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Business leaders have called for Rachel Reeves to scrap a Proposed Charges on University Fees for international students, warning that this could have major consequences for growth and global competitiveness.
In his open letter shared with IndependentBusiness groups have criticized what they call a “university tax” and warn that a planned 6 per cent increase on fees will have “unintended consequences” for the UK.
Note Pressure on Chancellor has increased before the budget And the move comes after ministers unveiled a series of measures to tighten student visa rules earlier this year.
The letter, signed by 15 groups including UK Music, Business LDN and Tech UK, claims international students contribute tens of billions to the economy each year, “supporting local businesses and boosting regional regeneration”.
“The decline in international student numbers may also indirectly impact domestic student opportunities,” the letter said.
“Income from international fees helps subsidize the costs of domestic students.”
They added: “We therefore urge the Government to halt the implementation of the levy, carry out a full risk assessment and fully consult with the higher education and business sectors on a sustainable funding model that protects opportunities for disadvantaged students without undermining one of the UK’s most successful export markets.”
The government’s immigration white paper published in May said ministers would consider imposing a levy on higher education income from international students and ministers are considering 6 per cent.
After the white paper was published – which also said the government would reduce graduate visas to 18 months – Sector leaders warned the plans could deter international students from coming to the UK and increase financial challenges for universities,
Henry Murison, chief executive of the Northern Powerhouse Partnership, one of the letter’s signatories, said international students are “central” to the economies of cities such as Sheffield, Manchester, Leeds and Newcastle.
“They support local businesses, create jobs and help sustain our universities, which are vital to the productivity growth of urban areas,” he said.
“The proposed levy risks eliminating one of the few regions where the Northern Growth Corridor currently outperforms its competitors globally.”
John Dickie, chief executive of Business LDN, which represents companies including Deloitte and Uber, said scrapping the levy would “support growth and the UK’s international competitiveness”.
“Foreign students make a vital contribution to the economy, so we must start welcoming the most talented people from around the world instead of turning them away,” he said.
Research from policy consultancy PublicFirst, released in September, estimated that nine out of 12 UK regions would suffer widespread losses of more than £100 million in the first year of the levy due to the potential loss of international students.
The impact will be greatest in London, at £480 million, followed by Scotland (£197 million) and then the South East (£163 million).
Researchers said 37 of the 50 most affected constituencies were held by the Labor Party.
A government spokesperson said: “The international student levy will provide funding to reintroduce targeted maintenance grants to address barriers to opportunity for disadvantaged students.
“We have also taken tough decisions to put universities on a stronger financial footing. We are increasing tuition fees annually in line with inflation and have refocused the Office for Students on monitoring the financial health of the sector.
“We are taking action to open up access to universities, restoring them as engines of aspiration, opportunity and growth. We will present further details in the Autumn Budget.”