Yorkshire business leaders urge Rachel Reeves to axe international student levy
Business leaders from across Yorkshire have written to the Chancellor ahead of the Budget, urging her to scrap a proposed international student levy which could take millions from the regional economy.
At the Labour Party Conference, Education Secretary Bridget Phillipson announced that maintenance grants would return to students on courses that were deemed to support the Government’s industrial strategy.
However, this would be funded by a 6 per cent levy on international students, with businesses and universities across Yorkshire warning that this would have a crippling effect on many of the North’s cities.
Research from Public First found that if universities raise fees to cover the full cost of the levy, the UK could lose more than 77,000 international students in the first five years.
This will have a particular impact on regional economies, with Leeds Central and Headingley and Sheffield Central the two constituencies worst affected in the entire country.
They would each lose more than £30m to the economy, as international students use local shops, hospitality and infrastructure, as well as the lower investment by universities and accommodation providers.
While in Yorkshire overall, international students contribute £1.5bn to the economy annually.
With more detail expected to be revealed in Wednesday’s Budget, business leaders from across the region have penned a joint letter to Rachel Reeves urging her to reconsider.
This includes the Northern Powerhouse Partnership, the Doncaster Chamber of Commerce, the Yorkshire Asian Business Association, the Company of Cutlers in Hallamshire and the Sheffield Chamber of Commerce and Industry.
The letter said: “While we share the Government’s goal of widening access to higher education, we are deeply alarmed by the unintended consequences this levy will have for the UK’s global competitiveness, economic growth, and the skills pipeline that underpins our future prosperity.”
It added: “The impacts will also be acutely local, with significant losses expected in every region where higher education underpins employment, exports, and local growth.”
Beckie Hart, regional director of CBI Yorkshire and the Humber said: "Higher education exports are vital to regional economies in Yorkshire.
“A tax that discourages international students from studying in the UK will have far-reaching consequences, threatening local jobs and the growth of regional businesses.
“We urge the Government to meet its net migration goals in a way that doesn’t strip opportunity and future prosperity from northern communities like ours.”
Prof Charlie Jeffery, vice-chancellor of the University of York and chair of Yorkshire Universities, said: “International students bring immense value to our region, socially, culturally and economically, bolstering local communities and fueling innovation.
“However, analysis predicts the levy will cost the Yorkshire economy millions, with constituencies like Leeds Central, Headingley and Sheffield Central among the hardest hit.
“That’s less money spent in local shops and businesses, fewer jobs for local people, and significant economic strain across the region.
“There is also a real risk to the aspirations of young people, as the levy may reduce places for UK students.
“We urge the Chancellor to use the upcoming Budget to safeguard our vital sector, which is the cornerstone of our nation's prosperity and global standing.”
A Department for Education spokesperson said: “We are using money raised through the international students levy to break down barriers to opportunity, introducing targeted maintenance grants for disadvantaged students.”