4The case for improving post-study work routes in Scotland
29.The central consideration of this report is whether there is a need to reform post-study work routes for non-EU international students attending HEIs in Scotland. The argument in favour of reforming current arrangements is that there is a need to retain skilled non-EU international graduates in Scotland, and the current visa framework is ineffective in enabling this. There is also a question about the extent to which post-study work offers contribute to international competitiveness of Scottish HEIs in attracting international students. The counter argument is that it is only desirable to retain the most skilled non-EU international graduates and that current arrangements make adequate provision for this. We consider these arguments, and the evidence behind them, in this chapter.
The needs of Scotland
Importance of retaining skilled international graduates
30.Skills shortages are a particular issue for Scotland, with more jobs there being hard to fill (as described by employers) because of skills shortages than in any other part of the UK.51 A report by the UK Commission for Employment and Skills found that, in 2014, 25% of all job vacancies in Scotland were hard to fill because of a shortage in available skills, up from 15% in 2011.52 The Scottish Government has raised concerns that this increase in skills shortages has occurred in the period following the closure of the Post-Study Work visa,53 and we have heard that being able to retain skilled non-EU international graduates would help ameliorate the skills shortages faced in Scotland.54 The Scottish Government and a number of other contributors to our inquiry have also argued that improved post-study work routes would be beneficial to Scotland’s economic growth,55 and the STUC argued that in addition to filling skills shortages, international graduates employed by Scottish enterprises can help to provide a link between Scottish workplaces and other countries where the employer may wish to expand their markets.56 Humza Yousaf MSP told us of one specific case where a company had taken on an Indian graduate because they wanted to break into the Indian market and thought it would be easier to do that with an Indian graduate on their staff.57
31.The different demographic challenges faced by Scotland, compared to other parts of the UK, mean that Scotland has a particular interest in retaining international students after their studies. Although Scotland is now experiencing positive population growth, this is at a lower rate than other parts of the UK, and particularly England.58 A number of submissions argued that making it easier to attract and retain skilled international workers was important to address demographic issues, by increasing the size of the workforce, as well as responding to specific skills shortages.59 The STUC argued that, on this basis: “there is […] justification for Scotland to take a different approach to its immigration policy and a system that supports young workers seems particularly appropriate”.60 We have recently launched an inquiry which will be looking at the demographic challenges Scotland faces, and the policy levers which are needed to respond to these challenges.61
32.Scotland has different demographic needs than other parts of the UK, due to slower population growth and a need to expand the size of the workforce, and also faces significant skills shortages in a variety of sectors. Retaining non-EU international graduates to work in Scotland is an important element of the response to these challenges. Our forthcoming inquiry into Scotland’s demography will explore in more detail the demographic challenges faced by Scotland, and consider which policy levers are needed to respond to them.
International competitiveness of Scottish universities
33.Attracting international students is important to Higher Education Institutions across the world, for the reasons we outlined in chapter 2, and the world class reputation of Scottish universities has resulted in their achieving great success in this area. However, we have heard from a number of sources that the availability of post-study work offers is a significant factor in where international students choose to study,62 and that the closure of the Post-Study Work visa has meant that Scottish universities have lost out to competitors in countries such as the US, Canada and Australia, where there are more generous post-study work offers.63
34.Enrolment figures at Scottish HEIs support the view that closing the Post-Study Work visa has adversely affected the growth of enrolments at Scottish HEIs by non-EU international students, since closure of the visa was announced in 2011.
Table 6: Non-EU student enrolments at Scottish HEIs, 2009–2015
|
2009–10 |
2010–11 |
2011–12 |
2012–13 |
2013–14 |
2014–15 |
|
25,075 |
27,880 |
28,500 |
28,305 |
28,610 |
29,210 |
Source: Higher Education Statistics Authority
The slower rate of growth, since 2011, of the number of non-EU students at Scottish HEIs compares unfavourably with other countries such as the US, Canada and Australia, where the number of international students increased by between 8 and 11 per cent between 2012–13 and 2013–14, compared to a 1 per cent increase in Scotland.64
35.The UK Government has stated that it “wants to increase the number of high quality, genuine international students coming to our world-class universities”,65 and the Minister for Immigration was keen to assure us that the numbers of international students coming to study in Scotland had not suffered as a result of the UK’s post-study work routes, pointing out that visa applicants from international students to study at Scottish universities are up by 11 per cent since 2010.66 However, this contrasts with the number of non-EU international students enrolled at Scottish universities, which increased substantially between the 2009–10 and 2010–11 academic years, but has increased by less than 5% since it was announced that the Post-Study Work visa would be closed.
36.There are particular concerns that the number of international students coming to Scotland from certain countries has fallen in recent years.67 The number of Indian international students attending Scottish HEIs has fallen by over 60% since 2010–11, and numbers from Nigeria have also fallen, albeit to a lesser extent. The fall in the number of enrolments from Indian students contrasts with the experience in Australia and the United States, both of which have seen a substantial increase in the number of students from India.68 The fall in enrolments from some countries has been offset by an increase in the number of students coming to Scotland from China, but this has not affected institutions equally. For example, Professor Sir Ian Diamond told us that the high proportion, of non-EU international students from Nigeria, attending the University of Aberdeen meant that they would be harder hit by a decrease in numbers of students coming from Nigeria.69
37.The world class reputation of Scottish Higher Education Institutions means they have had great success in attracting international students from across the world. However, there is clear evidence that post-study work offers play a significant role in decisions by international students of where to study, and Scottish HEIs are at a competitive disadvantage compared to countries outside of the UK with more generous post-study work offers. The Government should consider how the post-study work routes available in the UK relate to its desire to “increase the number of high quality, genuine international students coming to our world-class universities”.
Suitability of current post-study work routes
38.The UK Government recognises that “there should be opportunities for the brightest and best graduates from UK universities to remain in the UK to work”,70 and has consistently argued that the UK has an excellent post-study work offer, which allows non-EU international graduates to stay in the UK to work if they find graduate level employment.71 The Minister for Immigration and Secretary of State for Scotland were the only witnesses we heard from who believed this was the case. The Minister of State for Immigration told us: “we do want to attract the skilled and the talented, the brightest and the best and […] I think that offer is there in terms of that transfer post-graduation.”72 Making a similar point, the Prime Minister told the House on 13 January 2016: “We have an excellent scheme that covers, of course, Scotland” and “there is actually no limit on the number of people who can stay after they have graduated, as long as they have a graduate-level job.”73
39.In contrast to the rosy picture painted by the UK Government, the evidence we received from business groups, representatives of the education sector and immigration lawyers was that the current system was bureaucratic, costly and time-consuming for both individuals and employers, and did not provide an effective route for non-EU international students attending Scottish HEIs to secure graduate work.74 We were told that these issues are a particular problem for Small and Medium Enterprises (SMEs),75 which make up over 99% of all private sector enterprises in Scotland, and account for the majority of private sector employment.76
40.As the main post-study work route in the UK is the Tier 2 (General) visa, which accounts for over 80% of work visas granted to student visa holders, this is where we have focused our consideration of the suitability of current visa arrangements for non-EU international students wishing to stay in the UK to work after completing their studies at a Scottish HEI. The main issues which have been raised with us are:
- That the four months non-EU international students have at the end of their Tier 4 student visa is not enough time to find a Tier 2 job;77
- That being a Tier 2 sponsor is costly and burdensome for employers;78 and
- That the minimum salary thresholds are not reflective of graduate salaries in Scotland.79
We consider these issues below.
41.At present, Tier 4 student visa holders have four months after the end of their course during which to find a Tier 2 job with a licensed sponsor and apply for a Tier 2 visa. The vast majority of our witnesses argued that this was not long enough, and did not reflect the realities of finding graduate employment after university.80 The STUC contrasted this with the flexibility of the old Post-Study Work visa to take into account the nature of the labour market for graduates, where many need to work part-time or take on entry-level positions before finding permanent graduate employment.81 The UK Government has argued that the current four months is “sufficient time” and that it was reasonable to expect international students wishing to work in the UK to start looking for skilled work before the end of their course.82 The Minister for Immigration pointed out that larger firms tend to recruit several years in advance, meaning students could have a graduate job arranged before their course ends,83 but our evidence suggests that this timing does not work for many employers, and particularly SMEs, who may not recruit so far in advance.84 Jamie Kerr, an immigration solicitor, told us that, due to the cost and administrative burden of becoming a Tier 2 sponsor (see below), SMEs were unlikely to go through the process of becoming a Tier 2 sponsor until they could assess the suitability of candidates in post, and four months was not enough time to do this and then go through the process of becoming a sponsor.85 The Home Affairs Committee’s recent report into skills shortages also noted concerns that the current time period for people to move from a Tier 4 student visa to a Tier 2 work visa is too short.86
42.In order to be eligible for a Tier 2 visa, applicants must be sponsored by a licensed employer. The UK Government has said that the process of becoming a sponsor is “easy for businesses” and that employers can apply online and the application takes “just thirty minutes”.87 Our other witnesses were less convinced of the ease of being a Tier 2 sponsor.88 The EEF, the manufacturers’ association, conducted research which found that almost half of the companies which responded to their survey disagreed that the process of recruiting a non-EU graduate was easy, and over half (53%) found the process very time-consuming.89 In addition to the initial application process to become a sponsor, we have also been told that ensuring compliance with the wider Tier 2 framework can be a “major issue” for businesses.90
43.The minimum salary for a Tier 2 visa is currently £20,800 but this is calculated at a UK level and we have heard that it is not reflective of graduate salaries in Scotland, which are lower than those elsewhere in the UK, particularly in London and the South East of England. Several of our witnesses stated that using a single minimum salary for the whole of the UK was problematic for Scotland, particularly for SMEs.91 Research into the average salaries of 22–24 year olds found that in Scotland these were substantially lower than the minimum salary eligible for a Tier 2 visa.92 Similarly, the Migration Advisory Committee’s recent review of Tier 2 visas found that average wages in London were £12,300 higher than in Scotland.93 As a result, businesses in London and the South East are most likely to be able to take on international graduates as salaries in those areas are set at levels higher than the minimum threshold. This view is supported by statistics on the proportion of Tier 2 sponsors located in London and the South East (63% in 2013) compared to Scotland and Northern Ireland (6% in 2013).94
44.We have received evidence that the process for recruiting international graduates under a Tier 2 visa means that even those students who are able to find graduate level work in the four months after their course are unable to accept job offers because the employer is not a Tier 2 sponsor and the costs and burdens of becoming a sponsor are off-putting.95 This problem is illustrated by the small number of Tier 2 sponsors in Scotland, which severely limits the field of employers which can take international graduates on. Again, we have been told that the burdens of becoming and acting as a Tier 2 sponsor are a particular issue for SMEs and mean this an unsuitable route for them to fill vacancies.96 This contrasts with the previous Post-Study Work visa where there was no requirement for employers to be registered sponsors.
45.This Committee is not the first to receive evidence about the inadequacies of the current Tier 2 visa. The Home Affairs Committee recently published a Report on skills shortages and the immigration system and found that the cost of being a Tier 2 sponsor was prohibitive for SMEs and that they were also disproportionately affected by salary caps.97 That Committee recommended that the Government “look again at the value of international students to the UK, economically, intellectually and culturally” and “consider how it might devise policies that reduce the barriers for international students to stay in the UK and take up high skilled employment.”98
46.When we raised the above concerns with the Minister for Immigration, he maintained that current arrangements were appropriate and that the Government had no intention to change them.99 Responding to these comments, the Scottish Government’s Minister for Europe and International Development told us:
I am disappointed that the UK Minister for Immigration continued to reject the views of Scottish stakeholders when he gave evidence to the Committee on 9 December. I understand that he continued to insist that Tier 2 is a suitable route for international graduates to undertake post study work, when this is very clearly not the case.100
47.We welcome the Government’s recognition that “there should be opportunities for the brightest and best graduates from UK universities to remain in the UK to work”. The majority of evidence we have heard argued that the UK’s current post-study work routes fail to achieve this and are not meeting the needs of Scotland. This was contradicted, however, by the Minister for Immigration who told us that there was currently “a very good arrangement in place.” Evidence we received argued that the period of time international students have to find a Tier 2 job—four months—is too short, the minimum salary thresholds do not reflect the reality of graduate salaries in Scotland, and acting as a Tier 2 sponsor is costly and burdensome for employers. These issues are a particular barrier to SMEs, which make up the vast majority of employers in Scotland. SMEs are less able to offer salaries at the Tier 2 thresholds and lack the resources and expertise to navigate the complicated process of being a Tier 2 sponsor. It is disappointing that the complaints we have heard from business groups, the education sector and the Scottish Government were not recognised by the Minister for Immigration.
The case for Scotland
48.We agree with the overwhelming majority of contributors to our inquiry who argued that, given the particular skills and demographic needs of Scotland, and inadequacy of current arrangements, post-study work routes for non-EU international students attending Scottish HEIs need to be reformed. Improving the ability, within Scotland, to retain non-EU international graduates would increase the pool of skilled workers available to Scottish employers, and play an important role in filling skills shortages. Improved post-study work opportunities would also enhance the ability of Scottish universities, which operate in an extremely competitive international market, to attract international students. Although these arguments might also apply elsewhere in the UK, the skills and demographic needs of Scotland mean that there is a specific case for Scotland.
Views across the UK
49.In addition to our own inquiry into post-study work schemes, in recent years several other parliamentary committees and groups have called for post-study work routes to be improved. The House of Lords Science and Technology Committee recommended in 2014 that the Government reinstate the previous post-study work route, as it was simple, competitive and effectively enabled qualified STEM (Science, Technology, Engineering and Mathematics) students to access the UK jobs market.101 The All Party Parliamentary Group for Migration recommended in February 2015 that a new post-study work route be established to enable non-EU international graduates to secure skilled work.102 Most recently, the Home Affairs Committee recommended in December 2015 that the Government consider a number of options to give non-EU international graduates more time to find skilled work.103 The Government has not responded positively to any of these recommendations.104 The Scottish Parliament Devolution (Further Powers) Committee has also just held a one-off evidence session looking at post-study work routes for Scotland.105
50.Several parliamentary committees and groups have considered post-study work routes on a UK-wide basis, and recommended that they be improved. It is disappointing that the Government has not responded positively to any of these recommendations. We urge the Government to take a more constructive approach not only to this report but to the work into this issue that has already been done, and is currently being undertaken, by parliamentarians across the UK.
51 Aberdeen and Grampian Chamber of Commerce (PSW0017), STUC (PSW0003), Institute of Directors (PSW0004)
52 UK Commission for Employment and Skills, UK Commission’s Employer Skills Survey 2013: UK Results, January 2014
54 Q43 [Helen Martin], Q126 [Jamie Kerr], STUC (PSW0003), SCDI (PSW0005), Scottish Government (PSW0011), Aberdeen and Grampian Chamber of Commerce (PSW0017)
57 Q82
58 ONS, Overview of the UK Population, June 2015
61 The terms of reference for this inquiry are available online: Demography of Scotland and the implications for devolution
62 Q103, Scottish Government (PSW0011), Edinburgh University (PSW0016) para 4, Hobsons EMEA, International Student Survey 2015, September 2015
63 Q18 [Professor Sir Ian Diamond], Qq102, 106 [Professor Robert Wright], University of Glasgow (PSW0023)
69 Q18
71 Q190
72 Q148
73 HC Deb, 13 January 2016, col 852 [Commons Chamber]
74 Qq 14-15, 20 [Alan Mackay], Q16 [Professor Sir Ian Diamond], Q36 [Howard McKenzie], Q41 [Helen Martin], Qq68, 70, 87 [Humza Yousaf MSP], Q102 [Stuart McWilliams], Q110 [Jamie Kerr], Institute of Directors (PSW0004), Million+ (PSW0006) para 18, University of Edinburgh (PSW0016) para 14
75 Qq15, 20 [Alan Mackay], Q36 [Howard McKenzie], Q102 [Stuart McWilliams], SCDI (PSW0005), Million+ (PSW0006) para 18, Stuart McWilliams (PSW0022)
76 Scottish Government, Businesses in Scotland 2015, November 2015
78 Q14 [Alan Mackay], Q77 [Humza Yousaf MSP], Million+ (PSW0006) para 18, University of Edinburgh (PSW0016) para 24
79 Q77, Scottish Government (PSW0011), Million+ (PSW0006) para 13, University of Edinburgh (PSW0016) para 23
80 Q70
83 Q166
85 Q122 [Jamie Kerr]
86 Home Affairs Committee, Fifth Report of Session 2015–16, Immigration: skills shortages, HC 429, para 65
87 UK Government, Government Response to the House of Lords Science and Technology Select Committee Report: International Science, Technology, Engineering and Mathematics (STEM) students, July 2014
88 Q14 [Alan Mackay], Q77 [Humza Yousaf MSP], Million+ (PSW0006) para 18, University of Edinburgh (PSW0016) para 24
89 APPG on Migration, Joint response from EEF and Squires Patton Boggs, Post Study Work Route inquiry
93 Migration Advisory Committee, Balancing migrant selectivity, investment in skills and impacts on UK productivity and competitiveness, January 2016, table 4.8
96 Qq102, 122 [Stuart McWilliams]
97 Home Affairs Committee, Fifth Report of Session 2015–16, Immigration: skills shortages, HC 429, para 55
98 Home Affairs Committee, Fifth Report of Session 2015–16, Immigration: skills shortages, HC 429, para 32
99 Q174
101 House of Lords Science and Technology Select Committee, Fourth Report of Session 2013–14, International Science, Technology, Engineering and Mathematics (STEM) students, HL Paper 162, para 110
102 All-Party Parliamentary Group on Migration, UK post study work opportunities for international students, February 2015
103 Home Affairs Committee, Fifth Report of Session 2015–16, Immigration: skills shortages, HC 429, para 65
104 House of Lords Science and Technology Select Committee, Government Response to the House of Lords Science and Technology Select Committee Report: International Science, Technology, Engineering and Mathematics (STEM) students, July 2014
105 Scottish Parliament, Devolution (Further Powers) Committee, Official Report of 28 January 2016
© Parliamentary copyright 2015
Prepared 10 February 2016