Why is this man being allowed to preside over the wilful destruction of a major British export industry?

Imagine, if you will, a Government in the midst of a recession that chooses to insult investors who bring £8 billion a year into the UK economy. And it does so purely for reasons of ideology and prejudice, with little regard for the economic consequences. Such an approach would surely be the subject of widespread ridicule, and the minister responsible given the opportunity to spend a little more time with their constituents and their backbench colleagues.

That is precisely what is happening to our universities and colleges, as they strive to compete with Australia, Canada and the US for the brightest and best students in the world. This week, nearly 70 university chancellors have written to the David Cameron urging him to back UK universities in their efforts to recruit genuine international students. What other major export industry would have to go on bended knees to beg the PM's backing?

Yet the coalition's ill-considered immigration policy is turning students away. Already numbers from India have fallen, and other major countries are likely to turn elsewhere unless they see Britain welcoming international students rather than treating them like pariahs. Essentially the problem is this: the coalition is committed to reducing net migration at a time when the number of Britons migrating is falling. There are already strict controls on overseas workers, so the only way to achieve this is to cut student numbers.

Yet as the universities point out in their letter:

In an age of increasing global mobility, the number of individuals considering a university education abroad is growing rapidly. In this market for talent – and export income – the UK performs exceptionally well, with 9.9% of the total market share in 2009, and export earnings of £7.9 billion. International students also play an important role in towns and cities up and down the country, and contribute significantly to local economies. There is a clear opportunity to build on this success, with forecasts suggesting that export earnings from this activity could more than double by 2025.

Since the formation of the coalition, the Home Office has tried to cut immigration to the UK in several ways. It was perfectly reasonable to clamp down on 450 bogus colleges and prevent them from sponsoring students.The Border Agency claims that this has meant 11,000 fewer bogus students coming to the UK. At the same time, universities and colleges are licensed as Highly Trusted Sponsors to admit overseas students and must take responsibility that students will turn up to and attend courses, and that they are legitimate. Institutions that fail in this quickly lose their status, so they have a strong incentive to do so. It is not always easy, as the wholly inept Border Agency is often behind on the paperwork, but it makes some sense. 

What makes no sense is keeping students within the net migration figures: it is like capping manufacturing exports or saying we have enough tourists this year, thanks.

Moreover, the impression from outside is not that there is a sensible balance being struck between recruiting legitimate students and barring bogus ones. Rather it is that an increasingly zealous minister at the Home Office, Damian Green, the man most responsible for the chaos at the borders last month, seems hell bent on discouraging students from coming here in the first place. The Home Office has dusted down all its old wheezes and finally found a willing buyer in the once moderate and mild-mannered Kent MP. As a result, an £8 billion export industry is playing second fiddle to their fantasy targets. So much so that Green told a Policy Exchange event in February that

there is scope for further examination of whether and to what extent foreign student tuition fees boost the UK economy and, crucially, how UK residents ultimately benefit from that. 

Universities UK has argued that the total ‘export earnings’ of higher education, including tuition fees and spending by non-UK students, could grow from £7.9bn in 2009 to £16.9bn in 2025 with the right policy environment.Its research also highlighted the extent of growth in Indian postgraduates, as well as higher international student mobility from China, the Middle East and Nigeria. A recent IPPR report has calculated that current Government targets could see losses of up to £3bn a year from students: in truth it could be a lot higher if the Green message reaches those growing markets. Moreover, these students are not just an invisible export, as the IPPR adds

The difference in terms of the dynamic contribution to the economy over 20 years, in terms of losing so many young, highly qualified and motivated migrants is hard to calculate, but would likely be very large.

It is time for David Cameron to take a decisive stance on this issue, and to back British higher education. If he wants a simple solution, he could start by emulating the Australians - one of our big competitors for East Asian, Indian and Chinese students by treating students differently in the statistics. The IPPR explains:

Australia keeps a record of international students in its estimates of total net overseas migration (NOM), but these fall within the ‘temporary’ category (alongside business long-stay migrants, working holidaymakers and long-term visitors) and there are few formal caps on these numbers, although the government is able to exert some control through policy, such as by raising English language requirements.

Then he should borrow another idea from Tony Blair, and launch a major Downing Street campaign actively to promote UK higher education in overseas markets. The message should be that Britain welcomes international students - and he should show that his government means it.