With the general election rapidly approaching, Home Secretary Theresa May is clearly still under pressure to reduce net migration in the hope of retaining the populist vote under threat from UKIP, but at what cost?

May is said to be pushing for international students to be required to leave the UK as soon as they finish their studies, forcing them to return to their home country to apply for a work visa if they wish to return. Given the recent dramatic drop in international students coming to the UK, there is a genuine concern that the UK’s increasingly restrictive immigration system and these recent proposals are sending a hostile message to talented students and prospective skilled workers. This is damaging to our global economic competitiveness and is counter to the overwhelming evidence documenting the skills gap that exists in many growth industries in the UK, particularly manufacturing and engineering. 

What is so depressing is not that this is a mistake – these things happen – but that it is so clearly a misjudgement that only two conclusions can be taken from it.  First, that the measure has not been considered with the input of those to whom it is most relevant, and/or second, that foreign students represent a softer target than dependants and partners when the Government casts around for ways to appear to be stiffening Britain’s borders, and hang the economic consequences further down the line.

The Business Immigration Team at Squire Patton Boggs has joined forces with the manufacturing and engineering industry body EEF in a combined response to the All Party Parliamentary Group on Migration’s inquiry into the closure of the Tier 1 (Post Study Work) visa and the importance of international graduates to the UK economy.  The full response explains that the closure of the Post-Study Work visa which allowed international students in the UK to work here for two years after their studies, has had a detrimental impact on UK businesses. UK employers need a talent pipeline from higher education to employment, particularly in sectors such as science, technology, engineering and mathematics (STEM), but the closure of the Post-Study Work visa is causing a serious blockage.

On closing the Post-Study Work visa, the Government argued that it was subject to ‘abuse’ as graduates were not taking the skilled positions for which the visa was intended. However, our response puts forward that if ‘abuse’ was genuinely the main concern, as opposed to, say, naked political expediency, imposing conditions regarding permitted types of employment would easily have avoided the need to abolish the visa. For example, the visa could have been limited to new graduates in certain occupational areas or ‘shortage occupations’ (those that cannot be filled by domestic workforce).  In reality, it was the other factors listed in the Government’s Impact Assessment at the time that brought this visa to an end: public opinion and the need to reduce net migration levels.

But surely UK employers’ vital business need for STEM graduates should now outweigh any other considerations?   With two-thirds of employers planning to recruit engineering graduates over the next three years, shutting the door to top international talent is – in James Dyson’s words – “sheer madness”  http://www.employmentlawworldview.com/dyson-exposes-vacuum-in-home-offices-position-on-visas-for-non-eu-graduates/.   We train a large number of students in key sectors for the UK economy and then force them to leave unless they find an employer willing to go through the cost and significant administrative burden of sponsoring them under Tier 2 (a big ask, particularly for SMEs).

Hard to fill vacancies in the UK manufacturing industry increased by 5% to a whopping 35% from 2011 to 2013.  Language skills play a part in this, where those in key industries look to tap into overseas markets.  Nearly seven in ten manufacturers surveyed in our response to the APPG inquiry expected that demand for foreign language skills would either stay at its current level or increase in the coming years, the only surprise on that figure being that it is so low.  On the other hand, it is no surprise at all that only a very limited number of domestic STEM graduates possess those skills.  Ms May’s proposals contain no indication of how that vital gap will be plugged, which takes us respectfully back to the two conclusions rehearsed above.

In the absence of the Tier 1 (Post Study Work) visa employers must now sponsor international graduates straight out of university – but if this latest proposal is implemented, they would have to wait for those students to return to their home country and then find a way to sponsor them from there, by which time the odds must surely be that they will have gone elsewhere.  Even in the current system, four in ten companies in our research said they had difficulties securing a Tier 2 sponsors licence and almost half had difficulties obtaining a visa for a specific graduate.

At the same time, the US, Australia and Canada have all retained a graduate visa. In the case of the United States, post-study work must relate to the area of study – but STEM students’ visas can be extended for 18 months after graduation while they seek sponsorship from a company. Theresa May should be mindful of the approach adopted by our international peers and ensure that the UK is still an attractive place not just to do business, but also to be employed in it.