How do you export universities? By bringing students here

Cameron isn't just throttling our "cultural" exports — he is throttling our <em>actual</em> exports.

Polly Toynbee has a piece in today's Guardian headlined "With this student visa policy, Cameron is throttling our cultural exports". She writes:

Remember when trade was to be our great escape? Government forecasts said net trade (exports minus imports) would rise by 2.4%, as we stole a march on our neighbours. Since then sterling has dropped by a quarter, its biggest fall since 1945. But devaluation has brought no export bonanza, with net trade falling. Yet 70% of government cuts are still to come and David Cameron promises "further and faster" deficit cutting…

So what else can we sell? Two exports rich and ripe for growth are our universities and arts, as valuable to life here as for the wealth they earn abroad. Yet the government actively stymies both, obstructing those two sectors where Britain has – but may easily lose – an international competitive trading edge.

Attracting foreign students to prestigious universities should be a booming export trade. Five chairs of parliamentary committees joined in an unprecedented joint call for visas for non-EU students to be excluded from the Home Office's cap on net immigration figures, a cap blocking an £8bn industry. Genuine university students should count as temporary visitors, valuable in cash and culture for our trading future. But this week the abrupt government answer was no. Immigration policy trumps all else.

It's a good piece, but her headline writers do her a disservice. Cameron isn't just throttling our "cultural" exports — he is throttling our actual exports.

The services sector is easily the most important in the national economy. The ONS gives it a weight of 770 out of 1000 when calculating GDP, implying that the sector contains roughly 77 per cent of the entire economy.

But the thing about services is that they can't really be exported the same way traditional goods are. Sometimes, that makes life easier; for instance, I'm in the service sector, and "exporting" the fruits of my labour is as simple as someone in another country opening up newstatesman.com.

But frequently, exporting services requires people to move. And that's the case for our university sector. We can export that expertise in the style of the University of Nottingham, and open up hugely expensive campuses overseas. Or we can just let people come to Britain. They pays their money, they gets their education.

It's not a small market, either. A BIS paper highlighted by Jonathan Portes estimates that, in 2008/9, the value of the sector was almost £8bn. As Portes writes:

That’s not just tuition fees, nor does it just benefit the education sector. If an Indian student buys a Marks and Spencer’s ready meal in Sheffield, that’s a UK export to India: real money, generating jobs and growth, and improving the trade balance.

Toynbee's right that Cameron is attacking our culture capital, and that that will have pernicious effects in the future. But he's also attacking our actual capital. And that's having pernicious effects now.

Students at London Metropolitan University protest the Government's decision to remove its right to grant visas. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Ken Livingstone says publicly what many are saying privately: tomorrow belongs to John McDonnell

The Shadow Chancellor has emerged as a frontrunner should another Labour leadership election happen. 

“It would be John.” Ken Livingstone, one of Jeremy Corbyn’s most vocal allies in the media, has said publicly what many are saying privately: if something does happen to Corbyn, or should he choose to step down, place your bets on John McDonnell. Livingstone, speaking to Russia Today, said that if Corbyn were "pushed under a bus", John McDonnell, the shadow chancellor, would be the preferred candidate to replace him.

Even among the Labour leader’s allies, speculation is rife as to if the Islington North MP will lead the party into the 2020 election. Corbyn would be 71 in 2020 – the oldest candidate for Prime Minister since Clement Attlee lost the 1955 election aged 72.

While Corbyn is said to be enjoying the role at present, he still resents the intrusion of much of the press and dislikes many of the duties of the party leader. McDonnell, however, has impressed even some critics with his increasingly polished TV performances and has wowed a few sceptical donors. One big donor, who was thinking of pulling their money, confided that a one-on-one chat with the shadow chancellor had left them feeling much happier than a similar chat with Ed Miliband.

The issue of the succession is widely discussed on the left. For many, having waited decades to achieve a position of power, pinning their hopes on the health of one man would be unforgivably foolish. One historically-minded trade union official points out that Hugh Gaitskell, at 56, and John Smith, at 55, were 10 and 11 years younger than Corbyn when they died. In 1994, the right was ready and had two natural successors in the shape of Tony Blair and Gordon Brown in place. In 1963, the right was unprepared and lost the leadership to Harold Wilson, from the party's centre. "If something happens, or he just decides to call it a day, [we have to make sure] it will be '94 not '63," they observed.

While McDonnell is just two years younger than Corbyn, his closest ally in politics and a close personal friend, he is seen by some as considerably more vigorous. His increasingly frequent outings on television have seen him emerge as one of the most adept media performers from the Labour left, and he has won internal plaudits for his recent tussles with George Osborne over the tax bill.

The left’s hopes of securing a non-Corbyn candidate on the ballot have been boosted in recent weeks. The parliamentary Labour party’s successful attempt to boot Steve Rotheram off the party’s ruling NEC, while superficially a victory for the party’s Corbynsceptics, revealed that the numbers are still there for a candidate of the left to make the ballot. 30 MPs voted to keep Rotheram in place, with many MPs from the left of the party, including McDonnell, Corbyn, Diane Abbott and John Trickett, abstaining.

The ballot threshold has risen due to a little-noticed rule change, agreed over the summer, to give members of the European Parliament equal rights with members of the Westminster Parliament. However, Labour’s MEPs are more leftwing, on the whole, than the party in Westminster . In addition, party members vote on the order that Labour MEPs appear on the party list, increasing (or decreasing) their chances of being re-elected, making them more likely to be susceptible to an organised campaign to secure a place for a leftwinger on the ballot.

That makes it – in the views of many key players – incredibly likely that the necessary 51 nominations to secure a place on the ballot are well within reach for the left, particularly if by-election selections in Ogmore, where the sitting MP, is standing down to run for the Welsh Assembly, and Sheffield Brightside, where Harry Harpham has died, return candidates from the party’s left.

McDonnell’s rivals on the left of the party are believed to have fallen short for one reason or another. Clive Lewis, who many party activists believe could provide Corbynism without the historical baggage of the man himself, is unlikely to be able to secure the nominations necessary to make the ballot.

Any left candidate’s route to the ballot paper runs through the 2015 intake, who are on the whole more leftwing than their predecessors. But Lewis has alienated many of his potential allies, with his antics in the 2015 intake’s WhatsApp group a sore point for many. “He has brought too much politics into it,” complained one MP who is also on the left of the party. (The group is usually used for blowing off steam and arranging social events.)

Lisa Nandy, who is from the soft left rather than the left of the party, is widely believed to be in the running also, despite her ruling out any leadership ambitions in a recent interview with the New Statesman.However, she would represent a break from the Corbynite approach, albeit a more leftwing one than Dan Jarvis or Hilary Benn.

Local party chairs in no doubt that the shadow chancellor is profiling should another leadership election arise. One constituency chair noted to the New Statesman that: “you could tell who was going for it [last time], because they were desperate to speak [at events]”. Tom Watson, Caroline Flint, Chuka Umunna, Yvette Cooper, Andy Burnham and Liz Kendall all visited local parties across the country in preparation for their election bids in 2015.

Now, speaking to local party activists, four names are mentioned more than any other: Dan Jarvis, currently on the backbenches, but in whom the hopes – and the donations – of many who are disillusioned by the current leadership are invested, Gloria De Piero, who is touring the country as part of the party’s voter registration drive, her close ally Jon Ashworth, and John McDonnell.

Another close ally of Corbyn and McDonnell, who worked closely on the leadership election, is in no doubt that the shadow chancellor is gearing up for a run should the need arise.  “You remember when that nice Mr Watson went touring the country? Well, pay attention to John’s movements.”

As for his chances of success, McDonnell may well be even more popular among members than Corbyn himself. He is regularly at or near the top of LabourList's shadow cabinet rankings, and is frequently praised by members. Should he be able to secure the nominations to get on the ballot, an even bigger victory than that secured by Corbyn in September is not out of the question.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.