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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Labour's unstoppable force meets its immovable object

Team Corbyn are confident. But so are their opponents.

If you come at the king, you best not miss. And boy, have they come at him: over 40 resignations from the opposition frontbench and a motion of no confidence in Jeremy Corbyn’s leadership that both loyalists and rebels expect to pass easily.

What happens next? The ruling executive of Momentum, the organising force behind Jeremy Corbyn’s supporters in the party grassroots, met Corbyn in his office late last night. It would be overstating it to say that the mood was jubilant but Corbyn and his allies are confident of victory in the struggle for supremacy. “Game on,” texted one senior figure. “He won’t stand down,” another told me, “He feels he owes it to the membership to let them decide.”

Within Team Corbyn, they remain convinced that the shadow cabinet “are going to war without an army”, in the words of one insider. Others are already looking forward to the policy conference of Labour and Britain’s largest trade union, Unite, where there is a chance the union may adopt a policy of supporting mandatory reselection of Labour MPs.

Are they right? Having called and spoken to party members, it is certainly clear that Corbyn’s standing among the membership is not quite as high as it once was.

But members are unclear what they want next – several mentioned Keir Starmer, although my instinct that is largely because, as one member conceded, he is still very much a “blank slate” on which the hopes of the party’s electorate can be projected. What most want is someone who would retain much of the politics but with greater competence – the Vice News documentary seems to have done more damage than the referendum on the whole – and without the thirty years in politics for the right-wing press to pick over. The difficulty is that it is hard to see a politician in the parliamentary Labour party answering to that description or even close to it. While for the rebels, finding a winner is no longer the priority, surviving a snap election in October is, loyalists in the PLP and the grassroots are either unconvinced that the result will be heavy defeat, or unconvinced that any of the replacements would do better.

The difficulty for Corbyn’s critics is, rather like Labour under Ed Miliband, although they might be the repository for people’s irritation and uncertainty, there are few making a positive choice to vote for any of the available candidates. My instinct is, if Corbyn is on the ballot, the polls might show a tighter picture, he might have a tougher time on the campaign trail that he did last time, and he might have a closer fight as far as constituency nominations were concerned, but he would ultimately win, and win easily.

That’s before you get into Momentum’s ability to expand the electorate further.  Although appearing at last night’s rally was criticised by some journalists and cost Corbyn’s team at least one frontbencher, who, while keen to avoid prolonging the fighting, didn’t want to endorse the attacks on his colleagues in the parliamentary party, ultimately the petitions in support of Corbyn and the impromptu rally have given them more data to go out and recruit people to vote in the next leadership election, more than making up for any loss of support within the party-as-it-is.

But – and it’s a big “but” – I’m not convinced that Corbyn will make it to the ballot.

The party’s legal advice, from the party’s lawyers, GRM Law, is that Corbyn will have to secure 50 nominations to make the ballot, just as any challenger will. My feeling, with MPs of all parties convinced that there will be an election in October as soon as the new Conservative leader is in place, is that pressure from activists to nominate Corbyn will be less fruitful than it was in 2015. (That said, Labour MPs are skittish.) 

The Labour leadership themselves have obtained legal advice showing the reverse from Doughty Chambers. But whichever way the NEC rules, neither side will be able to take it to the courts. Most legal professionals estimate that Labour, like a trade union or a private members’ club, is exempt. “You accept the rules of the club when you join the club,” and that’s the end of it. My impression is that the judiciary would be reluctant to get involved.

The difficulty with predicting what happens next is it brings two of Labour’s iron laws into direct conflict: Labour never gets rid of its leader, and Tom Watson always wins. And I don’t think anyone is sure which of those laws is going to end up broken.

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.