Stringent visa laws are turning away talented foreign students – and potentially the next Ratan Tata – according to a West Midlands MP.
The number of students from India coming to study at UK universities fell by 23.5 per cent last year, including a 28 per cent drop at postgraduate level, and Adrian Bailey MP, chairman of the Business, Innovation and Skills Committee said this could be robbing the country of vital investment potential.
Labour West Bromwich West MP Mr Bailey also called for universities to be put at the heart of regional growth plans, and believes inward investment remains an issue a year on from the abolition regional development agencies (RDAs).
The value of investment from India is better known in the West Midlands than anywhere, with Tata Motors' takeover of Jaguar Land Rover five years ago leading to thousands more jobs in the region’s economy.
And Mr Bailey told the Birmingham Post there was also a direct benefit to bringing in more foreign students.
He said: “You are talking about £20,000 a year in spending coming into the country with each student, when you take in the multiplier effect.
“We are turning away the people who are the best of the best, and who may very well return to this country offering key economic partnerships.
“It is really a very dangerous strategy because a great deal of inward investment has resulted from contacts made at universities and students coming back to invest in the areas they studied in.
“This is one of the areas where Brand Britain is strong – we should be developing that.”
Figures released by the Higher Education Statistics Agency earlier this year revealed fewer than 30,000 students from India were studying at UK higher education institutions in 2011-12, compared with around 40,000 in the previous year.
India, however, remains the second most common country of origin for foreign students in Britain after China, which sent 79,000 students last year.
That came after changes to the post-study work visa from April last year removed the option for most foreign students to stay and work for two years after their studies.
Under new rules, students can stay for three years post-study only if they find “graduate-level jobs” on salaries of £20,000 or above.
The latest data also reveals a 13.4 per cent drop in the number of Pakistani students at British universities year-on-year, including a 19 per cent drop in postgraduates.
While the number of students from outside the European Union (EU) went up by 1.5 per cent as a result of a 16.9 percent rise in students coming from China, the overall number of non-EU students coming to Britain for postgraduate courses dropped for the first time in 16 years.
Meanwhile, Mr Bailey said he believed more work should be done to put universities at the heart of economic plans to boost regions.
The High Value Manufacturing Catapult initiative has seen seven centres of excellence, including two in the West Midlands, established to bridge the gap between academic research and business, but Mr Bailey said more funding needs to be devoted.
He believes there is still a void left behind by RDAs, which were replaced by business-led local enterprise partnerships which have nowhere near the same level of funding, region-wide bodies of some for would help.
He said: “I feel there is still an argument for a regional body, particularly in terms of strategic transport policy, where RDAs were very effective.
“I know RDAs got lambasted for competing against each other but I think that is a problem that could have been dealt with, without having to abolish them.”
He added: “Setting up RDAs with their own administration and so on would be an expensive way of doing things.
“We have got good universities spread across the country and I believe increasing involvement between universities and businesses. Where it can be demonstrated they there would be a profit from that involvement I believe there should be a funding structure for that.
“We need to have an entrepreneurial structure between universities and businesses.
“The Catapult centres are good, but too limited and under-funded.”
When asked what his three biggest concerns about the business environment were, Mr Bailey said access to capital remained top of the list, as schemes like the Green Investment Bank and Funding For Lending had not delivered enough.
The next concern was skills – as he feels a focus on apprenticeships over all has left gaps in key areas – and thirdly the lack of a macroeconomic strategy to provide a vision for the future.