration target—I think she probably knows it is a nonsensical target. We also know that both the Foreign Secretary and the Chancellor think that students should be taken out of the net migration target. The Home Secretary was asked about this issue three times on Monday, but she dextrously avoided saying whether she agreed with her colleagues. Perhaps the Minister will answer instead: does he agree that, if we are to be stuck with this ludicrous net migration target, the target should exclude students? While we are at it, there is a strong case for excluding Scotland from the net migration altogether as well.

My second broader point is about what this debate means more generally for Scotland’s population. The post-study work visa is significant for Scotland but, in another sense, it is just a smaller aspect of a much bigger question about the extent to which the UK Government are prepared to consider particular immigration rules for Scotland. That question is of immense importance. As hon. Members have said, our demographic needs are different, as the Committee’s report highlighted. The challenge for Scotland has now become growing the population and retaining the proportion of our population that is of working age. If the Government are not even going to engage meaningfully on post-study work, what chance do we have of meaningful engagement on broader issues about managing Scotland’s population?

Government must come to terms with the idea that different parts of the UK can have different immigration policies. The idea is not novel—Australia and Canada do it and the Minister has often said that there is a different shortage occupation list for Scotland, so it can be done—and its time has come. An important forthcoming example is the issue of free movement. If free movement of people is not to be retained for the whole United Kingdom, the Government must quickly get working on how it can be retained for some parts of the UK, including Scotland. As my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) said, if the Government do not get that message, then to put it mildly, they are playing with constitutional fire.

In conclusion, I know that the Minister met with Minister Alasdair Allan from the Scottish Government yesterday afternoon. I do not expect the Minister to perform a 180-degree U-turn today, welcome as that would be, but I expect and hope for more than a straightforward “No”. I expect a genuine willingness to engage, negotiate and resolve the impasse that has developed not just between the UK Government and the Scottish Government, but between the UK Government and Scotland’s universities, businesses, trade unions, students and civic society—all of Scotland, essentially.

--- Later in debate ---

[The Minister for Immigration (Mr Robert Goodwill)]

It is a great pleasure to serve under your chairmanship, Mr Rosindell. If I may, I will leave a couple of minutes at the end for the hon. Member for Perth and North Perthshire (Pete Wishart), who moved the motion, to respond. I congratulate him on securing the debate and I congratulate all hon. Members who have participated on their valuable contributions to a spirited debate. Indeed, such has been the turnout for the Scottish National party, it has almost been like a scene from “Braveheart”. I welcome the shadow Secretary of State for Scotland. During my short time as Immigration Minister, I have faced seven Members of the Labour party across the Dispatch Box, and I have had seven slightly different takes on what Labour’s immigration policy might be. I hope we can get some clarity at some point.

It would be careless of me not to begin with the fact that the Scottish people knew, when they voted in the Scottish independence referendum, that issues such as immigration and defence were not devolved matters. Therefore, the majority agreed that that should continue to be the situation. Incidentally, despite what the shadow Secretary of State said about my party’s attitude to Scotland, I want to put on the record that Scotland, like Yorkshire, is an important part of our country and that use of the word “colony” is really not appropriate. Perhaps the people in Scotland are slightly more generous than people from Yorkshire, but both are vital parts of our country. More Scots chose to vote Conservative than Labour in the last Scottish election. Indeed, many would say that Labour has become irrelevant in Scotland and that only the Conservatives are seen as offering a real choice for our people north of the border.

I am pleased to say that, on some key issues, there are no differences between any of us, whichever side of the border we are on. International students make an important contribution to UK educational institutions not just because of the income they bring, but because of the wider perspective they contribute and the lasting links they forge with this country. Let me be clear: there is no limit on the number of genuine international students who can come to study in the United Kingdom, and we have no intention of imposing any limit or cap. I hope that all hon. Members will acknowledge and welcome that fact. Let me also be clear about what that means in practice. The Government have taken seriously our duty to clear up the mess we inherited from the previous Government, including stopping more than 900 bogus institutions bringing in international students, and the number of genuine international higher education students has risen. Indeed, since 2010, the number of international students at Scottish universities has increased by 14%. I wish that those who seem to trade in doom and gloom would celebrate that fact and help the excellent universities in Scotland to flourish.

The hon. Member for Edinburgh North and Leith (Deidre Brock) raised a point about numbers falling. I point out that non-EU enrolments at Scotland’s Russell Group universities have increased. Between 2011-12 and 2014-15, the University of Edinburgh’s numbers were up by 9%, and the University of Glasgow’s were up by 32%. That is a great achievement by some of our great institutions.

[Stuart C. McDonald]

The point here is not a comparison between where we are now and where we were a few years back. It is about where we are now and where we could have been if we still had the post-study work visa. Universities Scotland has highlighted the fact that it has lost out on hundreds of millions of pounds of income, so we would have had more international students. That is an appropriate comparison and that is what the Minister has to address.

[Mr Goodwill]

The hon. Gentleman continually makes such points, but we must always bear in mind that many of those numbers are people who did not come here to study at all in some cases. They enrolled in bogus colleges intending not to study, but merely to take low-skilled jobs as a way of getting into the country and, in some cases, achieving residency in due course.

Let me turn to the issue of post-study work in Scotland, dealing first with the Fresh Talent—Working in Scotland scheme, which closed in 2008 because of its manifest limitations. An evidence review of the Fresh Talent scheme published by Scottish Government Social Research in 2008 refers to analysis of in-country applications conducted by the Border and Immigration Agency between June and August 2007, showing that a significant proportion of respondents were not in the types of job they would have liked to be in, with about four in 10 stating that their employment was not linked to their career choice, and more than half saying that it was not even appropriate to their level of education.

The Government closed the tier 1 post-study work route in April 2012. The route granted free access to the UK labour market for two years to international students who graduated in the UK. Too many individuals in the route were unemployed or in low-skilled work, and too many were using the student route as a means to work in the United Kingdom without any intention to study. We also saw a large number of fraudulent applications, which undermined our work routes and damaged the reputation of our education system. However, the closure of the two schemes does not mean that the United Kingdom fails to provide an attractive offer for international graduates of our universities. We have a generous offer for international students graduating from UK universities, which contains important safeguards to protect against abuse, the undermining of our work migration routes, and students being exploited by being used in low-skilled work or remaining in the United Kingdom unemployed.

With our current post-study provisions, the number of international students switching from tier 4 into tier 2 in the UK has been increasing. In 2015, the number was more than 6,000—up from around 5,500 grants in 2014, and around 4,000 grants in 2013. The hon. Member for Perth and North Perthshire made the allegation that we will “boot them out”. That is not the case. He talked about people having to find a job in four months, which is also not the case. They can start looking for a job before they finish their course, and many participate in the famous milk round, in which employers go around universities before exams and graduation have been completed. The important point is that there is no limit, and never has been, on the number of international graduates of UK universities who can move into skilled jobs in the UK workforce. There is no limit on the number of tier 4 students who can move into tier 2 jobs. Students moving into skilled jobs do not count against the annual tier 2 general limit.

Another point was on students being able to stay for up to two or four months before switching. Four visa categories are available to non-European economic area graduates of UK universities who wish to remain in the UK to work. First, those with an offer of a graduate-level job that pays an appropriate salary may take sponsored employment through tier 2. Secondly, those who have been identified by their higher education institution or by UK Trade & Investment can stay on for up to two years to develop their businesses in the UK under the tier 1 graduate entrepreneur category. Thirdly, graduates wishing to undertake a period of professional training or a corporate internship related to their qualifications can do so under tier 5. Lastly, PhD students can stay in the UK for an extra year under the tier 4 doctorate extension scheme to look for work or to start their own business.

We need to be clear that this debate is not about skilled work or ensuring that graduate-level skills are available to Scotland. That is already provided for. The Scottish National party is arguing for the right for international graduates to stay in this country to work in low-skilled and unskilled jobs. I fail to see how that benefits the economy of any part of the United Kingdom.

Although I recognise and welcome the work in Scotland to reduce unemployment rates—I note that there are still 129,000 unemployed people in Scotland—as in other parts of our country, the unemployment rate has fallen in recent years. Many of those people may already have the skills, or could acquire the skills, to take up jobs that do not require graduate training.

The other argument advanced by the SNP is that not having post-study work schemes makes the UK education sector less competitive than all our key international competitors. Perhaps we should look at the facts. An international student graduating from a UK university can stay in this country for at least two months after graduating, during which they can do whatever they like, including both working and looking for tier 2 employment that would allow them to stay on. If they have undertaken a course lasting more than a year, which covers the majority of international students in the UK, they can remain for four months.

The only country with a greater number of international students than the UK is the United States of America. In the United States international graduates, other than those undertaking work directly relevant to their degree, must leave the country within 60 days of completing their programme. In passing, I note that Canadian study permits become invalid 90 days after the conclusion of a study programme, which again is less generous than the position that applies to most international students in the UK. I hope we will not hear any more rhetoric about the UK’s uncompetitiveness on international students.

[Stuart C. McDonald]

The Minister is talking about the student visa itself. The US, Canada, Australia and New Zealand all have post-study work offerings that allow people to switch without, say, salary thresholds for 12 months or, in one case, 24 months. The Minister is not making a fair comparison.

[Mr Goodwill]

I have mentioned the four routes that graduates can take, but I make it clear that coming to the UK to study and obtain a degree is not a way into low-skilled work or unemployment. The vast majority of students come to the UK to study and then go back to contribute to their country’s economy. Indeed, on the statistics, those students do not contribute to net migration. If a person comes here to study and leaves at the end of their course, they do not contribute to net migration.

The hon. Members for Dundee West (Chris Law) and for Rutherglen and Hamilton West (Margaret Ferrier) spoke of the tier 4 visa pilot. In recent months, some Scottish National party Members seem to have fixated on the claim that Scottish universities have somehow been deliberately and consciously excluded from the tier 4 visa pilot. The four universities chosen were selected objectively, with no prejudice—indeed, if there were prejudice, I suspect we would have had one in Yorkshire—and, as a result, the pilot includes the top four institutions based on their consistently low levels of visa refusals. There was no agenda to limit those involved to universities in any region of the UK.

The hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) is keen on putting words in my mouth, and I am not saying that all institutions not currently involved in the pilot have a poor record of immigration compliance. There are plenty of excellent institutions throughout the UK, including in Scotland. However, the four institutions participating in the pilot have the best record, which is why they have been chosen. We have deliberately kept it small scale, and I assure hon. Members that it will be properly evaluated. Should the pilot prove a success, it will be rolled out more widely—including, I hope, to universities in Scotland.

Finally, the Government continue to engage widely with the further and higher education sectors. Only yesterday, as has been mentioned, I met Dr Alasdair Allan, the Scottish Government’s Minister for International Development and Europe, to discuss these points.

I have time to touch on one or two other points. It was claimed that the number of Indian students coming to the UK has fallen by half, which should be viewed in the context of the clampdown on abuse. We issue more tier 4 visas to students from India than to students from any other country except China and the United States. The proportion of Indian students in the UK who are studying at a university has increased from some 50% in 2010 to some 90% in 2015. The trend of smaller volumes of students with greater concentrations in higher education is likely to reflect the recent policy changes to clamp down on immigration abuse by non-genuine students and bogus colleges. In 2015, some 90% of Indian students who applied for a tier 4 visa were issued one, which is up from 86% in 2014 and 83% in 2013. The Indian student grant rate is higher than in our competitor countries, and in quarter 3 of 2016 there was a 6% increase in the number of tier 4 visas issued to Indian students compared with 2015.

As anticipated, this has been a lively debate. I thank all hon. Members for their contributions. I reiterate that genuine students are welcome, and will continue to be welcome, in the United Kingdom. The UK has an enviable reputation as the home of world-class educational institutions, and the Government will continue to help them to ensure that they can continue bringing in the best and brightest students from across the globe to all parts of the UK, particularly Scotland.