Why ministers shouldn't celebrate today's migration figures

With a dramatic fall in the number of international students, the government’s policy 'success' has come at a considerable economic cost.

Today’s migration statistics - which showed a sharp fall in net migration (the difference between immigration and emigration) from 242,000 in the year ending September 2011 to 153,000 in the year ending September 2012 - are, on the face of it, a rare piece of good news for the government. The public want to see less immigration, and these numbers suggest that ministers are making progress towards their commitment to reduce net migration to less than 100,000 by 2015.

However, there is a catch. The decline in immigration has been driven in large part by falling numbers of international students. This highlights three major problems with the government’s strategy, which have real implications for whichever party is in power after 2015.

The first problem is that the government’s 'success' has come at a considerable economic cost to the UK, at a time when the economy needs all the help it can get. Education is one of the UK’s most successful export sectors, and international students contribute an estimated £8bn to the UK economy every year. The government will argue that student numbers are falling because new rules are reducing abuse of the student visa regime. Tougher rules are, no doubt, reducing abuse, but there is no evidence that the scale of abuse at the time the new rules came into place was high enough to explain the subsequent drop in numbers – it is certain that a large number of genuine students are being kept out.

The government will also argue that the ‘brightest and the best’ are still coming to the UK, pointing to figures that show a 5 per cent increase in the number of visas issued via universities (compared to a 46 per cent decline in the numbers issued via FE and English language colleges). But the universities are still, rightly, very concerned. A previous trend of rapid growth has been stopped in its tracks, and a substantial number of their international students come via the UK FE sector – the full impacts of the new rules on universities have yet to be seen.

The second problem is that the impact of falling student numbers on net migration is likely to be short-lived. Since most students stay in the UK only for a short time, reduced student immigration now will mean reduced emigration in the future, which by 2015 could partially reverse the falls in net migration we are seeing now. The Home Office’s own research suggests that only 18 per cent of student migrants are still in the UK after five years. That means that the 56,000 fall in student immigration in the year to September 2012 will only reduce net migration by just over 10,000 in the medium term.

The final problem is that the overwhelming focus on the net migration target risks missing the point with the public. While the government clamps down on groups that the public are least worried about, including international students, in order to meet its target, it is failing to confront many of the issues that cause real concerns.

Migration is a complex issue, which raises genuine trade offs in both policy and political terms. The public, rightly, want to see open and honest discussion about migration from all sides of the political spectrum, but the ritual debate about net migration does not help us to achieve it.

The net migration target may appear to be good politics for the government, but it also lays a number of traps for the future – Labour must continue to resist pressure to adopt the target, and the Conservatives would do well to consider whether or not it makes sense for them to retain it going into the next election.

Sarah Mulley is Associate Director at IPPR


David Cameron delivers a speech on immigration at in Ipswich, eastern England. Photograph: Getty Images.

Sarah Mulley is associate director at IPPR.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.