21
Scottish Affairs Committee
Oral evidence: Post-study work schemes, HC 593
Monday 30 November 2015
Ordered by the House of Commons to be published on 30 November 2015.
Written evidence from witnesses:
- Scottish Council for Development and Industry
Members present: Pete Wishart (Chair); Kirsty Blackman, Mr Christopher Chope, Margaret Ferrier, Chris Law.
Questions 1-99
Witnesses: Professor Sir Ian Diamond, Principal and Vice-Chancellor, University of Aberdeen, and Chair, International Committee, Universities Scotland, Alan Mackay, Deputy Vice-Principal International and Director of the International Office, University of Edinburgh, and Member of the UK Council for International Student Affairs, and Anne Cant, International Manager, Dundee and Angus College, and Member of Colleges Scotland, gave evidence.
Q1 Chair: Welcome to the Scottish Affairs Committee here in the wonderful surroundings of the Linklater Rooms in the historic King’s College, Aberdeen University. We will be discussing fearless graduates, including our very own Kirsty Blackman.
Kirsty Blackman: Again, I am not a graduate.
Chair: You are not a graduate?
Kirsty Blackman: I am not a graduate of Aberdeen. I am very sorry. It is nothing to do with the quality of the education. It was my own fault entirely.
Chair: We are very grateful to Aberdeen University for allowing us to have our first meeting of the post-study work schemes inquiry, which the Scottish Affairs Committee has embarked upon, in these magnificent surroundings. Thank you very much, Principal and Vice-Principal, for your generosity in allowing us here today. We will start proceedings and, as is usual for our proceedings, if you would say who you are, who you represent, and if there is any—and I am stressing the words—particularly short opening statement that you want to make. We will start with you Mr Mackay.
Alan Mackay: Alan Mackay, Director of the International Office. I am Deputy Vice-Principal International at the University of Edinburgh but here in my capacity as a board member of the UK Council for International Student Affairs, otherwise referred to as UKCISA.
Professor Sir Ian Diamond: Ian Diamond. I am Principal and Vice-Chancellor of the University of Aberdeen. I would just like to say, Chair, first, we welcome you formally to the campus. We are very privileged to have you here but, secondly, also to say how pleased we all are that you are having this particular investigation. Scottish higher education is extremely good—and I say that with true Scottish understatement—and yet we are facing challenges all the time, not least by our competitiveness internationally, not on the basis of the quality of our education but on the quality of the policies that enable us to work with both hands tied behind our backs.
Anne Cant: Good morning. I am Anne Cant. I am the International Manager at Dundee and Angus College, and I am delighted to be here to represent some of the feedback that we have received from our research through colleges.
Q2 Chair: We are most grateful to all of you for those very short introductions and especially for the explanation as to who you are. This is the first inquiry where the Scottish Affairs Committee has picked up on some of the issues that were brought to us in our first report, when we invited several organisations from Civic Scotland and representative bodies to give us evidence about the type of issues they would like to see us pursue. This came out pretty much near the top of all the submissions we had, so this is why we felt it was important that we had a look at this to see if there was anything that we could qualitatively add to the debate and discussion about the post-study work scheme. We are interested to try to get a sense about what is required to make competitiveness in Scottish universities and higher education better, and about whether there is anything that we could recommend so that we continue to make ensure that Scottish higher education remains at the forefront internationally.
I am going to start with a general question to all three of you just about, in your view, what is the value of international students. Can you tell us a little bit about how important this group of students is to your own particular institutions and the interests that you represent? We will start with you, Professor Diamond.
Professor Sir Ian Diamond: Thank you very much. The first thing I would say is that the University of Aberdeen has students from over 120 different nationalities. The point that I would make is that that is extremely good, not only for the life chances it gives the students from those countries but it is also extremely good for our students from Aberdeen, from Aberdeenshire and the rest of Scotland, because they get to study in a global environment, the one in which they will spend the rest of their lives, so having an international campus seems to me to be extremely important.
Secondly, there is no doubt that, for the long term benefit of Scotland, it is good that international students study in Scotland. One of the reasons for that is of course many of them will go back to their countries and become leaders of industry, leaders of their nation, and they will have a fond memory for Scotland, and particularly—if I just look now in Aberdeen—many of our students in oil and gas, coming from all over the world, will go back and become leaders of their industry. The long-term future of the north-east of Scotland is dependent, not on the oil that is in the North Sea but on becoming a global service centre for the oil and gas industry. It will be a lot easier to do that if we have many students over the next 30 to 40 years who remember the north-east of Scotland, rather than, for example, remember their time in Houston or in Calgary, so in every way that soft power is important.
Thirdly, let’s be honest, the economic benefit that international students bring to universities, and not just to universities but to the wider Scottish environment, is also incredibly important, through their fees and through the way in which they spend money in the local area. It is an important part of the economic benefit of those students.
Q3 Chair: Thank you, for that. Mr Mackay, maybe you could talk a little bit about the contribution economically that international students bring. Is there a sense that Scottish universities are perhaps a little bit more dependent upon this income than your colleagues in English universities?
Alan Mackay: I think that is right. If you look at it—and this is a huge compliment to the Scottish higher education and further education sector—there is a higher percentage of international students in Scotland than in any other part of the United Kingdom. It is about 21% of students in Scotland. I think the comparable figure for the rest of the United Kingdom is 18% or 19%. Scotland is ahead. As has been stated, there is obviously a huge economic benefit to Scotland, for economies up and down Scotland as well, in the different cities, Aberdeen, Glasgow, Dundee, Edinburgh, and so on. Within my university, the University of Edinburgh, last year we had 14,600 international students, 10,250 of whom were from outside the European Union. That is 42% of our entire student population, but interestingly, when you look at that international headcount, that is more than any of the world’s top 20 institutions, which are mainly based in North America. As a Scottish university in Scotland’s capital city, that is Scotland outpacing Harvard, Yale, MIT—I can go through the list, you can have a look at that list. That is very impressive. It is very important and the economic importance has been referenced.
The spin-out, in terms of jobs creation, is everything from people collecting people at airports to spend in local shops. The increase in traffic at Edinburgh Airport is one of the key ones for Scotland. That has largely been down to students, families, significant others coming to visit, and that is a tourism impact for Scotland as well. There is huge benefit not just to universities in terms of fee income, as part of their financial portfolio, but also the wider impact on jobs and job creation and the local economy benefits from having students from outside the United Kingdom.
Q4 Chair: Ms Cant, could I ask you—and obviously you are more than welcome to answer that question—are there any differences between international students’ qualities compared to those in the universities?
Anne Cant: No, I don’t think so. At the college level we very much offer more of a paternalistic approach so that we can upskill the international students because then we have a pathway into our universities. We work in a holistic manner so that we get the best for our cities, our colleges and the universities. As much as I very much endorse the post-study visa, I would appreciate it if the Government could look at it in a wider context because of the recent modifications to the Tier 4 visa. That starts the pipeline by which we can upskill our international students so that they can then either work, stay or go home, as Professor Diamond has said. The other thing is that they then go on to the universities, so unless we can do something to revisit that UK visa restriction, we will not have the international students coming into the colleges who we can then feed into our universities.
Q5 Chair: Thank you for that. There are a number of people who say that making these places available for international students limits the opportunities for those in the rest of the United Kingdom. Do any of you have particular opinions on that view, which has been put to us when we were looking at the situation?
Professor Sir Ian Diamond: No, it does not, particularly in Scotland where, let us remember, there is still a cap on the number of Scottish students that we can take at undergraduate level. We are able to take a view on the size of our universities. The great majority of our international students at the University of Aberdeen have come to do postgraduate courses. Here there is no cap. We take a view on the number that we can take, either from Scotland or from anywhere else, so long as we are able to deliver the quality of education you would expect from the University of Aberdeen. We are not in any way restricting access to Scottish students by recruiting international students.
Q6 Chair: Given we are a Westminster Committee, what about from the rest of the United Kingdom?
Professor Sir Ian Diamond: Or from the rest of the United Kingdom. I think it is worth saying that we recruit as much as we can from the rest of the United Kingdom, and that is a very competitive market now with the cap having been taken off in England, but we are not restricting access at all to students from the rest of the United Kingdom by recruiting international students.
Q7 Chair: Lastly on the general opening questions—and I think this has already been touched on—how successful have Scottish universities and higher education institutions been in securing international students and how does this compare to the rest of the United Kingdom? I don’t know if you want to take that up, Ms Cant?
Anne Cant: Okay. From a college perspective, Dundee and Angus College have about 30 international students. That is something that is done naturally. We don’t go and promote, primarily because we want to make sure the provision for our local students is there. We also want to make sure that we attract international students in areas where we believe we can excel, so that we can link it to industry and make sure that there is the high probability that they will be successful and get jobs. We feel that international students are absolutely key to us and we want to do more of it, and we would do more. However, most colleges are frightened and concerned that if they take international students, issue them with their cards and then their visa is denied, that affects our Tier 4 status. We have to be very cognisant of that.
Q8 Chair: We have information here—just before I bring you in Mr Mackay—that we have 9% of all international students with Scotland accounting for 8.4% of the population of the United Kingdom. Is that roughly the figures that you recognise when it comes to—
Alan Mackay: Yes, absolutely. Let’s look at Scotland in terms of its size. We know that and we have seen the figures for the universities of Scotland. If you look at per capita the citation of academic papers in this country, we are up there with Switzerland as the world’s leaders. It is quite incredible. We have a great story to tell. We have done fantastically well in bringing students from outside the European Union, particularly, but also inside the European Union as well.
There is a fantastic story there but, if you look at it across the last five years, a major contributing factor to the way numbers have started to reduce—and I know that is what we will turn to—is the removal of the post-study work visa. In 2010-11, there is a certain trajectory. I think after 2011 forwards it has become a much more challenging picture. Effectively, what you are seeing is almost flat-lining during a global boom, and that is something that I know that—
Q9 Chair: We are going to come on to these issues and we have certain questions on that. Just before I bring you in, Professor Diamond—and I know you are very keen to answer that and I will give you the opportunity—maybe as you do you could describe in your experience what it is about Scotland that we remain attractive to international students and how do we do better than possibly the rest of the United Kingdom?
Professor Sir Ian Diamond: Very simply, it is because of the quality of the higher education that we give. Scottish higher education is world class. I know that in Scotland we don’t like to use hype. That is not hype. It is just a simple fact of life. We have great higher education and the University of Aberdeen puts an enormous amount of work into making sure that its offering to international students is relevant to the sorts of things that they want to do. I know that Edinburgh does the same and I can say exactly the same about any of the other 17 institutions. For example, we recognise that our geography says that a lot of people will want to come to Aberdeen to do things in oil and gas engineering, so therefore we have one of the very best oil and gas engineering programmes in the world. We are recognised for that and that is why people then want to come.
I would also say that at an undergraduate level the four-year Scottish degree is also a significant help over other parts of the UK because it matches so very well that in many other parts of the world, not least North America. I think the bottom line is we have a great offering, we have put a lot of work into it and our degree structure helps.
Chair: Thank you for that. We have a couple of questions from Kirsty Blackman, but we have a supplementary from one of our English members of the Committee who also has a Scottish higher education from St Andrews I believe.
Q10 Mr Chope: Yes. I am proud to be a St Andrews graduate, so I am very keen that the quality of Scottish higher education should be emphasised in this inquiry. I cannot understand why there is a cap on the numbers of students from Scotland who can become undergraduates at Scottish universities and take advantage of that quality of education, because there is no cap on undergraduates at English universities from England.
Professor Sir Ian Diamond: Christopher, the last time we met was when you were an MP in Southampton and I was at Southampton University. I would not expect you to remember that, but in those days there was a cap in England as well, and that cap was largely because the fees in those days were being paid by the state. With the move to fees being paid largely by the individual in England there is now no cap and no need in that way for there to be a cap. In Scotland, Scottish Government policy dictates that there will still be a cap because of their policy that fees will be free for Scottish students.
Q11 Mr Chope: If there wasn’t that cap, how many more students from Scotland do you think you would be able to have coming to your university?
Professor Sir Ian Diamond: I could not answer that question because clearly demand outstrips supply at the University of Aberdeen, but those colleagues who go elsewhere may not wish to, so I would not be able to answer that question.
Q12 Mr Chope: Would you accept, therefore, that in a sense the problem that we are discussing about income for the universities, and the importance of income from international students for the financial viability of universities in Scotland, is caused at heart by the failure by the Scottish Government to be prepared to pay for sufficient numbers of home-grown students to take advantage of these fantastic educational opportunities?
Professor Sir Ian Diamond: Christopher, I wouldn’t because, as I said right at the beginning, my interest in recruiting international students is not to shore up—I think your words—the finance. My interest in taking international students is because it is good for my Scottish students to be educated in an environment with international students around. It is good for Scotland, and indeed for the wider UK, for international students to be here and then to go back to their country and become leaders and remember fondly their time in Scotland, and it is good overall for the economy. I think the point that Alan makes is an incredibly important one and that is that international students who come to Scotland and come, say, to the University of Edinburgh don’t just sit in Edinburgh; they travel elsewhere in the UK; their parents, their friends come over; they travel elsewhere. This is a major economic impact right across the UK in the time that they are here. I simply do not accept that we need those students to shore up our finances.
Q13 Mr Chope: Finally on this, what you are saying is the issue of finance is totally irrelevant to this issue of whether or not we attract more international students into Scottish higher education?
Professor Sir Ian Diamond: No, you mistake me completely, Christopher, if I may say. I am not saying it is irrelevant because clearly, when one thinks about introducing a course that will be attractive to people internationally as well as for people locally, one looks at the numbers. The point that I made is that one is not taking international students to shore up the university. One is taking international students because it is a good thing to do and the economics is just something one makes sure happens.
Anne Cant: Could I add a little bit to that? From a college perspective and looking at the value that the international students bring, I do not think you could put a monetary value on it, especially when they are integrated into the classes and they are sharing their customs and practices and experiences with students who perhaps would never have the opportunity to travel to those countries. There is a lot of bringing the diversity into the classrooms to be able to make sure that the learning is letting the students not think locally, not think regionally but think globally and giving them the opportunity to think that they too have opportunities in international life.
Chair: Thank you for that. I am keen to move on.
Q14 Kirsty Blackman: Specifically for Alan Mackay to begin with. The University of Edinburgh said that Scotland would be an even more attractive place for their students if they could stay on to make the most of their qualification by gaining experience of working within a Scottish context. The UK Government suggests that the Tier 2 visa does this. Does it and do you encourage students to stay on under a Tier 2 visa?
Alan Mackay: Does it work? My response to that would be no. When you look at the figures I think the existing routes there have declined. If you go back to 2011, 46,000 students were following post-study work opportunities in the UK. Fast forward to 2013, that has reduced to 4,175, so there is a decline of between 88% and 90%. It fits with what has already been said about the package. This is a global race for talent, make no mistake about it. Linking back to the previous question, people have choice like they have never had in human history. They can compare and contrast information and they can go to other locations. There is free-flowing talent across borders in a borderless world around higher education and research. We want the brightest minds wherever they are from, whether they are from the east end of Glasgow or the east end of Sao Paulo; if these are good people doing good things we want them here. That brings immeasurable benefit to the institution, to the economy and to the students in the classrooms and labs having that international experience as well.
If you look specifically at the opportunities that are available for students and the figures within the Tier 1 graduate entrepreneur route, the Home Office issued 131 visas in 2014. I think that speaks volumes. For Tier 4, the doctoral extension scheme that universities have to join if they want to support their students on that—and we are a participant in that—there were 434 visas across the whole of the United Kingdom in 2013. Tier 5, the Government approved exchange or temporary worker scheme, which also might be of use to the higher education sector, there were 210 for the whole of the United Kingdom. I think those figures themselves say it all in terms of are students interested in it. The other part of this is that across the whole of Scotland and Northern Ireland only 672 employers currently have a Tier 2 sponsor licence to be able to sponsor students coming through what is a lottery effectively. I go for an interview and then find out that a small to medium-sized enterprise, which is the backbone of Scottish industry, does not have a sponsor licence and cannot take me on anyway.
Q15 Chair: Can I ask is there any reason why there are so few sponsors in Tier 2?
Alan Mackay: You will hear that across the day in the employers’ feedback that particularly small to medium-sized enterprises, which form the backbone of the Scottish economy, find it far too costly, far too bureaucratic and, frankly, are worried about what it will mean for them in terms of a compliance regime to get involved with it, so they prefer not to do it. The total figure in the UK is only just over 10,000 for all organisations that hold a licence that enables them to sponsor students under the schemes I have just outlined. I think the figures speak volumes in terms of that reduction and it is not just the students making that choice. It is also employers that are making that choice, and the vast majority of them that are saying that they do not want to get involved in this are small to medium-sized enterprises.
Q16 Kirsty Blackman: Still on the shortcomings of Tier 2, can I ask a similar question to Professor Diamond and to Ann Cant?
Professor Sir Ian Diamond: I could not agree more with what Alan has said. It is complex but the real thing is that it does not work for students because the threshold is relatively high, the time that you have to get a job is relatively low and people are aware of these issues when they are taking the decisions to come. It is not, “I have come and now I am thinking about what to do”. People are aware before they come of the situation. I don’t know but they may well put a little spreadsheet together and there is Scotland and what Tier 2 says. Compare that with Australia, Canada, the United States, New Zealand, Ireland and one would immediately be starting to lose some of the advantages that one has in terms of choice, as Alan said, for the individual student.
Anne Cant: I don’t have very much more to add to that.
Q17 Kirsty Blackman: Thank you very much. We have touched on some of this already—and particularly Mr Mackay did in terms of the closure of the post-study work visa scheme and the effect that that had—but specifically the University of Scotland gave evidence to the All-Party Parliamentary Group on Migration about the fact that the removal of the post-study work visa has affected Scottish institutions more significantly than the rest of the UK. Can I ask how that conclusion was come to and what evidence there is for that? Why do you think that is?
Alan Mackay: Specifically on that, I think this has had an unusual impact, an uneven impact in different parts of the United Kingdom. It has particularly affected STEM subject areas, so science, technology, engineering and maths, which is particularly important to the Scottish sector. India is a good case in point. We know from the Indian High Commission in London, who submitted evidence on this to the all-party parliamentary group, and also from surveys that have been done with Indian students that the post-study work half of the year is extremely important to them. When you look at that impact across the UK, it is very important in terms of what is happening out there. As this booms, and Asia and in particular India is a key driver of global growth of high talent across the world, the UK saw 48% to 49% reduction in the number of Indian students entering the country to study at university level. In Scotland that was 63%, so a much higher impact. When you start to drill down to the specifics you see this impact in a much harder way. I reference that 63% of Tier 2 companies exist in London and the south-east of the United Kingdom. Under 10% are in Scotland and the whole of Northern Ireland, so you begin to see how this impacts across different parts of the UK. India is a good example, and from the reported figures in the past couple of weeks, Australia or the United States are seeing 30% to 33% increases of high talent migration from India.
Q18 Chair: When we come to India and southern Asian nations, India and Pakistan, the Government always respond—and this has been raised with them several times about the drop off that was seen in Indian, Pakistani and also Nigerian students, which again you submit in your evidence—that we are more than making up for this from China. Does the Government not have a point when they say, in terms of the comparators, when some markets decline others pick up and what is wrong with getting more Chinese students?
Professor Sir Ian Diamond: At a global UK level I think it is the case that we have more or less flat-lined, with an increase in Chinese students making up for the major decreases in the sorts of students that Alan has just described. At a lower level, those universities that have greater diversity, a university like the University of Aberdeen, which for obvious reasons has a very strong Nigerian component, are going to be hit much more, so one then needs to come down to the local level. But as Alan has also noted, we are in a global boom. The last few years could have been a time when we increased the numbers of our students and were able to enhance the offer for our local students because of that. We have lost that opportunity because we have been losing students in areas of the world where, in the long term, we would really like to have the kind of soft power that I referred to in my initial remarks.
Q19 Kirsty Blackman: On the local issues within Scotland, the STEM subjects have been mentioned and Professor Diamond mentioned specifically the oil and gas centre that we have in Aberdeen. Are the problems that we are facing of reducing numbers of international students a consistent problem across the whole of Scotland or are there specific localities where it is more of an issue? For any of you.
Professor Sir Ian Diamond: I think it is across Scotland. Some universities have had some notable successes—I would point to the University of Glasgow—and, as Alan has pointed out, 42% of the University of Edinburgh’s students are international students. But the point is not so much that some places have successes and other places are working very hard to increase, the point is how much we are missing out and what are the challenges that we have been facing. They are quite significant.
Alan Mackay: I will pick up on that very quickly. As I said, this is a global boom. It is happening anyway. I came up here today on the train. It is a bit like being on a train that does not stop anywhere. You see competitor countries, the Anglophone countries; it is a global race for talent. If you consider Scotland’s specific demographic challenges as well in that, and in terms of the best working with the best in a research ecosystem, you want to work with the best talent wherever they are in the world. What you are seeing is our competitors, Australia, Canada, the United States of America, stopping at every station and picking up people, the very people that could have come here. So we are on a train that does not stop and it just goes. There is a real issue round that and post-study work, or lack thereof, is a major contributing factor to not stopping at the stations along the way.
Q20 Margaret Ferrier: First of all to Alan, if you don’t mind. Looking at the evidence, the UK Government has stated that the new post-study work visa or the route going down the Tier 2 general visa is fit for purpose. Based on some of the things you have already said, there seem to be issues regarding the short period between moving from one tier to another. You have mentioned sponsorship is very difficult for SME employers and also the salary. I am quite interested in whether you feel that is achievable. If you could maybe answer: do you feel this is fit for purpose at the moment?
Alan Mackay: As I have said already, I think the figures speak for themselves. Clearly there is very little interest because it is very obstructive or not flexible enough, both for the students and the employers. You have a salary threshold set at £20,500, which for many SMEs is above what they might pay any graduate starting within their organisation, so there is the graduate job aspect of that. There is a short timeframe that the students have at the end of their course. They are dealing with 16 weeks to locate an A graduate job at a salary that is at or in excess of £20,500. Then you have the often overlooked part of this, which is that a lot of employers—that is specific to Scotland—in the small to medium-sized enterprises simply do not want to get involved in all the complexities within the system of being a sponsor. I go back to, “We think you are the best candidate. We have gone through the process. You have applied. That is great. There is just one thing: we don’t actually have a licence to sponsor anybody from outside the EU so we are going to have to say no.” There are a very small number of employers that have taken this up. On a variety of fronts, including having little mini schemes, because that is what they are, when you look at the uptake from students the figures speak for themselves.
Q21 Chair: Professor Diamond, could universities do more to try to encourage a take-up in Tier 2? Is there more collaborative work that you could do? Is there anything you could do by offering incentives, for example, or joint working arrangements so there is more of an encouragement to do this through Tier 2?
Professor Sir Ian Diamond: Could I address that question in the context of answering and enhance something Alan just said? Our students are working incredibly hard. Our students at the University of Aberdeen have pushed us over the last 18 months to open the library 24 hours a day. They are doing that because their courses are inspirational and challenging. They cannot at the same time—particularly in the run-up to the last part of it, and the same in Edinburgh or Dundee or anywhere else—also be thinking about getting a job at the right level. Therefore, with the 16 weeks, when they have just finished working really hard, they take a deep breath and suddenly they are under immense pressure again.
I take your point, Chair, that there are opportunities at the micro level to find partnerships that could be helpful. I think that is a fair point, but it is not the broader base that we need as a nation across a wide set of sectors and a wide variety of opportunities. People need to be able to finish their course and to do so absolutely properly, then to be able to reflect and find some employment, while at the same time looking for the graduate opportunity that will come. That would be the sensible thing if we were trying to do something that was for the benefit of both Scotland and the United Kingdom.
Alan Mackay: Can I add to that as well? Look at it within the context of Scotland, with things like the creative industries and the performing arts, which are really important, starting salaries of £20,500 are almost impossible, so setting artificial salary thresholds within these routes makes it nigh on impossible, even if you were able to locate a job. You are then left with—and there is other legislation covering this—a perverse set of circumstances with an employer saying, “I think you are fantastic. We do have the ability to sponsor someone but I have to start you on a salary of £20,500 or in excess of that”, which means I will then have other employees quite legitimately saying, “Why are they paid £20,500 or more and I am not?” “It is because you are from the European Union or you are from Scotland and you are from outside.” It leads to this perverse set of circumstances. Also it is a fact that there are certain areas of work that are very important to Scotland more broadly where you will not find that the average starting salary for a graduate is £20,500. That has a detrimental impact, particularly in terms of the creative industries, for example.
Professor Sir Ian Diamond: It is also the case—to take the creative industries a step further—that for many people a paid internship is the way subsequently into employment. Paid internships do not exist at those kinds of salaries, so immediately you are taking people out of a potential market, people who could in the long term be immense contributors to our economy.
Q22 Margaret Ferrier: Maybe Anne could answer how it works in with colleges as well. Should we be supporting them at the colleges to find post-study work opportunities? Also, I am sure I saw that the £20,500 was going to be increasing again, which is going to be making it even more difficult for these companies. With an economic downturn a lot of companies tend to reduce salaries rather than increase them, so it is going to be more difficult for these people to find work and, as you say, do it all in a four-month period.
Anne Cant: The college sector was quite successful with the post-study students up to 2012 when it was stopped. But my concern here is that, when you are looking at the post-study work visa, if the colleges can attract international students and they are only allowed to commence their studies up to an HNC level, and if they have to go home to reapply for their second year visa and they need all of the maintenance and support in their bank accounts when they are home before they can apply to come into an HND or go to university, what that means is it is reducing the opportunity for us to offer post-study visas, because then you are saying, are the students at the college stopping their studies at an HNC level? Therefore, if we are going to be looking for employers to take post-study visas we would have to look at reframing what it means at that level.
Q23 Chris Law: I have specific questions regarding options for the post-study work visa, but I might start by asking a broad question. I have been listening to the evidence this morning and the clear message that is coming across is the current approach is counterproductive and discriminatory, to some degree, with regards to international students coming to Scotland. It is having a negative impact. Can you tell me, just broadly, what you think the UK Government are trying to achieve and what your thoughts are about that?
Professor Sir Ian Diamond: You have asked me to think and so I stress that what I am going to give you is my speculation and that is that the UK Government are very clear that they wish to reduce and to keep migration very low. When they observed the components of migration, student migration was relatively high. One of the reasons for that, I would have to say, is a statistical artefact according to the definition of what is a migrant in the UK. Therefore, a decision has been made by the UK Government that, in order to keep migration low, student numbers had to be reduced. That is my speculation around the background but, having said that, I would argue that it is a policy that is completely misplaced. The reason for it is that statistical artefact of students being registered as migrants, particularly as the great majority go home and all the reasons that we have given before.
Therefore, I think that we need to move very quickly to acknowledge the benefits that international students bring to the UK and we need to move this policy very quickly. I would also say that I think when the policies were brought in, in the early part of the last Government, there was a perception that there were some language schools, for example, some institutions, that were perhaps a little bogus and being used to circumvent the migration system. My perception is that through the policies, some of which I do support, we have managed to overcome that and, we now have world-class institutions trying to recruit the very best talent from across the world for the benefit of the UK and being prevented from doing so.
Q24 Chair: Are the UK Government not right? We had net migration figures last week. I think it was 336,000 more people coming in than going out, and this Government is committed to bringing immigration numbers down to tens of thousands. We could debate whether they are successful or not. Isn’t it right that students be included in that or are you trying to say that a special case should be made for international students when it comes to calculating figures coming in and, surely, there must be a part to be played by higher education institutions?
Professor Sir Ian Diamond: I think it would be entirely correct for students not to count in the net migration figures, and that case has been made by many people and has been supported by a number of Select Committees across the House of Commons. One of the reasons is that it is a statistical artefact in the way in which one counts migration, and so you are counting people as migrants and probably the announcement of the net migration figures is made after a number of these people have successfully completed their courses and gone home. It is a complete artefact.
Q25 Kirsty Blackman: It seems bizarre to me that if you are going to cut down immigration, the people to start with are the students. It doesn’t seem to be a very sensible option when we want the brightest and the best. Do you think the UK Government’s ideology around immigration is going to harm the long-term future of Scotland economically?
Professor Sir Ian Diamond: There are many economists who would say that migration impacts positively on the economy. I have seen an article that argued—and I stress that I am not saying I support it because I have not been able to check all the analysis—that one of the reasons that the Chancellor was able to make some positive statements last week was the tax take that had come because of migrants. I stress that could well have been speculative, so I would just put that with all the health warnings that I possibly could. But I have to say that this policy cannot be good for the UK and I support all the Select Committees who have said that students should be taken out of the migration figures.
But could I add one thing? I think that that is an aside when it comes to the recruitment of international students. I do not believe that were the Government to say that tomorrow we are going to take students out of the migration figures that suddenly people across India or Pakistan or some of the places where we have seen major declines in numbers would say, “Oh, I am not a migrant anymore. I will go to Scotland instead of to Australia or to Canada or to New Zealand where the post-study work opportunities are much bigger”. So, yes, take them out of the migration figures but do much more.
Q26 Chris Law: I would like to move on to the options for post-study work schemes. I was looking at the possibility and the number of options for introducing a post-study work group for international students. Could the panel could tell me what your preferred options are and why?
Alan Mackay: It is good to be looking at options as well in terms of, if we start a reintroduction of post-study work, what may it look like? Obviously the previous option we had is one, namely the reintroduction across all areas of a two-year post-study work visa. Option 2 would be to split that, so the first year of the two years is spent looking for work and trying to get to that point where you do have a Tier 2 graduate job to move into in the second year. There is that as well. A third option is to look at more specificity within geographical locations, and that might involve lots of different things. That could involve that there is a particular sector. We have heard about oil and gas, obviously, in Aberdeen or the tech sector that is close to my university, which is thriving—for example, two unicorn companies valued at over $1 billion spun out of the university—and the international talent aspect of that, creating jobs for the local economy that we are in, and maybe the universities playing more of a role to support SMEs with how this is taken forward. Even with some of the things that we have just talked about to make it much more flexible and open, if there are changes in the system that don’t positively impact on small to medium-sized enterprises, it is still going to be extremely difficult. This has to be looked at holistically, as Anne said, to see how it all fits together. In my institution—and I am sure at Aberdeen as well—with the doctoral extension scheme, we are already helping students through that process. We do not have to be part of the doctoral extension scheme but we are because it is good for our students and we support them through that, so maybe universities working along with perhaps city administrations across Scotland could be looking at specific sector needs or employment needs within different geographical areas.
But I think with all the work that has been done on this, the conclusion is we want to keep it as part of an open and welcoming package. This is something we have not discussed but the perception is key with all of this. The perception is whatever people are saying when they visit different countries: that you are all welcome and there is no cap. The perception is: not as welcome as the package I see from Australia, from Ireland, from the United States, from Canada. I could go on. The fact is that these countries, economies, locations, institutions are all benefiting. They are benefiting and growing and we are flat-lining. We are flat-lining during an absolute boom. There are lots of different options. It would be good to look into those in more depth to consider what is actually realistic, but my view would be to keep that as broad as possible to send a welcoming message. You could hide the wiring on this and deal with some of that behind the scenes in terms of what—
Q27 Chair: We do not have much time left and there is more we could explore on this because it is really important. I was around when Fresh Talent was in existence, as was Professor Diamond. I think we had several conversations about the worth and the value of Fresh Talent. It was perceived at that point that Scotland had a bit of an advantage compared with the rest of the United Kingdom in their ability to maintain and hold on to international students. Of course that was subsumed into Tier 1. I know that immigration remains as reserved and, thus far, the Government have refused to look at a separate and distinct Scottish solution. There is the example of Canada that has the provincial nominee scheme in several of the provinces. Does anybody on the panel have a view that there is something distinct we could do in Scotland, given the value that we have, the international students and the demographics, the value of the higher education sector?
Professor Sir Ian Diamond: There is no question. For Scotland this is a real opportunity and we have particular sectors that are in need of talent but where we are global centres. I could mention the creative, biopharm, big data, oil and gas, energy more broadly. We are global centres and, therefore, the more we are able to attract people the better.
I would echo what Alan has said about his three options. My only point would be that the first of them is the simplest: everybody gets two years post-study work, but then working with the higher education institutions in a something-for-something deal because the sorts of things that Alan then moved on to talk about under his third option which would work for the University of Edinburgh would be different for the University of Aberdeen or for Dundee College. I could go on, but if everybody was engaged with explaining what was right for them, one could get the benefits of all worlds. Two years post-study work, real work with SMEs to benefit the Scottish economy and to ensure that there was better connectivity between universities and business in Scotland; wouldn’t that be great?
Anne Cant: The only extra I would add is that it is the flexibility I think that could work. Alan mentioned the Australian model and we have been looking at that to see what a best practice was. They offer the post-study visa, anything from two, three, four years, but they have linked it to the academic qualifications, so the four years would be perhaps for a PhD or whatever. What they also do is link it to the relevant industry so that there is a joined-up, seamless approach. The feedback we got was that it was extremely attractive because once you have studied there, they give you a green card to work, and that was extremely attractive for international students. So when we are trying to compete on all the other wonderful things that we have to offer, it is the visa part that is letting us down.
Alan Mackay: Following up on that quickly as well, what an HR director will probably say is, “And what then after the two years? We have invested all the time and effort and potentially money in developing this member of staff. We are not a global business that they walk off from us”. We do need to think beyond that in terms of movements on to permanent settlement because of the investment that the company has made in the post-study work student.
Q28 Chair: Wasn’t there some good evidence when Fresh Talent was evaluated that there was quite a movement beyond the two years that was available through Fresh Talent and businesses were then able to hold on and retain? I know Professor Diamond was involved in some of the Fresh Talent initiatives. I think there was reasonably good evidence to suggest that that is what happened.
Professor Sir Ian Diamond: Anything I could say would be anecdotal but would support what you have just said.
Q29 Chris Law: I want to move on a little bit to what the University of Edinburgh has proposed, which was being able to act as a co-sponsor for international students who want to take up work in the sector where there is an acknowledged skill shortage. Could this work as part of the current visa system and, also, should other colleges and universities be able to act as co-sponsors, and what criteria should apply to these institutions?
Alan Mackay: It is something that I think you should explore further. There would be additional costs to the institution in doing so, but there is an advantage to doing this and also working as part of the more joined-up, holistic team approach to how this might work. As I said, if there are no changes in the way in which sponsors are dealt with, why would I want to sign up to become a sponsor of international staff when I consider that to be quite a big risk and quite expensive? There is one small company quoting that it cost them £7,500 worth of legal advice to deal with the compliance attached to this. When you go and talk to other small businesses—I know what my response will be in terms of my bottom line on that one. So the question is: how can we help one another? That is what I meant by that.
There are other things that could be looked at, such as if this is introduced in Scotland without a border check being done, how do you stop movement of talent to the south-east and London? You could look at things like how that works into income tax codes, for example, in terms of geographical locations. You could start to introduce levels of specificity and differentiation in here, if we are clever about it, and the institutions then have an interest because of the licences that we manage for staff and students, which are enmeshed. So our world leading cardiologist is dependent on what we are doing in the admission of high-quality students and ensuring that they complete their studies. The whole thing is viewed as one by the Home Office. There is lots of potential there for moving it down into real detail in terms of having a very clever approach to how this works, and beyond two years as well.
Q30 Mr Chope: One of the great successes of Scottish universities is reflected in the fact that you have a very low unemployment rate for graduates. I think it is 6%, which is about the lowest in the country. You also have a problem in Scotland of quite high unemployment generally, compared with the rest of the United Kingdom. Earlier on Mr Mackay was saying that we are in a global race for talent, and so I would be interested to know why you don’t seem to be concerned about the fact that we are artificially restricting the chance of Scottish school leavers to join that global race. What seems to be happening is that less well qualified international students are taking places at Scottish universities that could be available for Scottish students if there wasn’t this artificial cap on the numbers that can be accepted.
Professor Sir Ian Diamond: That is factually incorrect.
Q31 Mr Chope: Would you like to tell us why that is factually incorrect?
Professor Sir Ian Diamond: It is factually incorrect for all sorts of reasons. One, on being less well qualified, I am not quite sure what your evidence base is for that. Secondly, we are very conscious, as a nation, that we do need to increase the skill base of students across Scotland. That is why I always say it is not a debate between FE or HE; it is an argument that we need fewer people with no skills in Scotland because we know that having those skills is associated with lower rates of unemployment.
Therefore, we need to do everything we can to raise aspirations to go to a FE college or to university. We have right across Scotland, in universities in Scotland, real commitment to widening access and the moves that have been made—Dundee is a real beacon in this way—to improve the articulation between FE and HE to ensure that we do get people with the right skills is something that we are completely committed to. This is not a case of giving up on our own and bringing in people from elsewhere, absolutely the contrary. What Scotland needs is more people with skills, people in Scotland to get more skills, but at the same time, it needs to attract the very best people from international areas.
Alan Mackay: I wholeheartedly agree with that and, as I pointed out earlier, if you want a train that doesn’t stop at any stations, carry on. I was in Ireland last week and they are delighted with the fact that this is happening in the UK and so are the Australians. The Americans will tell you that in the margins of meetings, “Carry on doing what you are doing because this is happening anyway. If you don’t want some of the economic benefit or the benefit of your education system attached to this, don’t have it, we will have it”. The whole research ecosystem is moving. The world is shifting south and it is shifting east. You can see that and I will not go into the detail on that in terms of the spend on R&D.
If the UK does not supply the booming education markets and unmet domestic demand, others will. People have choice that they have never had in human history; they can go elsewhere; that is their choice. We, like Aberdeen, like others, have spent centuries building up our reputation and we protect that at all costs and that is why students come here because they know that the UK has excellence and quality at its very heart. That is what this is about; it is about maintaining that quality and maintaining the diversity of the pool of entrants that we have. But this is also for those students and we have many of them—Edinburgh, Aberdeen, Dundee will have the same thing—across Scotland who will not or cannot travel outside Scotland for their studies. We are internationalising their labs and lecture theatres by bringing that talent here and it opens their horizons to new opportunities.
There are tremendous efforts across the college and university sector to support much greater outward mobility, specifically of Scottish students and those who maybe can’t afford some of the opportunities that exist. We are working very hard in other ways to get it. But make no bones about it, the talent that we are bringing in is giving those students a great international experience too. We could, if we wanted to, just admit people because it is a cash generator or is seen that way for universities, but those students would fail because we maintain very high quality standards. I would then lose the licence, not just for international students but all members of staff. Go back to my world-leading cardiologist who is also now unable to come because of low quality, and it is a focus on the cash as opposed to the quality.
Q32 Mr Chope: I am not suggesting that there should be a reduction in the entry qualifications. All I am saying is that by having a cap restricting the number of Scottish undergraduates from Scotland, it means that it is not an open, level playing field where people can compete on merit. There is a restricted quota for people from Scotland. You seem to be arguing that you are against quotas for immigration but you seem to be supporting the idea that you should have quotas for the number of talented people from Scotland who can have the privilege of an undergraduate education.
Professor Sir Ian Diamond: I have not actually said that. I support the Scottish Government’s views on higher education; however, I would welcome an easing of the cap. I don’t have a problem with that being the same statement but that in no way means that I am saying that international students are taking the place of Scottish students because I am perfectly clear in my mind—and I know Edinburgh would be exactly the same—that we can increase the size of our universities and maintain the quality. That in no way means that there is an either/or here and it is also to recognise that many of the courses that we run, which do attract students from across the world, only attract relatively small numbers of local students and there are very good reasons for that. We have the skill set that is in demand elsewhere.
Q33 Chair: But you can see, Professor Diamond, the either/or case that Christopher Chope was making, particularly when it is possibly confused with the fact that we now have students from beyond Scotland, from the rest of the United Kingdom, paying fees at our universities. How does this impact upon how all this is observed and worked out in the institutions?
Professor Sir Ian Diamond: I have said very clearly it is not an either/or. We have the ability to increase our numbers and we take a view that the numbers that we can take while maintaining the quality—and, as Alan has said, we lose in every way if we take in people who do not have the ability to benefit from a University of Aberdeen degree. It is not an either/or; it is simply that we have a spectrum of students and we think it is good to have an international campus, a campus with Scottish students that gives them, as Alan has said, an international experience.
Q34 Mr Chope: Fine, I have at least managed to get you to concede that you are in favour of easing the cap. By how much would you like to have the cap eased and why are you not in favour of removing the cap? You have been able to see with your own experience from Southampton what a success that has been and how it has opened up higher education opportunities that were not available there before.
Professor Sir Ian Diamond: We can talk all day about the fact that it would be nice were there to be no cap but I accept there is a budgetary constraint that has to be in place in that system and that is fine.
Q35 Chair: Thank you. Just one last question because time is up. We are very grateful for all your contributions today and all of us around this Committee recognise just where we are in Scottish education and in terms of international league tables. We are hearing your very passionate concerns and views about what is happening with international students. Maybe just in a couple of sentences: how much should we be worried about this as a Committee if we don’t get some sort of solution or some way of this being addressed? What are your major concerns and just a couple of sentences to wind up, if that is all right?
Anne Cant: For me and for our college and for our students, it will have a serious detrimental effect, but I am not just talking about a post-study visa. I am talking about the restrictions around the total UK Border Agency, around Tier 4 and how difficult it is for colleges to be able to compete, to attract, to retain and to make sure that we are providing a world class provision for all our students, for the benefit of all our economy and for the benefit of our universities. I am very concerned and I would urge for the Government to look at it in a complete package, not just ad hoc and piecemeal.
Professor Sir Ian Diamond: We have a great higher education system up here. It is absolutely brilliant and it can be used for the benefit of Scotland and the wider United Kingdom, both in terms of the economic value but, most importantly, I believe the soft power that comes with a long-term commitment to Scotland and the wider United Kingdom by people who have been able to study here in Scotland. That is something that we are losing out on at the moment. We can and will do everything to maintain our world class education offerings right across Scotland but we need improved policies in Westminster to enable us to be able to recruit the very best, both students and staff.
Alan Mackay: I would wholeheartedly agree with that. If you look at the figures projected out, in the late 1970s early 1980s there were 1 million students studying at tertiary level outside their home country. That now stands at 4.5 million. In the next decade it is predicted by the OECD, World Bank, IMF to potentially double to 9 million. This is happening anyway. As I said, we are flat-lining as a nation during a global boom and there is double-digit growth in Australia and the United State. The Institute of International Education in the United States released a report last week and they had their highest growth in 35 years. All of this is happening anyway and there is going to be more of it, and it is a shame when you see the quality that runs through this country, Scotland, and the United Kingdom.
It is not just the benefit that the higher education sector or Scotland’s colleges get. It is the wider benefits that accrue right across Scotland and the United Kingdom from investing in this. Part of it is very frustrating but it should not just be frustration within the higher education sector. We see broad cross-party support for this in many of the committees as well. It should be frustrating for a lot of other people when they see this happening and see the train go through another station without collecting anybody on the route, the high talent migration that you could be bringing on board. We all have interests in better management of the whole piece on migration but it should be done in a more differentiated and nuanced way with benefit for us all.
Chair: On that train metaphor, once again, thank you so much. It has been the first session that we have had on the post-study work visa and you really helped to give a flavour for some of the issues that we will hope to pick up in the course of the next few sessions that we are going to have. Thank you.
Professor Sir Ian Diamond: Thank you. It has been a real pleasure and an enjoyable conversation. Thank you.
Anne Cant: Thank you.
Alan Mackay: Thank you.
Examination of Witnesses
Witnesses: Gareth Williams, Head of Policy, Scottish Council for Development and Industry, Howard McKenzie, International Vocational Education Consultant and Fellow, Institute of Directors, and Helen Martin, Assistant Secretary, Scottish Trades Union Congress, gave evidence.
Q36 Chair: Welcome to the Scottish Affairs Committee and our inquiry into post-study work schemes. Just a couple of opening remarks: please use the little button on your panel there when you are replying and responding to any questions. Mr Williams apparently has some travel difficulty and disruption but he will join us as soon as he is here and available. If somebody comes to sit next to you there, Ms Martin, it is Gareth Williams whom we are expecting very soon.
Thank you both very much for coming along to the session this afternoon. As you know, we are looking into post-study work schemes. We have heard from our colleagues in the education sector previously and we are going to be hearing from the Scottish Government and the Minister in the next session, but we are very keen to see some of the difficulties and issues as they emerge in our business sector. I would like to kick things off on the Tier 2 general visa. Our colleagues in education have said that there are a number of difficult issues with this, particularly with the number of spaces that are available for sponsorship. Could you talk a little bit about your experience of the Tier 2 scheme: is it adequate, does it meet demands and what is your experience with operating the system?
Howard McKenzie: Thank you, Mr Chairman. I am speaking on behalf of the Institute of Directors and our members here in Scotland. As far as Tier 2 is concerned, what we have found out is that a lot of our members use this for intercompany transfers and it is bringing people into the country. Since the quota system came in they have found that they can’t recruit the people that they need. They have business strategies where they need to bring in four or five actuaries from abroad in order to train them up and are unable to do that over the period of time, and so that is part of it. Another part is that it is quite tricky for businesses that are not one of the big ones. If you have a HR department you can keep the bureaucracy and the process from your Tier 2 status going quite effectively. If you are a small business—and most of the businesses in Scotland are small or relatively small—it is more difficult to keep that going. If you are bringing in only a couple of people each year, it is not worth the effort to do that, which means they don’t access the skill and we are more interested in accessing the skill than providing a market edge for the universities.
Q37 Chair: Thank you for that. Ms Martin, we saw in the evidence that you submitted to this inquiry that you raised concerns about the closing of the post-study work visa and that fact that it did not consider the needs of the UK economy. What evidence is there about the impact closing this route has had on your members?
Helen Martin: It is clear that by closing the route we have seen the numbers of graduates who are staying on to work in Scotland dropping. One of the really good things about the post-study work visa was that it gave young people who have studied at university in Scotland the opportunity to use their skills in the economy and having high skilled workers in the economy is invariably a good thing. We also find that the universities find it harder to recruit international students in the first instance because of the closure of the visa and that has an impact on our economy as well.
Q38 Chair: Does anybody else have a view? I am glad that you have been able to join us, Mr Williams. I understand that you have had a few travel difficulties. Maybe just for record say who you are and also what your major concerns are about the closure of the Tier 1 route and your experience of recruiting overseas students on the basis of Tier 2.
Gareth Williams: Good afternoon, everyone. It is Gareth Williams, Director of Policy at the Scottish Council for Development and Industry. My apologies for being slightly late. As has been mentioned, there were some travel issues.
We are very supportive of the reintroduction of the post-study work visa and we have already heard about some of the issues around closure of the previous route. Equally, we like to look forward and we would see internationalisation of the Scottish economy as an absolute priority. Perhaps if I could touch on some work we did last year on access to global skills among Scottish businesses that showed that less than half of businesses agree that they are able to recruit in Scotland young people with the global skills required by their business and almost half think that a lack of young people with these skills maybe are a constraint on their international business plans over the next five years. We think that the introduction of a post-study work visa is one means of addressing that very concerning thing.
Q39 Chair: Is it your experience—and maybe Mr McKenzie could help us with this one—that with the closure of Tier 1 and the reliance exclusively on Tier 2 to ensure that overseas students are recruited, this is having an impact on the ability to support and secure overseas students in a wide variety of different sectors and professions?
Howard McKenzie: Yes, it is impacting, not only in overseas students but in all graduates. During the last 10 years there was an 8% reduction in UK students at the universities in Scotland and if it wasn’t for the EU students filling in the gap, businesses here would be struggling to get graduates. One of our problems here in Scotland is migration south of the graduates from the universities here, moving down into London and the south-east and leaving a huge skills gap. When Tier 1 was operating and we had the post-study work visa, the Fresh Talent initiative, there was plenty of evidence there that businesses were using that to fuel global activities into some of the developing economies. It is a very quick and effective route into a company globalising itself. It is not necessarily the skills, it is the diversity of the student. The cultural diversity and the skills diversity of those students are far more important to us than some of the straightforward skills.
Q40 Chair: We were just hearing from some of our colleagues in the education sector earlier—I cannot remember what the figure was—a ridiculously low figure for businesses that were taking up the Tier 2 opportunities with post-study work. Is there any specific or particular reason why there are so few SMEs who are not taking up the opportunities like Tier 2? If there are difficulties, could you start to explain to this Committee what they are? Again, Mr McKenzie, it is possibly you I am looking at for some sort of a response to that.
Howard McKenzie: We asked our members who had used the previous post-study what the difference between the two is. What they came up with was the Tier 2 process tends to be more permanent, whereas the post-study work visa was time-capped for the two years and gave them the ability to have a strategy that said, “We will have this person for a period of time. In that time we will build up the business in the country where they come from and then we will put back” that fitted the business strategy. In Tier 2 you take them on permanently and it is not quite such a time-framed process. It is a little bit more complicated, it is a bit more difficult and it is not as easy to develop. Again, if you don’t have an HR department that can deal with all the bits and pieces like that, then businesses have withdrawn from it. We have seen that even some of the larger businesses have started taking people elsewhere in the world.
Q41 Chair: Do any other panellists have a view on that? Ms Martin.
Helen Martin: There is an element of sponsorship within the Tier 2 visa that means that you are dealing with the Home Office quite closely and you would have to be following Home Office rules quite closely and meeting the requirements of being a sponsor institution. Previously, on the post-study work visa you were simply allowed to work for two years and then you needed sponsorship in order to move into the next form of the visa, the Tier 1 and the Tier 2, to stay in the country, but that allowed you parity of the scheme with UK graduates for that period. It was much easier and less of a risk for the companies that were taking on those students.
As well, there is an issue with the cap on numbers. Even if you are within the system—and some of our affiliates work in sectors where they do use Tier 2 visas, for example, the higher education sector—they find that they struggle to keep taking on more people on Tier 2 visas because they are already holding Tier 2 visas with their staff. There were some issues there about using the system and getting the most out of the system for the staff because the priority of the system is to reduce the numbers year on year and that goes against what companies are trying to do.
Gareth Williams: I have nothing specific to add to that. Simply, perhaps, a number of our members have reported wider difficulties with the visa system and the broader context is of a Government who are not particularly in favour and encouraging of people recruiting down those routes. I don’t think that that creates a culture of willingness to go out and seek and try to overcome some of the difficulties that might be in place.
Q42 Chair: We have just concluded taking the evidence for the report we are doing on creative industries and what we were finding from our friends in the creative industries, those that are employers, is that there seems to be a bigger mass of small and medium enterprises in Scotland than in England. Again, what we were receiving in some of the evidence was it was hard to hold on and recruit international talent. I don’t know what you have found in your experience with that and whether losing the opportunity to recruit international talent is perhaps disadvantaging Scottish business and Scottish enterprise. Is that your experience about how you are seeing these things in operation?
Howard McKenzie: That is certainly what our members are saying, that that has an effect. The IoD tends to be larger employers, but talking to some of the smaller employers, yes, that is exactly one reason. We have to realise that it is the labour market and people coming out of university as graduates and entering the labour market. If you suddenly then have a whole load of hurdles for the employer to go through—Tier 2 status, this, that and the other, dealing regularly with the Home Office and keeping another set of records, completely different from everybody else—it makes it more and more difficult for businesses to say, “Okay, that is a strategy we want to do”. Under the post-study work visa they were keeping the normal records as for everybody else, and for smaller businesses it disadvantages them even more.
One of the examples that we were given was about tailoring and kilt-making, which is a very Scottish example and they used to bring people in from overseas, the master tailors, in order to, first of all, teach some of our own people how to do this and now, of course, they can’t bring them in because either they hit the quota or it is too difficult or they are relatively small businesses that can’t deal with the bureaucracy.
Chair: Any other views from the panel? Mr Williams.
Gareth Williams: The sectors that we have worked most closely with around these issues would be the digital sector and the oil and gas sector. What you are hearing would chime with what we have heard. The recent statistics show that the percentage of SMEs reporting international exports has declined in Scotland over the last five years or so. The challenges around SMEs exporting are growing rather than getting any easier, so there has to be a big concern about some of these issues they are facing now.
Q43 Chris Law: I think you have already touched on a couple of areas about skill shortages in Scotland but there has been evidence that Scotland faces a greater skills shortage than other parts of the UK. Why is this? I know you have touched on that already but I wonder if each of you could expand on that.
Gareth Williams: Speaking to our members recently, the attraction and retention of talent is one of the absolute key issues that they see for the Scottish economy over the next 10 years. It is a great advantage to have; a global centre on our doorstep has always been a draw for young people to go to London. Some employers are starting to report some other concerns around the northern powerhouse and whether that is going to prove a draw for talent as well, so that is one issue. We have our own demographic issues as well and I could go into all of the detail there but it looks as though we will have a declining working-age population from the early 2020s and I don’t think that is the position for many other parts of the UK. When we think about the challenges of growing productivity, innovation and internationalisation of our business, then we have to look at that with a high degree of concern.
Helen Martin: We do have skill shortages in certain industries. There will be industries that consistently report skill shortages. Oil and gas was a classic one. However, given the current circumstances in oil and gas, they are perhaps less likely to want to recruit migrant labour than they were before. Life sciences, the NHS, the higher education sector are the sorts of sectors who do rely on migrant labour over a period of time. But we also need to not overestimate the responsibility of the employer to try to put in a skills pipeline for their own domestic labour force as well and I don’t think anything that we say today should be taken as a reason not to continue on that skills development route. At the same time, having good systems that allow us to draw on the talent that already exists in Scotland, particularly given the fact that these graduates are young people who will be entering the labour market, would help with the demographic problems that Gareth has just outlined. It seems like a good idea to do these sorts of things as well as making sure that we have the skills pipeline in place for our own workers.
Howard McKenzie: Skills shortages are notoriously difficult to define; almost the moment you have defined them they have gone. In fact, there is an economic theory that says there is no such thing as a skill shortage, it is just an employer not paying enough. Adding to what my colleagues have said about the migration south, about demographics, the other thing that is particular to Scotland is social mobility. Some people do not necessarily want to work in some of the places that we have, whereas if you are a migrant worker where you work is not that important. You are in the country, so whether you are working in Aberdeen, Inverness or Edinburgh does not matter, whereas if you are in Edinburgh and you are born in Edinburgh, working in Inverness feels like north of London for some people.
Q44 Chris Law: You touched on some specific needs, and indeed shortages, in particular life sciences and the NHS. What are the specific needs that the Scottish economy has and why are international students important to filling in those positions?
Helen Martin: For the NHS there is a structural issue in that it can be quite difficult to recruit all the people that we need after we have trained them to keep them here and not move down south or other locations. We do tend to use migrant labour to make sure that the NHS is working in a proper way. Life sciences is perhaps a little bit different in that it is an expanding industry, it requires very certain skills that are maybe difficult to find within our own labour market alone and uses a range of ways to fill their skill shortages, one of which is recruiting migrant labour.
But as I have alluded to, you can see ebbs and flows within this in that you can have a skills shortage one day and then you find your business model turns and there is not necessarily the same shortage the next day. It is difficult when we are sitting at a government level to put in the proper skills pipeline. We spent an awful lot of time working with SDS putting in a skills pipeline for oil and gas that now looks like it has dried up and nobody could have predicted that two or three years ago. Next year we might find that that tap is turned back on and we need plenty of workers; it is the economic cycle in some ways. We do need some flexibility in our system or else we are not going to have employers who are able to grow.
Howard McKenzie: What I would add is that it is not necessarily about the skill shortage, it is also about people shortage. We have about 100,000 people who are unemployed in Scotland and with the economy growing as it is at the moment we are going to run out of people very quickly. That is on average, not necessarily that they are the right people for the jobs that are around. Unlike other parts of England—and other parts of the UK as well— where the labour market is expanding, it is not expanding as fast in Scotland and it won’t sustain economic growth unless we add to it. At the moment we are adding to it with EU graduates and we have denied ourselves another source of good skilled and good people.
Gareth Williams: I mentioned growth of skills earlier and perhaps I should have said that although language comes into that, what I meant was the ability to work well with people from all parts of the world where there are clients, customers, other businesses, and clearly that requires a range of different cultural understandings. Not all of those are going to be available indigenously, so we should be welcoming talent of that kind. When we talk about skill issues our members particularly highlight them as an area of consistent concern, but also there is a persistent dearth of leadership, management and planning skills within the Scottish economy. Having people who are ambitious enough to want to come from overseas and study here and work here should be something that we try to take advantage of.
Q45 Chris Law: Does the Migration Advisory Committee’s shortage occupation list, together with the Scotland-specific list, accurately capture the areas of skill shortages in Scotland? If not, what is missing?
Howard McKenzie: My answer would be no, because it is not possible to capture that.
Chris Law: Yes, I thought you might say that.
Howard McKenzie: It is a bit like the difference between a photograph and a video. You have one photograph, a snapshot of the skills at a particular time, and it is probably out of date by the time we get it into print but it is all we have and it is better than nothing.
Helen Martin: I would pretty much agree with that. They go through a fairly robust system to try to draw it up. I don’t think you could expect them to do anything more than what they do. It is just that it is a very difficult thing to capture and it is a very imperfect science. It does not necessarily take account of some of the other issues within the system like the intercompany transfers and there are other routes that are also being closed down here through this visa system. It is a good system but it doesn’t necessarily meet the needs of the economy that well.
Q46 Chair: I am just having a look at the Migration Advisory Committee’s lists now and what we find in the UK list is that we recognise those throughout the UK that impacted Scotland positively, like most significantly those in oil and gas, television and video games. Then we have the separate list for Scotland, which additionally includes physical scientists, medical practitioners and nurses. I used to think that fish processors was on that list; it must have been dropped in the past few years. I am interested in your view, Mr McKenzie, when you said that how this list is drawn up is almost arbitrary, but this is a list that is supposed to be in a position to assist us on skills shortages. I want to tease out a little bit more your own feelings about what we could do in order to try to ensure that we do get this to address skills shortages when it comes to international talent. If that is all we are getting extra for Scotland over and above what is available for the UK, is there a sense that this insufficient in addressing some of the real skills shortages that we have in a variety of sectors?
Howard McKenzie: The issue is it is so difficult to tie that down and also that a lot of our skills shortages, as they would define them, would occur in small businesses that do not communicate them very well. We know ourselves when that list came up for review recently we conducted a consultation with our members and got very little back that was of any use, to be honest. I am sure you did the same sort of thing.
Q47 Chair: Do you think that might be an exercise: is industry aware of this as an issue? This is pretty critical in terms of additional assistance that we are getting to help skills shortages. Would your survey suggest that maybe a lot of businesses and industries do not recognise this is available?
Howard McKenzie: I can only speak from my own personal experience in running businesses, that you do not realise you have a skills shortage until you try to recruit someone and they are not there, so therefore you do not have that awareness all the time. You suddenly find, “I need another skilled so-and-so” and you cannot find one, then there is a skills shortage. But then one comes and you forget about it again.
Q48 Chair: Does the STUC have any view about that?
Helen Martin: Yes, a couple of things. We always get the consultations from the Migration Advisory Committee about drawing up the Tier 2 list and I would always put it out to unions and say, “Does anybody have anything that they would like to see on this list?” I never get a huge amount back, because I find the unions that are most engaged in the Tier 2 visas tend to be people who are working in sectors where they are already accessing Tier 2 visas. If you are working in a sector where you are not, then you do not necessarily think of it in those terms. It does not mean that you do not have a skills shortage or a recruitment shortage, but just because you are not necessarily thinking of a solution for that skills shortage and recruitment shortage of being migrant labour, if that makes sense.
There is the other issue that we can have skills shortages in industries where the skills levels are relatively low and where we find that they can be filled quite well through migration from the EU. I think fish processing is maybe one of the ones where they find that migration from the EU is filling any shortages that we have had.
Chair: It has gone now anyway.
Helen Martin: That is probably why it is not on the list, because it would not need to be on the Tier 2 list if they fill it with EU labour. I think maybe people are finding other solutions because they do not want to deal with the difficult immigration system as well.
Gareth Williams: I think the Migration Advisory Committee had tried to raise awareness and communicate gathered evidence within Scotland. I suppose thinking about our own role, once you identify particular sectors that have issues, you would tend to go back to those sectors when another call for evidence is issued. It may be similar for the Migration Advisory Committee, and that means that you are not gathering emerging issues in other sectors of the economy. That is maybe something to do with why they are not being identified.
Q49 Chris Law: Do you think, basically, these lists have been effective? Is there a possibility of having something that is far more efficient, maybe that is continuously changing over time and is responsive quickly so that we can identify where these skills shortages are, or should we abandon the idea of these lists altogether?
Howard McKenzie: I think we should abandon it, to be perfectly honest, because it is so difficult to do, and what you tend to get is, “It is not on that list, so therefore you cannot have that person”. It could be an inter-company transfer. I talked to one company that is just opening up their activities in India and wanted two Indian students from Aberdeen University to go on business with business students. That was purely because they wanted to understand the market better, they wanted to understand what they were doing before they got into the whole of the issues of venture capital and partners and all that sort of thing, have people that really understood what was going on. They were not able to do that because that perhaps was not on the list as one of the skills. I do not think it is particularly helpful. I do not think you can define skills shortages in an economy anyway. If you look at the experience of Singapore, where they try to do it the other way and define the skills in the economy, they got it wrong as well.
Q50 Mr Chope: Mr McKenzie said earlier on that in the last 10 years, there has been an 8% reduction in the number of UK students at Scottish universities. That equates to about 13,000 a year, which is roughly the same number as currently are non-EU international students. If we want to develop and foster home-grown talent, why is it that the UK student numbers at Scottish universities have been dropping so significantly?
Howard McKenzie: I think some of it is cost and the cost of studying. The other thing that we should remember in Scotland is that the HND route in Scotland is the first and second year of degree and if you add that in, those figures go back up again quite considerably. The HND in Scotland is slightly different. I think one of the reasons why it is dropping is that in the Scottish economy the difference between what you get as a premium as an employee between a degree and a non-degree is not as high as it is elsewhere, so therefore they have not come forward to do the degrees in quite the same way. The other thing you have to think of is that universities are businesses and so they have tended to look at non-EU students, maybe even EU students, as a good source of income at a time when they do not necessarily get the fees for a Scottish student.
Q51 Mr Chope: Do you think that the cap on numbers of undergraduates from Scottish universities is a constraint on the market?
Howard McKenzie: It must be, yes.
Mr Chope: Does anybody else want to comment on that?
Helen Martin: From our point of view, I think we have seen a bit of a drop in the rest of the UK students at Scottish universities, and that is undoubtedly due to the cost of studying at a Scottish university. UK students are charged tuition fees in Scotland at a rate similar to what they would be charged for a similar degree in England, but they do four-year degrees in Scotland and three-year degrees in England, so it is more expensive to study in Scotland than it is to study elsewhere in the UK. It does not mean that some students do not choose to come here anyway. St Andrews, for example, would still receive quite a lot of UK students, but there is a disincentive to come here if you are from the UK. EU students get to study free, just like a Scottish student, because that is how the rules work.
For Scottish students, I think there are still good numbers in the system. There is a real incentive for Scottish students to stay in Scotland because of the way our tuition system works and the fact that you can get your first degree free here. That helps to make sure that Scottish students do want to stay within the system and a lot of higher education is delivered in colleges as well, so we have to make sure that we count those into the wider numbers.
Q52 Chris Law: Would it be fair to say that if we had a system that enabled more people from the United Kingdom to come to Scottish universities on a level playing field that that would enable Scottish universities to recruit more UK students, which would help fill the shortages of qualified people that we have been referring to?
Helen Martin: We are talking about two different issues, I feel. A Scottish business should be able to recruit a UK student without their having studied in Scotland. There is no reason why they need to be a University of Edinburgh graduate. I studied at the University of Manchester and I got a job in Scotland fine. I did not need to have been at a Scottish university to do that. In some ways, it might be about trying to improve our recruitment methods through the rest of the UK as well to help with filling some of these shortages.
But I think as well it is about using the talent that is here, because you have universities like the University of Edinburgh, where 50% of the students are non-EU students, and it seems odd to have these great people come into the best universities in the world who are acclimatised to Scotland, who have lived in Scotland for a considerable period of time, who can clearly speak English, who have good skills. Why are we not using them within the labour market? It seems like the post-study work visa was a small contribution to trying to harness some of those skills and it was doing good things in the economy.
Howard McKenzie: But some of that will be demographics as well.
Q53 Chair: Something that came up in the previous session from Professor Diamond and our guest from Edinburgh University was that international students offered a soft power issue, where we have had people coming here, studying, as you said acclimatising to Scotland, taking an interest in the nation, going away with a favourable attitude and response about this nation and then perhaps coming back. Is there any evidence that plays itself out that because we are able to offer not just a university experience to overseas students but a short working experience, we will get benefit in the future from an interest or a possible investment in Scotland? Is there anything that suggests that at all?
Gareth Williams: I could not point to any particular evidence of that. I think it would certainly be a fair assumption that that is the case. If you look at some of the most successful knowledge economies around the world, Silicon Valley and other places like that, that is one of the ways that they successfully operate. I think more could be done to make best use of alumni from Scottish universities who go back to their own countries. We should not lose sight that many of them, in addition to their own talents, are highly connected, tending to come from influential families, whether that is in government or business and so on. More certainly could be done there and more could be done during their stay in Scotland to make links with Scottish students, whether it is school, universities, businesses and so on, to wring as much out of the opportunity as we can.
Howard McKenzie: The IoD’s policy is that students in general should be dropped out of the immigration figures anyway. Anyone who has been abroad on an outward mission or anything like that, some of the things run by SCDI, knows the power of the Scottish diaspora. When you are abroad, wherever you are, you can open doors because you come from Scotland and you have a Scottish name or a Scottish company. After all, our most successful export is people and always has been. That diaspora is really important; those type of skills are absolutely vital. I was in Saudi Arabia last year and you bump into Saudis who had been to Scotland, to universities in Scotland. That opens doors in places where you do not expect the doors even exist.
Q54 Kirsty Blackman: I would like to ask about alternatives and possible schemes for post-study work, first to Gareth at the SCDI. In the evidence, you have been saying that reintroducing the previous unchanged post-study work scheme would be favourable. Is that the scheme that you would prefer or would you prefer to see a different scheme?
Gareth Williams: We have not made up our mind on that particular issue. We have been part of the working group brought together by Scottish Government and we are now part of the cross-party group. We have been recently involved in a workshop considering those sort of questions. We certainly would have no complaint with that scheme being reintroduced, but we want to find the optimum scheme, given the current political climate, the current needs of the economy and so on, so we are open to all discussions.
Q55 Kirsty Blackman: Do either of you have suggestions for schemes that you would like to see?
Howard McKenzie: Yes. I was involved in the working party that set up Fresh Talent in the first place. I think things have moved on and we learnt from operating that scheme that it can be a little bit better. The work that we are doing at the moment is honing that to make it first fit the new market that we have and also maybe the way that the universities are operating and the different type of student profile that we have. I do think it is important that we keep looking at these schemes and reviewing them. We learnt quite a lot: for instance, from our point of view, a lot of the employers that we found are all registered as Tier 2, so whether it should be Tier 1 or Tier 2 is an issue for us. A lot of our members are already registered as Tier 2 and it would be useful to have the same bureaucracy and the same people that they are dealing with. Not particularly fussed which tier, provided it is in there somewhere and is operating.
Helen Martin: We felt that the real strength of the original scheme was the fact that the student had parity in the scheme with a UK graduate, that they could do any job and that they did not need sponsorship and that was for a defined period of time. It would be good to see a scheme that replicates those issues, but I think it is fair to recognise that the strength and weakness of the scheme were two sides of the same coin in that the big criticism that the Home Office had of the old scheme was the fact that it created cases where people were not necessarily in the right work to get on to the Tier 1, Tier 2 scheme and then found themselves having to leave and were appealing decisions around that.
We would need to think about how we create a scheme that sets up an expectation that this is a way to get you into the labour market, it is breathing space to give graduates time to find themselves appropriate work to move on to Tier 1 and Tier 2, because at present, it is very difficult for a graduate to go straight into a Tier 2 role. It is quite complex, it is a big risk for the employer, there is potentially salary bars, and it is quite hard for them to do that, which is why the numbers of people doing it are so low. The idea is it is kind of a bridging visa and I think we need to set it up in such a way that that is understood by everybody involved or else you will find a place where people are quite disappointed at the end of their two years.
Q56 Chair: I forgot that Mr McKenzie was involved in Fresh Talent. I would like to explore your views a little bit about Fresh Talent before we come back to Ms Blackman, because I was involved and put several questions about Fresh Talent as a Member of Parliament during its operation. What strikes me about how it worked and why it was effective is that because we had a number of higher education institutions in the north of England complaining about it, obviously Fresh Talent gave us a competitive advantage, which we now no longer have. Do you have any other views about doing that, other than your concerns about how you move on to different tiers? Did Fresh Talent give us that advantage across the rest of the United Kingdom and do we need something like that now?
Howard McKenzie: Without a doubt Fresh Talent gave Scottish universities an advantage in the marketplace. It gave employers an opportunity to get in the skills of the people that they wanted, which was not there before. You could see that by the sheer numbers that took part. For Scotland, quite a large number of people took part, 15,000 or so over the period of time. That is quite a good skills base for us to have, so it was very effective in that process and the fact the numbers started going up meant that employers were using it. From our point of view, we are not particularly interested whether or not it gives the universities a great market edge. What we are interested in is that our members have access to the talent and diversity of culture that enables them to trade more effectively, particularly in the developing economies. But it certainly did work and, as you say, one of the problems was that the universities down south did moan somewhat.
Q57 Chair: Yes, and then of course it was subsumed into Tier 1, Tier 1 was then just effectively abolished and that was that. I know STUC was a big supporter of Fresh Talent when it was in operation. Would you welcome a similar type of scheme again for Scotland?
Helen Martin: Absolutely, yes. I am sorry if that is not clear. We are wholeheartedly in favour of this scheme. We thought Fresh Talent was an excellent scheme and it gave good opportunities to a lot of young people to come and work in Scotland; it was good for the economy. We do care that it gives the universities an advantage, because we represent members who work in universities, and we just thought it met the needs of Scotland that were very specific as well. We have a very specific demographic issue within Scotland and it is appropriate that we would have a visa system that takes account of the very specific needs of Scotland within a wider UK system.
Q58 Kirsty Blackman: Specifically for Helen Martin and the STUC, your submission talked about immigration policy having a presumption in favour of Scottish Government autonomy. Is that something that you still feel?
Helen Martin: Yes. Our policy is about codifying a relationship between the Scottish Government and the UK Government, so it does not necessarily change the overall relationship that we have at the minute. What we have seen in the past is the UK Government and the Scottish Government sitting down and negotiating out solutions for specific Scottish problems that allow the Scottish economy to have exactly the Fresh Talent initiative, to have a Scottish-specific shortage list within Tier 2. All of that kind of stuff is examples of the Scottish and the UK Government negotiating together to create an immigration system that works for Scotland.
What we are talking about is codifying that relationship so it gives the Scottish Government space to say what it is that Scotland needs within the immigration system and it would require the UK Government to give a reason why that should not happen. Ultimately we recognise that in a reserved system the UK Government would always have the ability to decide, but in some ways it helps that negotiation because it gives a role for the Scottish Government, it codifies a role and it gives a reason why the UK Government should be saying no or at least a list of reasons why the UK Government could say no.
Q59 Kirsty Blackman: At least two of you have mentioned concerns that the Home Office have about immigration in general and I wondered about the current immigration policy that is in place and the current thought about immigration from the Home Office. Do you feel that it is disadvantaging Scotland more generally than just post-study work?
Chair: Do not all rush at once.
Howard McKenzie: I think the answer is it must be, because the number of people we have at university as a proportion of the population is higher than elsewhere, so therefore it must be having a bigger impact on the Scottish process. As I said before, the IoD’s policy is that we should take the students out of the immigration process completely. But also one of the things that impacts Scotland more is that when, for whatever reason, somebody violates their status and things are not done, it impacts even more. I used to run an international college and at times when you reported at student, nothing happened, still nothing happened and they are still in the community, so therefore people got into the idea that it was quite all right.
Q60 Chair: Is this not a real issue though? Again in some of the evaluations of Fresh Talent was the view that if we did allow this opportunity to Scotland, which was denied in the rest of the United Kingdom, what stops these international students simply disappearing into England and into the ether? Is there anything you could suggest we could do that would ensure that did not happen or is that something you would be concerned about at all?
Helen Martin: In some ways, Home Office policy is already moving in the direction where you would be creating a system that would address that, because they are pushing very strongly on to employers rules about checking people’s status and visas. It would not take that much to have a system where you would have residency defined on the visa, so your visa to work is only valid if it is in Scotland. If you are not a Scottish employer, then that visa is not valid, so if an English employer is employing you, they are in breach. That should be clear from looking at the paperwork. If the system is working at all and employers are doing what they should be doing and they are checking what they should be checking, then this should be possible. If the system is not working, then the system is not working.
Q61 Chair: But you know how seriously the UK Government takes its immigration policy and this is a priority for UK Government. I saw figures last week that showed net migration at its highest. There is a cast-iron commitment to get immigration down to tens of thousands. Surely you see their concerns about something like this? We are going to be talking to UK Ministers and I am pretty certain what we will get is that this is a priority for this Government. Is there anything that you could say to us that will help us convince them that if we could do this in Scotland it would not have an impact on their bigger target to reduce immigration?
Howard McKenzie: When we had the Fresh Talent alone, you could only use your post-study visa if an employer had a Scottish postcode. When it became a UK-wide process, that is when everybody disappeared down south and that is where it got into problems. We have done it before, so why can’t we do it again?
Q62 Chair: If you have any information on that, it would be very useful to the Committee, because these are the sort of things we are looking at. Any other views?
Gareth Williams: One other question that we have raised, and I do not think we have had an answer to it yet, is whether the creation of a Scottish rate of income tax gives you another means of tracking where people are paying income tax, where they are registered and the rate of additional take-up.
Chair: Thank you, that is very helpful.
Helen Martin: The one thing that I would say about this is if you truly want to police an immigration system, you do need border officials who are policing the immigration system. Always pushing out to other institutions does ultimately create lots of burdens for institutions who are already following the law. We see this with the university sector all the time: they have created a lot of hoops for the university sector to jump through to prove that students are meeting all their visa requirements and what we find is that the people who were already running very tight ships are now running even tighter ships and it is not necessarily tackling the bit of the sector where abuse is seen. I think ultimately if the Home Office is really concerned about this, they need to be policing it through the Home Office, not necessarily always pushing that out.
Q63 Margaret Ferrier: Maybe if I could start with Gareth. You have all mentioned that you have been involved in the Scottish Government’s post-study working group. Could you maybe home in and tell me: did it shed any light at all on the debate around the post-study work group for attracting international students in particular to Scotland?
Gareth Williams: Could I ask you just to explain a little bit more what you mean exactly?
Margaret Ferrier: You all said that there was evidence that came out of that working group. Is there anything else that you want to add to what was said before that would help to attract the international student side into universities here and study?
Gareth Williams: We have facilitated a number of surveys that the Scottish Government undertook with businesses, universities, colleges in our membership around these issues. The findings are in—and apologies if the Committee has already seen them—and 90% of all respondents were in favour of bringing back the post-study work visa for international students, and 85% of businesses. A fair number of those would have been businesses in our membership and I am sure the IoD membership as well, and that goes to 94% among those who had hired an international graduate under the previous post-study work visa scheme, which I think demonstrates its effectiveness.
Margaret Ferrier: Anybody else want to add anything to that?
Howard McKenzie: I think one of the things that universities have said in the working party is that other countries offer a better deal for students and they are finding that some of the better students are going to Canada or Australia or wherever. From an employer’s point of view, that means, “I am not going to have quite as good people coming out of the universities as I possibly could have had. That is more important to me, that I have the right skilled people coming out. I want the best students.” That would have an impact over a long period of time. We will not have that sort of level of students coming through.
Q64 Margaret Ferrier: Thank you very much. This is specifically to you, Howard. As the Institute of Directors and as a UK-wide organisation, is this something that you have been pursuing with the UK Government as well as the Scottish Government and has any engagement you have had with the UK Government been positive?
Howard McKenzie: The IoD UK-wide has been talking to the Home Office, considering the student numbers and access to students and the skills, to international students in general. IoD Scotland has in particular been doing the post-study work visa because we were involved in that in the first place as Fresh Talent. We are very much aware in Scotland the bit that is different between Scotland is the demographic time-bomb that we are sitting on, whereas in the rest of the UK, they do not have that in quite the same way; the population is growing relatively fast and certainly enough to sustain growth in the economy. There has been engagement with the Home Office, but they tend to take what we are doing up here and take that to the Home Office as well. Not awfully encouraging about what the Home Office is giving as feedback.
Q65 Chair: I know that the IoD has been lobbying quite hard on this issue when it comes to including the students in immigration figures. It seems to me the same sort of representations have been made right across business and industry. Why are Government not listening to you guys? You represent most of British industry employers/employees. I think there is a consistent voice that is going out just now that something is not working and they are not appreciating what you are saying to Government. What is it you are going to have to do to try to finesse your message to see if you can get Government to understand your concerns and issues with this?
Howard McKenzie: You are the politicians.
Chris Law: Other than Christopher, we are all in Opposition.
Howard McKenzie: I think it is a case of keep going and keep putting the message forward. In general, what I think all lobbying organisations will say is if you keep going and you keep going, Governments do listen, and it does not matter what colour or what type of Government they are, they do eventually listen. We are getting to the stage, if the economy keeps growing as it is, where we are going to run out of people. At that point, there will be lots of running around and worrying about what is going to happen.
Q66 Chair: Is it your view then that immigration is good for the UK economy and how do we counter some of the information and the messages that seem to abound that somehow this is particularly bad for the UK economy? We are sitting here discussing the impact and value of international students and the hit our economy might take on this. How do we start to get this debate on to some sort of track when it comes to some of the real issues about this?
Helen Martin: This is just the key point. From our point of view, we represent 590,000 workers in the Scottish economy and a lot of those workers are in quite low-paid jobs and a lot of those workers feel very vulnerable to changes in immigration. But a lot of that feeling is a bit of smoke and mirrors. What they are really responding to is how vulnerable they feel in their own work; how poor the contracts are that are being offered by the employer; how poor the hourly rate is; the exploitation within that sometimes in terms of zero-hours contracts, being sent home in the middle of shifts, deductions from wages that are potentially unfair. There have been some very poor rulings at the European Union level that means that European workers can come in and undercut collectively-bargained agreements. Those sorts of things create real pressures on the labour market and create a sense that all is not well. It is easy for that to be distracted on to, “It is the migrant workers’ fault”. It is not. It is about how the labour market functions, it is about how we create a labour market that treats everyone fairly within it, including migrant workers. It is about how we make sure that rules are being enforced, because there is an awful lot of abuse going on.
Q67 Chris Law: What comes across strongly from both yourselves and the previous panel with the educational establishments is that clearly there is a need for a post-study work visa to be reintroduced. You were talking about policymaking and the question I have in my mind is: how soon do we need this to be reintroduced before we miss out, as things progress in Scotland, both in terms of demographics and of other countries taking up the advantage now that we are clearly disadvantaged?
Howard McKenzie: I think the universities will be able to give you clear evidence that that is already happening. The moment we got rid of the last system, we started to go backwards a fair bit. Certainly in terms of the wider economy, it is very difficult. Again, it is a bit like with a skills shortage and it is very difficult to point and say, “This is the issue”. What our members are saying is part of the skills space that they want is not there anymore and they would like it back.
Chair: Great, thank you all so much. That hour flew by and we are very grateful for your contributions. If there is anything further that you feel would assist this Committee in its inquiry into this issue, please submit any further evidence that you do have, but thank you so much for coming along this afternoon.
Examination of Witness
Witness: Humza Yousaf, MSP, Minister for Europe and International Development, Scottish Government, gave evidence.
Q68 Chair: Good afternoon, Minister, and welcome to the Scottish Affairs Committee. It is the first day of our inquiry into post-study work schemes. We have had a very useful session with colleagues in the universities sector as well as colleagues within business and we are very grateful for you giving the time to turn up to this Committee today. Just for the record, maybe you could tell the Committee who you are and if you have any particular opening statements you would like to share with us.
Humza Yousaf: Thank you, Chair, for that. My name is Humza Yousaf. I am the Minister for Europe and International Development. Assisting me and with me today is also Nikola Plunkett, head of our immigration team at the Scottish Government. No interests to declare as such, but I would like to thank the Committee for the opportunity to come here on St Andrew’s Day, and a happy St Andrew’s Day to the Committee. I am delighted to have the opportunity to contribute to the Committee’s inquiry. Indeed, I am delighted that you are holding an inquiry into the reintroduction or possible reintroduction of the post-study work visa.
Committee members will be well aware that the Scottish Government have been pushing and consistently pressing the UK Government for the return of the post-study work route in Scotland. We opposed its abolition back in 2012 and since that time have continued to make the case for its reintroduction. Here in Scotland there is cross-party and cross-sectoral support for a post-study work route that would allow graduates to stay and work after their studies are complete. There is no other subject that I know of that has as much cross-party and cross-sectoral unity and support than the reintroduction of the post-study working visa. There is no doubt in my mind that Scotland is at a competitive disadvantage by not offering prospective international students a post-study work route.
When Scotland is unable to offer these prospective students opportunities to remain and to work, there are multiple impacts that ripple through our economy and through our society. Our colleges and universities of course miss the chance to educate the brightest and the best from around the world. This reduces potential income streams for education institutes in terms of fees, but it also reduces the intellectual and cultural vibrancy of our institutions. International students do not just have an impact on the institutions where they study; they spend money in the communities where they live, where they also volunteer; they work in those communities; they provide welcome cultural contributions as well. They also provide a talent pool for those international businesses who wish to access overseas markets. It is not just about the loss of international students but it is a loss of international graduates as well. We are currently educating some of the most talented young people in our internationally outstanding educational institutes, then our country is losing that highly-educated, highly-motivated talent because of our businesses not having any way to employ them or only restricted routes to employ them.
The current scaled immigration routes are simply too restrictive and are preventing our businesses from employing the skilled individuals that they need. That is why the Scottish Government strongly support the provision of a programme to allow international students to stay here in Scotland after their studies and I very much look forward to the questions that you have.
Q69 Chair: Minister, thank you so much. First of all, could we maybe explore a little bit with you about the impact of the closure of Tier 1? The UK Government’s impact assessment on the closure indicated it could reduce the number of international students moving to work visas by 49%, but it appears to have reduced this number even further. Can you tell us what impact the closure of Tier 1 has had on Scotland and what impact it has had on our educational institutions and also some Scottish businesses?
Humza Yousaf: Thank you, Chair, for that. All you have to do is look at some of the statistics and some of the numbers in and around international students to see the full effect of the closure of Tier 1 and the abolition of the post-study work visa. From some of the key international markets that are producing some of the brightest and the best minds that universities in Scotland have seen, for example a 60% reduction of students from India, 45% from Pakistan, 29% from Nigeria, from key markets, even from key markets like China, where the increase in students when we had the post-study visa year on year was around 1,500 students and now we are sitting at effectively a plateau. So the numbers of international students that are coming forward from key markets has dramatically reduced now. For further education institutes, the effect is even more dramatic, a 72% reduction of international students to colleges, according to Colleges Scotland.
From an educational institute perspective, the effect has been huge and dramatic. I heard and watched your session this morning with some of the education institutions and I think they spoke very powerfully about the effect. It has had a huge effect on those businesses who wish to fill skills gaps. Through the UK’s survey of skills, we have seen that there is a dramatic skills gap in Scotland. It is more dramatic than the rest of the United Kingdom: 25% of all vacancies in Scotland are due to skills gaps. The corresponding figure is lower for Wales, England and Northern Ireland. On top of that, we have had anecdotal evidence from a number of small and medium-sized enterprises in particular that the current Tier 2 route that exists is simply too restrictive in terms of sponsorship licences and so on. So there is a lot of evidence that this is disproportionately affecting them.
As I said in my opening statement, I do not know of another issue that unites so many sectors as well as political parties, where you have trade unions sitting alongside the Institute of Directors asking for the reintroduction of it. That itself is evidence of the need for its reintroduction.
Q70 Chair: The UK Government’s main reason for closing Tier 1 was their view that graduates, overseas students who had been in the university sector, were not going into skilled or highly-skilled employment and it was mainly a route to settle within the UK and that a lot of people who were coming in through this route were basically finding themselves employment and not here to study. Have you any view about that? Surely the UK Government must have a point that Tier 1 to a great degree was not working and all it was doing was supplying another route to entry into the UK.
Humza Yousaf: I certainly do not sit here and say that Fresh Talent, as it was called in Scotland, was perfect. I think there were certainly reforms that could and should and if we were to ask for the reintroduction of a post-study work visa it would be with those tweaks in mind.
The second thing I would say is whether you are a UK graduate or a non-UK graduate, very few graduates go straight into a graduate job. People need time to get working experience of what a real office or a real working experience is like before, perhaps, they have the necessary skills and capacity to go into a graduate job. At the moment, students have four months whereby they have to not just find a graduate job, they have to find one that fulfils the salary threshold for Tier 2 and one where an employer has a licence. Four months to do all of that is not sufficient time at all. I would say the point of a post-study work visa is that it acts as a bridge or a transition between that Tier 4 and potentially Tier 2. The evidence again speaks for itself. If you look at the numbers, for those that transition from Tier 4 as international students into Tier 2, in the first year after the abolition of the post-study work route we are talking about 4,000-odd students who made that. That is less than 1.5% of the entire non-EU students that do that transition. With post-study work, with Tier 1, double those numbers were going into Tier 2.
Q71 Chair: The Higher Education Statistics Agency has shown that there are as many Scottish higher education institutions with international students. In fact, the number has increased since the closure of Tier 1. Is that the case at all? In the response, you mentioned Nigerian, Indian and Pakistani student numbers falling quite significantly, but the UK Government then turn around and tell us that this has been more than picked up by Chinese students who have come to study, not just in Scotland but throughout the rest of the United Kingdom.
Humza Yousaf: No, I would not accept that at all. The reason I would not accept it is the 1% increase that you talk about was on the back of a 1% decrease the year before. Effectively, you have a plateau, but on top of that I believe that our educational institutes, not just in Scotland but the entire United Kingdom, are absolutely world class. They are among the best of the best. Therefore, we should not be measuring ourselves as to whether we are just increasing or decreasing by a per cent here or there. We should be among the best in the world. If you look at the international comparators, our competitors, the United States had an increase last year of 10% of international students, Canada 11% and Australia 8%. Those are the western educational institutes, English speaking, who are our direct competitors and they are way above us. We are plateauing, whereas our competitors are increasing because they have more favourable post-study work visa routes.
Again, to highlight that figure, when we had the post-study working visa route, the increase was in and around the 1,500 mark a year. Now it is at 165 from this year to last, so I think it will only be a matter of time, I am afraid, until that trajectory goes into the negative.
Q72 Kirsty Blackman: Some of this first question you have answered in your opening statement, but if you want to add anything else then go ahead. Why do we need a new post-study work route and do these arguments apply particularly to Scotland?
Humza Yousaf: From the Scottish Government perspective, it is going to be no surprise to you whatsoever that I would argue for Scotland to have a competitive advantage to the others in the rest of the United Kingdom. It may be that the UK Government wish to reintroduce the post-study work visa across the United Kingdom to stop that from happening. I have no particular qualms if that was the case, but I think Scotland has been disproportionately disadvantaged by that. I say that for a number of reasons: first, because of our particular demographics. It is really important not just to think about the post-study work visa and what it could bring to Scotland right here and right now but also what it could bring to us for the future. We know that, for example, over the last 30 years Scotland’s population growth has been about 1.5% compared to 15% in England. On top of that, if we look to the next 25 years up until 2040, our projected fall in the working-age population is about 4% while those who are over the age of 65 will increase by 59%. Whether we like it or not, whether you categorise yourself as pro or anti-immigration is, frankly, completely irrelevant, immigration is needed for this country for future economic growth. We just simply do not have enough people, even if we upskilled every single one of them, to fill in some of those skill shortages that exist.
Then there are particular sectors in Scotland that Scotland relies on heavily that have skill shortages that are not being filled or are not being considered under the Migration Advisory Committee shortage occupation list. The IT sectors here in Scotland, financial sectors we know in Edinburgh are incredibly important, so particular sectors—some sectors within sectors—need international graduates because there are not enough Scottish-domiciled students who are filling those posts; for example actuarial software engineers who are very skilled, very technical, very niche and very important to Scotland and Edinburgh’s financial sector in particular. Up here in Aberdeen, of course, although the oil and gas industry has gone through and is going through an extremely difficult time, there is still the need for some niche engineers particularly that are not being filled by Scottish-domiciled students.
I think Scotland does need the reintroduction of the post-study work visa. It would certainly help our economic growth but it is also not just about the here and now. The important point is future demographics require us to have this.
Q73 Chair: We are going to go into some national policies and programmes later in the session, but we will have UK Ministers in front of this Committee in the next couple of weeks. We are pretty certain that they are going to turn around and tell us that a subnational immigration policy will not work because it will just be a matter of people coming to Scotland using this as a route to get into the rest of the United Kingdom. This was one of the things that came out of the evaluation of Fresh Talent—that so many students did eventually end up in the rest of the United Kingdom, although we were told by the Institute of Directors this only happened when Fresh Talent was subsumed into Tier 1. Have the UK Government not got some concerns if we were to embark on some sort of subnational immigration policy here in Scotland?
Humza Yousaf: I would be interested in the statistics and the numbers behind their concerns if they have any of those concerns. It is worth pointing out, Chair, that in the last 15 years Scotland has had a net migration from the rest of the United Kingdom. We have had more people coming to Scotland from the rest of the UK as opposed to leaving Scotland to go to the rest of the UK in the last 15 years. At the moment, that number sits at around about 9,000 in terms of net migration. This idea that there are more people from Scotland leaving to go to the rest of the United Kingdom is a fallacy. It does not exist and the statistics most certainly show otherwise.
In terms of the Fresh Talent visa that existed at the time, I do not think there was any substantial evidence at all that showed that those who came here, studied here, had a visa to work here, would then go down to England. I did not see those numbers and I have not seen the statistics that would show that that would be the case. I suppose even if you did not look at it from a statistical and evidential point of view, really just logically you would have to ask yourself why on earth would a student who was given a visa to study in Scotland, studied in Scotland, was given a visa to have two years, for talking’s sake, post-study work visa in Scotland and made to feel quite welcome here, want to go somewhere where they were not given those opportunities and, frankly, by a Government that were not wanting to welcome them there? I cannot see the logic in that either. If that comes back, if that was the argument from the UK Government, I would be very keen to see the evidential basis for it.
Q74 Kirsty Blackman: I was going to ask about the specific demographic issue. Do you think the UK Government’s policies on immigration are going to damage the Scottish economy? Do you think they are already damaging the Scottish economy?
Humza Yousaf: Again, it will not really surprise you to hear that I think that is the case. I think the more powerful testimony comes from the panellists that you had in the morning and in the earlier afternoon, from those organisations that are not even necessarily always sympathetic to the Scottish Government, the CBI, for example, in Scotland, who will tell you that immigration policy is damaging business not just in Scotland but across the United Kingdom. The FSB, Federation of Small Businesses, the IoD, the Institute of Directors, the STUC, Scottish Trade Unions Congress, many others across the board, are telling you that immigration is damaging. It is not just damaging the United Kingdom, it is also damaging the perception of the United Kingdom. I remember the first time I ever went to India as a Government Minister there was simply talk of a proposal for a visa bond. It never came to pass, thankfully, but there was just talk about it. Even from that talk, even from those whisperings and those leaks that were coming out from the Department at the time, every single question I was asked when I was in India, for the entire five-day trip that I was there, was all about visa bonds. Effectively, the perception was that the UK was closed to Indians. It is incredible to think that this country is going to be closed to a country that is going to be producing the most number of graduates in the world shortly. It does not help us at all.
I have no doubt that the immigration policies are damaging. Frankly speaking, I think it is fair to say the UK Government’s immigration policy is not based on common sense. It is not based on what is right for this country economically. I think it is based on an ideological drive that they have and that is their prerogative, but I do not think it—
Q75 Chair: Doesn’t the UK Government have a right to pursue their policies? They won a general election. This is a high priority for them. Last week we saw net migration figures of 336,000 and it was said that their main intention is to get the numbers down to the tens of thousands. Do they not have a right to ensure that these policies are pursued given that they have a mandate?
Humza Yousaf: I would not say the UK Government does not have a right. That is not the argument I am making. I am simply making the point, Chair, that I think it is nonsensical and I think it works against the interests of the United Kingdom. I was reading an article by James Dyson. I pulled it back out; I was reading it earlier this year. James Dyson, of course, is the well-known founder of Dyson, a hugely successful business company, leading entrepreneur, and he makes mention of the UK Government’s immigration rhetoric. In an article from 4 January of this year he says it is a short-term vote winner that will certainly lead to long-term economic decline. That is how he characterises Theresa May’s statement at the time on immigration. I think I would agree with James Dyson on that. It may be a vote winner in some parts, that may be true, but it certainly is a recipe for economic decline.
Q76 Chair: What would you say to UK Government Ministers then, that Scotland can do this distinctly, that we would not get in the way of what seems to be their long-term ambition and mission to drive down immigration numbers? Is there anything that you would be able to say to a Government Minister that would reassure her or him that what we are doing would not get in the way of what is one of their key priorities?
Humza Yousaf: The first thing I would say to them, Chair, is that I would ask them to talk to us about this issue. It would be quite helpful if they chose to do that as part of the Smith commission, to have meaningful dialogue, and that meaningful dialogue has not happened, not for want of trying. First of all, I would be quite keen that they spoke to us about this issue.
Secondly, I would say to them that it worked previously, and credit to Lord McConnell, at the time First Minister Jack McConnell, who pushed and pursued this issue and got a result whereby Scotland was able to work within the confines of a UK immigration system. In fact, it was so successful that it was subsumed into the UK and made into a UK-wide scheme. That showed the success of the scheme.
The third thing I would say is that the Scottish Government is willing to be as flexible and as open as we can with the UK Government. We realise that they probably will not accept all of our recommendations or the recommendations of the current cross-party and cross-sectoral group that we have, but we are willing to enter into the discussions with the spirit of compromise. If they think that it has to be restricted by a certain number, there has to be caps on how many visas they can release, again it would not be our preference but we are happy to discuss that within the confines of an immigration system that is suitable to them. I think restricting student numbers to reduce immigration numbers is the wrong way to go.
Q77 Margaret Ferrier: I think we are getting to the point where we realise that the abolition of the post-study work visa is significantly reducing income for Scottish universities as well. If we look at the current salary, which you have mentioned, that is taken in a UK-wide context rather than looking from a Scottish perspective. Surely, at the end of the day, we want a return on the investment from the students that come and study here. The current points-based visa system allows international students to transfer to the work-based visas primarily through Tier 2. Why do you believe the framework is not adequate for Scotland?
Humza Yousaf: I think it is an important question. Tier 2 is seen as too restrictive. It is seen as too restrictive for a few reasons. First of all, I would say your point and the point that is made by others is absolutely correct about salary thresholds. An average student graduates from the university, from an undergraduate degree anyway, at the age of anywhere between 20 and 22. If we look at statistics produced by the ONS, the Office for National Statistics, the average salary for a 21 year-old in Scotland is about £14,500; for a 21 year-old it is £16,500 and for a 22 year-old it is £19,000. All of those are below the current threshold, which is I think around the £20,800 mark. Salary thresholds are an issue and a problem.
The second reason is that the sponsorship that is needed by employers is often seen as too restrictive and I think you probably would have heard that in your last session, particularly restrictive for small and medium-sized enterprises who are just put off. Part of the working of the Post Study Work Working Group—that is a mouthful—was to put out a consultation among businesses. They got about 250-plus responses and it was obvious from the responses that we got that businesses would be less likely to enter into any type of post-study work or working contract if they had to negotiate a sponsorship from the Home Office because they just found it too difficult. The perception was that it was too difficult. I think Tier 2 is too restrictive and, again, the numbers speak for themselves. The numbers and the statistics, if you look at them, the transition from Tier 4 to Tier 2 numbers are only half of those that transferred when we had post-study work as Tier 1 to Tier 2. Clearly, if it is not the reality it at least is the perception that it is too restrictive.
Q78 Margaret Ferrier: Just another question. One of the criticisms that has been made about transferring is the shortage of time. We heard this morning that this 16-week period is really too short. Is there anything that the Scottish universities, colleges or the Government could do to support international students graduating from Scottish education institutions to transfer to this Tier 2?
Humza Yousaf: I am always open to explore what more we can do and how we can work within the current system to support graduates, both international and others, particularly in terms of transferring into Tier 2 for non-EU international students. I am happy to explore what more we can do. It is not something that has been brought up as an issue for the Scottish Government. Largely the focus has been, of course, on the UK Government. I would very much welcome a reform of Tier 2, even if there was not a reintroduction of the post-study work visa. I am still hopeful that there will be, but if there was not I would still be very open and very welcoming of a reform of Tier 2. I think that four-month time period is simply not adequate, not enough.
What I would also say is there should be a sub-tier or there should be some reform within Tier 2 so that it is not just graduate-level jobs. There has to be an understanding that international students can sometimes use non-graduate level jobs as a transition into graduate-level jobs, in the same way that Scottish graduates do not automatically go into a graduate position; in fact very few do. Those that do are usually the lucky ones. Most people will have a non-graduate level job that will help as an entry to get into a graduate job.
Q79 Chair: I am interested in your views on the reform of Tier 2. Do you think it is reformable to be in a position where it can assist the opportunities for international students? You have mentioned a couple of examples there. Could you think of any more that may be able to be done without going to the business—some would even say trouble—of having a new Tier 1 established again?
Humza Yousaf: I think reforming the sponsorship, in fact even abolition of the sponsorship perhaps, is something that they should consider. If not abolition of the sponsorship for employers, where I understand they might want some more checks and balances, then what checks and balances would be less restrictive on businesses is probably something that is worth looking at. Looking at the cap on Tier 2 visas is always worth exploring, and then seeing and taking on board what I have already said about graduate jobs and whether there need to be graduate jobs, and also exploring whether or not the salary threshold can change according to regional variances, not just in Scotland. Obviously, I would be interested in that, but I imagine there will be regional variances in the north of England, for example, compared to the south-east of England. Those are maybe three or four suggestions that they could look at, but the insinuation that Tier 2 cannot be reformed—I think it could be reformed but it is difficult.
Q80 Chair: I think what surprised this Committee, and it certainly surprised me, when we took evidence from universities, which was then confirmed by businesses, is just how few SMEs in Scotland are taking part in Tier 2. I cannot remember the number; we have it on record. I think it is something that we will want to explore. Does this suggest to you, therefore, that Tier 2 is not working for this purpose in securing the services of international students?
Humza Yousaf: No, I think it is clear Tier 2 is not working for international students. As a route here into effective employment, Tier 2 is simply not effective at all for international students. Again, the numbers speak for themselves. If I do my maths, 1.3% of international students are going from Tier 4 to Tier 2 and that shows the inadequacy of the current system.
Q81 Chair: That is surprising given that we also heard evidence this morning that we have 9% of all international students throughout the United Kingdom with 8.7% of the population but we are having such little success in being able to hold on and retain that talent, which obviously has an investment in Scotland. Is there anything else that you could suggest that we could do more to get these numbers up beyond the establishment of a new Tier 1 entry?
Humza Yousaf: Chairman, we will always explore what more we can do from a Scottish Government perspective and there is more that I am sure we can do in marketing our universities in key international markets. What I would say is it is worth looking at some of the international student surveys that exist. I cannot quite remember the name of the survey— it might be the Hobsons study—but it showed that for 25% of international students having a post-study working route was the decisive factor on whether they chose a country or not. For most students, I imagine, the cost of fees will be one of the most important determinants.
We heard an interesting anecdote or personal story from an individual from the last batch of post-study work visa graduates in Scotland. He works for an electronics company in Coatbridge, Retronix. He mentioned that when he was first thinking about where to study in the world to do his master’s, he was sitting in a café in Mumbai with two of his friends. When one of the friends asked, “Where would you study?” the other two friends in chorus said, “The UK”. Where else would they think about studying? That was four or five years ago. He said he now goes back to India and has the same conversation and everybody talks about Canada or the United States and that the UK is way down the list.
There are things that we can do, Chair, but there is no doubt in my mind that having a post-study work route would greatly enhance the UK’s reputation internationally and the allure of the UK for students to come here and to study.
Q82 Mr Chope: Minister, you have been talking about being against artificial restrictions on student numbers, but surely that is exactly what you do in Scotland in respect of the number of school leavers who are able to become undergraduates at Scottish universities. Why don’t you remove that cap and thereby enable more home-grown talent to be developed in the excellent universities that you have in Scotland? We know that in the last 10 years there has been a reduction of some 8% in the number of undergraduates coming to Scottish universities from the United Kingdom, including from Scotland. That equates to about 13,000 a year. Why aren’t you doing something to address that problem?
Humza Yousaf: The question is a good one, but I would say a couple of things. First of all, I have not suggested the UK Government necessarily has to lift caps. I have even gone to the extent of saying that if the UK Government thought that a post-study work visa can be done within a quota system then that is something that we would explore. There is understanding here that if we have to work within a quota system then we will work within a quota system. I think it would be incorrect to say that I have suggested that there is a lifting of all caps.
To your more substantive point, I would say there are a few points. First of all, from the Scottish Government’s perspective, as you will probably be aware, we believe that education should be based on the ability to learn, not the ability to pay, for Scottish students. In fact, we would like that to cover everybody if we possibly could but because of the situation with fees in England that is simply not possible. Therefore, lifting a cap and having an unlimited number of Scottish students is something that obviously we could not fund. It is a principle in terms of free education that we are unwilling to compromise on. That would be the first thing.
The second thing is that when it comes to admissions and admission numbers, it is worth pointing out that the figures for the first year when the cap was trebled to £9,000 in fees in England showed a decrease in English-based students. Those domiciled in England applying for English universities fell by 12%, whereas while we have a cap, free education, in the same year admissions in Scotland went up by 2%. It is worth knowing that figure.
The other thing I would say is that this is not just about filling an economic gap, although the economic potential of international students is important, is not small. It is about £400 million in fees. I think that is important. This is also about what else international students can bring in terms of the cultural experience and them being ambassadors for Scotland should they go to work elsewhere, but also about international businesses that export reaching new markets. The reason the company in the case example I mentioned earlier on, Retronix, hired an Indian graduate was because they wanted to break into the Indian market. They thought it would be easier to do that with an Indian graduate.
The fourth point I would make, a very simple point, is a demographic point. There is no way that even if we had an unlimited amount of Scots, those domiciled in Scotland coming to Scottish universities, we would be able to fill the skills gap, not only the skills gap but the demographic challenge that we have. We know that Scotland has a population that is not growing at the same rate as the rest of the United Kingdom, historically has been a falling, declining population, and it is worth saying that 90% of the increase that we are projected to have in the next 25 years is going to come from immigration. My point is a very simple one. If it is going to come from immigration, then it should be highly skilled, highly educated immigrants, as opposed to maybe those who are lacking education and lacking skills. Having Scottish students and just lifting a cap in Scotland simply would not fill the skills gap that we have, nor that we will have in the future because of our demographic challenges.
Q83 Mr Chope: It might not fill it completely but it would certainly help, wouldn’t it? Surely it would help and if you are trying to persuade the United Kingdom Government to change its immigration policy, why don’t you as a first step try to do something to help yourselves by maximising the number of home-grown people with talent and potential, allowing them to come and benefit from your own Scottish higher education system?
Humza Yousaf: I think the way that you are characterising the Scottish system is completely unrealistic. We cannot force Scottish students to take particular degree courses, to take particular skill sets if skills gaps exist. For example, in engineering, where not enough Scottish students are going into engineering despite engineering companies going into primary schools and high schools, we simply cannot force Scottish students to take up engineering. If that skills gap exists, then it has to be filled by international students. I think the characterisation that it would be simple to lift the cap and, therefore, all skills gaps would be filled is incorrect.
The second thing I would say is that we are doing a lot as the Scottish Government—Skills Development Scotland, through our modern apprenticeships and through other means and methods—to fill that skills gap where it exists. It is worth noting that Scotland has the highest youth employment than any region in the rest of the United Kingdom, so we are doing as much as we can. More can be done, of course, and I will always accept that. In any discussions that we have had on this over the years, which have been limited, in fairness, the UK Government have never said to me that the problem is that you should just be able to fill these skills gaps with Scottish graduates, never once. I think they are right because it would be a preposterous suggestion if they were to say that, for a number of reasons that I have already highlighted.
Q84 Mr Chope: You say you have had these discussions arising from what was said by the Smith commission but they have not reached any conclusions. What is the nature of those discussions you have been having with UK Ministers?
Humza Yousaf: What I said was it was very limited. I have written to James Brokenshire, Minister for Immigration, on this and he has not agreed to meet on this specific issue. The spirit of the Smith commission was such that there was a page at the back that was issues of further consideration, and post-study work came into the issues of further consideration. There has not been any really substantial dialogue, on this. The Home Secretary, Theresa May, has met with Michael Matheson, the Justice Minister, on a whole variety of justice issues. This issue was spoken about very briefly, but it was not a substantial discussion other than to be told that it was unlikely that the UK Government were minded to reintroduce the post-study working visa route. I watched with some trepidation Theresa May’s speech to the Conservative Party conference. I think that did not give a hint that they were interested in reintroducing the post-study working visa route.
I should stress it is a cross-party group that we have on the reintroduction of the post-study working visa. What it has done is written to Theresa May and also now had a response from the Deputy First Minister, John Swinney, to ask them both, the Scottish Government and the UK Government, to hold off from making any final decision on the post-study work visa until that group puts some meat on the bones, comes up with a definitive proposal for what a post-study work visa might look like.
The discussions thus far have been lacking, not for want of trying from the Scottish Government, but I am hopeful that if the group produces substantial proposals then they will formulate a basis and a foundation to further discussions.
Q85 Mr Chope: Will that take into account the fact that last time the UK Border Agency said that of those people who came to Scotland under special arrangements more than 50% of them left Scotland within a year and as few as 25% actually stayed on to achieve what you want to be achieved as a result of a post-study visa system?
Humza Yousaf: I would be fascinated to see the figures in and around that, and thank you for the source of them. I will go back and explore them, because from my own statistics that I have read, as I have already mentioned, over the last 15 years there has been a net migration to Scotland. More people have come to Scotland from the rest of the UK than have left. To make an assumption that because people come to Scotland it must be because there is a magnetic pull to London or to the rest of the United Kingdom I think is not based on any statistics that I have seen, but I would be happy to explore any other figures that show otherwise.
What I would say is, if that was the concern, I am very open to discussions with the UK Government about how this is done through sponsorship. If they need regional sponsorships—therefore, an international graduate would only be sponsored to work in Scotland and that was enforced through that sponsorship—if that is reopened that would not be my preference but if that was their preference then I would be open to at least exploring that and discussing that. My point very much is that there is clearly a need for a post-study work visa. You have heard it from educational institutes. You have heard it from businesses. You have heard it from cross-parties, including the Conservatives, Labour, Liberal Democrats, the Greens, independents and, of course, the Scottish National Party, all of them in support of this. If they just come to the table and talk to us, I am sure we can find some sort of compromise, some sort of way and some sort of solution that keeps them, the UK Government, happy and keeps all those sectors in Scotland that support it happy as well.
Q86 Mr Chope: Finally, you say let’s come to the table. Surely it would be better now, having the previous history you have just explained, if you, the Scottish Government, came forward with what you thought would be the best proposal and then put that to the UK Government. Until you do that, is it not reasonable to accept that the UK Government is saying, “Show us what you want us to consider”? How long will it be, do you think, before you can come forward with such a specific proposal?
Humza Yousaf: I think it is a good question. What I would say is there is already a report. There is a 36-page report that exists called, “The Post Study Work Working Group Report to Scottish Ministers”. That was produced by a whole variety of stakeholders and, again, some of them you have had in your panel already: the Institute of Directors, the STUC, the FSB were copied into the notes of the meeting; the SCDI, OPITO who deal with the oil and gas industry, the trade unions, Universities Scotland, Colleges Scotland. They produced quite a substantial report, which in fairness gave the overarching principles in support of a post-study working visa.
What we have done now is produced a cross-party group, which includes some of those members that I have already mentioned plus political representatives from each of the parties, including the education spokesperson for the Conservatives, the European external affairs spokesperson for Labour, the education spokesperson for the Liberal Democrats, a spokesperson from the Greens, as well as myself as the chair from the Scottish Government. That will produce a report. The aim is by March next year, but I think that does not stop us from having some discussions on the basis of the first report. It is useful to hear from the UK Government what they feel are the limitations; where are their red lines. We do not need to make this public. We can have it as a very confidential discussion with the UK Government about what they feel are their red lines, what they feel they can compromise on, what they feel they cannot compromise on. From a Scottish Government perspective, I can give an absolute commitment that we are open to exploring whatever proposals they come forward with, but we need at least a hint or a detection that they are interested in exploring this issue as opposed to just putting up a brick wall against it.
Q87 Chair: Can I explore a little bit more about the Smith commission? Obviously, this was something that came up within the Smith commission proposals and I do not think it was one that made it on to the Scotland Bill. We have not had an opportunity, through the progress of the Scotland Bill, to debate this further to see where it could lead. I was surprised at a remark that was made in a Westminster Hall debate recently by our Minister, Karen Bradley, who said that the current provisions available to graduates of Scottish universities are precisely the type referred to in the report of the Smith commission. That seems to suggest to me that the UK Government have concluded this as an issue. I do not know if that was your view of how this was communicated to you. Where are we now in terms of a discussion or a debate about what was debated in the Smith commission and the prospect of further devolution on this power?
Humza Yousaf: It was an issue that was of priority for the Scottish Government in the Smith commission negotiations. I cannot comment, of course, for others around the Smith commission table during those negotiations, but certainly it has been a priority because of the cross-sectoral support and, as I say, the cross-party support. The Smith commission left it open for both the Scottish Government and the UK Government to come to some sort of discussion and negotiation around this and that has not happened. On the rhetoric around immigration particularly, we have to be aware that there was a general election earlier this year and rhetoric in any election, be it Scottish or general or local election, often becomes less open to compromise and negotiation in the run-up to that election. We understood that context, but I was hoping that post the election there would be a little bit more in terms of negotiation, compromise, discussion, coming to the table. I am sorry to say that that just has not been the case.
The suggestion that the current tiers and the routes that exist are acceptable or are conducive and helping to plug that gap are laughable. If we take the highly skilled graduates, for which there are 1,900 visas available under Tier 1, in the first year that was available only 119 visas were taken. We have already spoken about some of the challenges around Tier 2. Tier 5 there is a potential, but only 204 graduates transitioned from Tier 4 to Tier 5. The evidence there that the current tiers help to plug the gap that was left with the abolition of Tier 1 is not correct, and I am disappointed at the lack of consultation and discussion. I am hoping that the letter that was sent from the post-study work cross-party group will help to ensure that the UK Government does not come to a definitive view on this until we have a proposal, as was suggested by the member, but it would be helpful if they entered discussions with us now in the spirit of Smith, which has not happened to date.
Q88 Chair: Can I ask you a little bit about all the various groups? I know that you are chairing the cross-party post-study work visa group and you previously chaired the committee that reported in March. You are referring to the all-party group and a lot of the evidence that we have secured here refers very positively to these types of groups. Could you talk a little bit more about the various work of these groups? Given that immigration is reserved to Westminster, what opportunities and possibilities do you have? What do you hope to achieve with these particular groups?
Humza Yousaf: Chair, I would note also that the Scottish Government found the APPG report on the post-study work visa incredibly helpful. It was referred to many times during the parliamentary debate by all sides across the Chamber and how helpful that all-party parliamentary group report was into the post-study work visa. Indeed, I have met a variety of people who are members who sit on that all-party group and they have been very helpful in exploring how we can work together. I think that is a positive.
In terms of where we go from now, this is a very methodical and systematic process that we have followed. I am not of the opinion that we could have gone to the UK Government without any proposals whatsoever and expected a discussion to foment from there. That is why even before the Scottish independence referendum we had already started work on the overarching principles. I would say even before the overarching principles, the whole point of the original steering group on the post-study work visa was to examine whether or not there was a genuine interest in the reintroduction of it. We had heard it anecdotally but we wanted to speak to educational institutes, businesses and others to find out exactly if there was any interest in reintroducing the post-study work visa, which clearly there was from that.
The next step was to have a parliamentary debate on that report and that took place. There was cross-party unanimity and agreement that the reintroduction of the post-study work visa would be desirable. The next step that we are currently engaged in, as I have already said and you have alluded to, Chair, is the cross-party group, which is effectively there to put the meat on the bones of our proposal. The overarching principles exist, but what qualification level should it be; for how long should the post-study work visa be; should it address particular skill sectors; how do we address some of the concerns the UK Government might have about further migration? All of those real key issues need to be addressed and they are being addressed.
That is the systematic order that we are following. We are hoping that through that will come a proposal in March 2016 that will give a definitive proposal. What would be helpful would be to enter into discussions with the UK Government about where their red lines are, where they want to compromise, where they are willing to compromise, or if there is any willingness to compromise or whether this is a non-starter, which would be, of course, against the spirit of Smith.
Q89 Chair: We have heard from you today, and also from our previous witnesses, that there does seem to be an overwhelming consensus in Scotland that something should be done and we should be moving towards securing some sort of post-study work scheme. There must be people who disagree with that in Scotland. I know we have been trying to secure evidence from those who may have an issue or difficulty with that, but you will appreciate that this is not something that is universally supported in Scotland. Could you talk a little bit about the debate as you find it just now and where some of the difficulties and issues may be in being able to try to progress this as a debate and an argument essentially from Scotland?
Humza Yousaf: In terms of Scottish attitudes it is worth looking at the Scottish Social Attitudes survey and other studies, even from the Oxford Migration Observatory and others, that suggest that across the United Kingdom, not just in Scotland, once those figures are broken down and looked at and drilled down into more detail, even those who wish to see reduced immigration do not wish to see a reduction in numbers of international students. They understand the value that international students bring; many who were students themselves will have longstanding friendships and memories of international students from when they were in university or in college. I accept, of course, that people have obviously differing views on immigration in Scotland. The introduction of the post-study work visa does have cross-sectoral support but I am sure there will be plenty of people, of individuals, who are opposed to it because they see it simply allowing increased immigration to the country and they are opposed to that for ideological reasons. That is fine; it is their right to be that. I come from a different perspective, but they have that right. Even among them, the studies show that international students are viewed in a different way than immigration at large.
I would say to people that what we are talking about here is highly skilled, highly educated graduates and international students and that can only be a good thing. I would also say to people that they have to look at Scotland’s demographic challenges. This is really important. Often politicians are accused of being too short-sighted and I think with 25-year projections that show a worrying demographic in terms of our working age population, any increase in population for Scotland is largely down to immigration, not down to the fact that births are outweighing deaths. While that is happening now, that is not the reason. When I was growing up, I remember a programme on TV we used to watch all the time called “2point4 Children”. Interestingly, someone made the point that if that sitcom was on today it would have to be rebranded “1point7 Children” because of what we have. We have a real demographic challenge in Scotland and the United Kingdom and highly skilled immigration is important to try to fill that.
Q90 Chris Law: I think a lot of the questions I was going to ask have already been answered so I will not repeat them. What has been interesting today, and also looking at the evidence that has already been submitted, is the level of consensus for the desire to have reintroduction of the post-study work visa. I was just looking at the report that was published in March by your own committee where it said that 90% of the respondents to the survey were in favour of reintroducing the post-work visa; 100% were education provider respondents and 86%, if my eyes are correct, were business respondents. What also struck me was you said that there is cross-party support in the group. I suppose it is a political question but nevertheless it needs to be asked. Is that all the parties and, if that is the case, what conversations may or may not have been had by Scottish Conservatives with the rest of the party in the UK?
Humza Yousaf: I would just reiterate there is cross-sectoral support. I have not come across a sector that is opposed to the reintroduction. There may be some that are neutral because it does not affect them, but I have certainly not come across a sector yet that is opposed to the reintroduction of the post-study work visa. I would say I genuinely do not know another issue in the entire country that has as much consensus as a post-study work visa, both sectorally and across the parties.
In terms of political parties, I am not party to what discussions the Conservatives have had other than what has been said in open debate by Liz Smith, the Conservative’s education spokesperson, in the Scottish Parliament and Scottish Conservatives. Her take on this has been that during the last coalition Government certainly, there was a difference between the attitudes of her colleagues who were in the Home Office compared to her colleagues who were in BIS or in the Education Department. Having Liz Smith’s perspective and the Conservatives’ perspective on the cross-party group is immensely helpful because they have access and discussions at a level that sometimes the Scottish Government is just not able to have.
That does show the strength of the argument that we have here. I do not know, as I say, of any other issue that unites all the political parties—it is, in fairness, politically contentious, I understand that, because of the immigration debate—and has as much unity here as this one. I am hopeful that gives a strength to any report that we produce come March next year.
Q91 Kirsty Blackman: You suggested the report next year will put flesh on the bones of the previous report that was published. When that report is published, do you expect the Scottish Government to adopt that as their preferred way forward or is it just going to be a report that will influence their thinking?
Humza Yousaf: I am hesitant and reticent to pre-judge what comes out of that report, as the person who is chairing the cross-party group that is looking into it. What I would perhaps guess or make a conjecture on is that should that report be produced in March, we are not far off, of course, the Scottish elections that will take place in May 2016. The point of producing that report at the time of the dissolution of the Parliament is that whatever Government comes forward as the result of elections in May 2016 hopefully will take that report forward because it has that cross-party consensus. It does not matter what the make-up of the next Scottish Government will be; whoever it is should find common cause, consensus and agreement with our report, of course subject to tweaks and so on and so forth. There may be caveats but generally they should be accepting of it because they all have political representatives on that.
Of course it is too early for what political parties choose to do in terms of manifestos but I would be hopeful that with that report being produced, manifestos may well indicate support for a post-study work visa. Again, it is up to individual political parties to make that judgment.
Q92 Kirsty Blackman: I have a technical question on the outcome of the previous report. It mentioned that post-study work could be open to self-employment. As somebody who represents Aberdeen, the oil industry has a huge number of contractors and that is a very important sector for us in Aberdeen. Is that something that you think will be taken forward and discussed in the next phase of this report?
Humza Yousaf: Yes, it is certainly an issue that is being looked at. I have a lot of sympathy for that view. The entrepreneurial spirit of the immigrants I know is very high and their entrepreneurial acumen is very high as well. There is a culture of self-start-up and self-employment among a number of the graduates who come, particularly from the Indian subcontinent but also from other countries and continents as well. It is certainly something we will explore. What view we come to, of course, again, is something that I could not and would not pre-judge.
Q93 Mr Chope: If we were to get to the situation of having a special Scottish post-study work scheme, how do you think it would work in practice if you were going to retain and ensure that you retained the people on that scheme within Scotland and did not allow them to move anywhere else in the United Kingdom? How is that going to work?
Humza Yousaf: The first thing to say is that it worked previously. We had the Fresh Talent scheme and it worked so well that, of course, the scheme was then adopted across the United Kingdom. If the case was that graduates were just coming to Scotland and then going to the rest of the United Kingdom, there would be no need to roll the scheme across the United Kingdom previously. It was because it was seen by the then UK Government as being very successful. The first point is that it has worked in the past. It is not beyond our capability to devise a system in conjunction with the UK Government, addressing their concerns, some of which I think are legitimate, some perhaps not so. We can devise a system between us that would work.
Australia, for example, has a system of regional sponsorship. It works across various regions across Australia. If they wanted to look at a system similar to that, then we could explore that. It could be done that if somebody is given a post-study work visa it is for a particular region of the United Kingdom, in this case Scotland. Therefore, if they tried to get a job elsewhere it simply would not work because they would not have the sponsorship. They would not have the visa to work and they would not have the appropriate documents. If any business then took them on, they would be liable to the full enforcement of the UK Border Force. These matters are not taken lightly by the Border Force at all so if any business chose to do that, they would be putting themselves up to what would be a huge risk and liability to their own business.
It has worked before. I do not think it is beyond our capability to make it work again. I am entering this with a very open mind with the UK Government. If they do have concerns I would say, “Speak to us about those concerns. Let us have a substantial discussion about those concerns. Let us do that confidentially, let us do that privately, but let us at least get sitting around a table where we can have that discussion so we can better understand what your legitimate concerns are. If you do not have legitimate concerns and the abolition of this route is being used, as some suspect, as simply a blunt instrument to cut immigration numbers, then clearly it is not working, first of all, and secondly it is just not the right way to do it. If you do want to cut immigration it is your prerogative, as the UK Government, to do that. I disagree with it but if the prerogative of the UK Government is to cut immigration numbers, cutting the highly skilled, highly educated graduates is not the way to do it.”
Q94 Mr Chope: Is it not a bit concerning that you are not accepting the premise that underlay the Fresh Talent scheme? That was that after one year half the people on that scheme had already left Scotland and another quarter had gone into low-skilled jobs for which they were overqualified, thereby depriving other people in Scotland of those job opportunities. That is the factual policy background. It is very disappointing that you do not seem to accept that.
Humza Yousaf: I will have a look at the figures that you have suggested and that you have mentioned. I have not seen those figures and I will have a look at them, most certainly, after this. On the first point—on the latter point, even—I am happy to work with the UK Government on whatever concerns they have, to devise a system that is acceptable to them and is acceptable to us. That will include compromise on our behalf as much as it will entail compromise on behalf of the UK Government. If there is a restriction in the number of visas, if that is what concerns them, I am sure it is not beyond our capability between us, the Scottish Government and the UK Government, to devise a system that is acceptable to both.
It is not that I dismiss their premise, I simply do not know what their concerns legitimately are because they have not come to the table to tell me what those concerns are. All I have been told thus far in letters and correspondence is that the tiers that exist currently are more than adequate to attract international students. I do not think that is the case, you heard from educational institutes that that is not the case, and therefore entering into a discussion would be helpful. I do not dismiss their concerns. As I say, I have a difference of opinion but I do not dismiss them. I am happy to listen to them. I am happy to be as open-minded as possible to that.
Q95 Chair: Minister, have you had an opportunity to have a look at other international examples of subnational policy? I know the Australian example is always mentioned, but Canada seems to be particularly interesting to this Committee, particularly the Canadian provincial nominee scheme, which seems to suggest that there could be a finessing of immigration policy across the different federal states within Canada. Then we get to what happens in Quebec, which is the full devolution of immigration within a nation state. I do not know if you have had an opportunity to have a look at these but have any of these schemes attracted your attention? Do they provide any useful models for what could be achieved in Scotland?
Humza Yousaf: Chair, the ones that you have mentioned are the ones that we have explored already and that we will continue to explore. The Australian and Canadian systems are not perfect and have their own issues. One size does not fit all and we cannot just transplant one system onto the next. With all those caveats, they are still systems that I think could be helpful in the Scottish context. You mentioned the Canadian system. It certainly is one that we have explored. In fact, it is mentioned in the post-study working group report to the Scottish Ministers and we will continue to explore it.
What is obvious is that we are losing out to those international competitors. I mentioned some of the statistics already, but Canada has seen an 11% increase in international students going there, whereas in Scotland we have had a 1% increase and even that is on a downward trajectory as opposed to an upward trajectory. International models are really important. We should always judge ourselves against those standards. Those are our competitors. We have world-class universities in Scotland and the United Kingdom and we should be competing at the same level.
Q96 Chair: A proposal that came to us from Edinburgh University—we have this in the written evidence—offered a solution whereby universities or higher education institutions could offer the sponsorship to provide for that period of post-study work visa. Again, is that something that you have looked at in the various groups that you chair? Is the Scottish Government interested in such a scheme?
Humza Yousaf: We had a meeting recently, just a couple of weeks ago, with stakeholders where we spent the best part of a morning and an afternoon, quite a number of hours, thrashing through some of what are the big issues. We had a number of experts from academia, the business sector, educational institutes of course, immigration lawyers and experts, and we really thrashed through some of these issues. There was a variety of suggestions that were made.
One was the sponsorship from educational institutes, and that is why some people have suggested that if you were to reintroduce the post-study work visa you could make it perhaps a sub-tier of Tier 4. That way, international students coming from a sponsored educational institute would already have shown themselves to have good conduct and behaviour and a track record of aligning themselves to immigration rules. That is one suggestion. Others have suggested even more radical suggestions, such as that the Scottish Government could perhaps become a sponsor and be liable. I have to say I am not particularly in favour of that but it is certainly something that has been raised. We are very open-minded. We are just trying to reach a view that is acceptable to everybody.
Q97 Chair: It would be useful for this Committee if there are further proposals that you have in mind when it comes to this. I know Christopher Chope’s concern is a real one and if this Committee makes a series of recommendations to the UK Government only to be told that they will not work in practice—the other issue that was raised with us is the new Revenue Scotland with a Scottish income tax, which would be a defining characteristic where somebody is normally domiciled in Scotland. Is it your view that there is a way we could make this work, whether that is a full devolution of immigration within the United Kingdom or a tweaking of the points-based system that would allow us to pursue our objective with what seems like a consensus? You are right, we are finding it difficult to find any voices that are opposed to trying to recreate this. Is there more work that you can do to satisfy some of these concerns from the UK Government and things that we can look at, including the possibility of using a new Revenue Scotland as a basis for this?
Humza Yousaf: I have not explored the Revenue Scotland point and I think it is worthwhile myself and my officials doing that. It is a good point. Chair. It is no surprise to anybody in this Committee that I would like as much devolution of power to Scotland as possible, but I am realistic and pragmatic and I do not for a minute think that the UK Government is in a position or has a desire to devolve immigration powers to Scotland. I will accept that that is their decision to make. What I would say—I hope I have emphasised this and I will reemphasise it—is that I am very open to listening to what the UK Government’s concerns are but the first step is for them to come to the table on that and to have some of those discussions.
If their concern is, as a member has already mentioned, that international graduates are going to go from Scotland to the rest of the UK, let us find a way of getting around that. If the concern is about international graduates not going into graduate jobs but going into low-skilled jobs, let us discuss that. I do not think that is necessarily a problem, actually. There is a transition from low-skilled work into graduate-level jobs. We have seen this time and time again when we had the Fresh Talent visa as being a route to gain meaningful employment.
Whatever concerns they do have, I am very open to trying to address those concerns within the confines of the current constitutional set-up. This is not a ploy to have full devolution of immigration. I do not think that is going to happen and it certainly has not been the suggestion of the previous working group looking at this issue.
Q98 Chris Law: I was going to ask about what sense of urgency the working group has with regards to getting to this change, the post-study work visa. The reason I ask that is Alan Mackay from Edinburgh University today talked about the current global boom in international students looking for places. In fact, he said over the next 10 years it will move from 4.5 million to 9 million, which will be a doubling, and that the UK current policy is like a train that does not stop to pick up these international students. What sense of urgency and how high a priority is it to get this in front of the UK Government?
Humza Yousaf: It is an issue that we need to get round, we need to get to the bottom of and we need to find a solution to as soon as possible. In fact, we should have done it yesterday as opposed to what we are going to come to tomorrow. Your previous panellists and previous members have given evidence that stressed that urgency and I would stress it as well.
We are living in a fast-moving, globalised world where the two largest countries in the world combined, China and India, are producing almost half of the world’s entire graduate population. Almost half of all the graduates in the world are coming from two countries. They do not have enough skilled jobs. Although they are growing at a pace, they do not have enough graduate jobs for these individuals. Many of these international students wish to come to the United Kingdom. The United Kingdom is still, among many, the preferred choice but what is putting them off are the unwelcome noises coming from the UK that graduates are not welcome here. We are missing out.
The real concern I have is also looking to our future demographics. We are struggling as things stand now. There are things we can do to try to address that and I am always happy to explore that, but looking towards our future, particularly the next 25 years, the immigration policies we have now are completely unsustainable for future economic growth. They are actually unsustainable for economic stagnation even. If that was what your aim was, the current immigration policies that we have do not even allow for stagnation. It will deeply damage us. This is a point that is not just made from the Scottish Government but, as I say, from bodies like the CBI, the FSB and many others as well.
Q99 Chair: Thank you. We are very grateful. We have taken 10 minutes extra of your time but that was really helpful and useful to this Committee. I do not know if there is anything that you want to add or whether you have covered all the points that you wanted to raise.
Humza Yousaf: No, I am fine, thank you.
Chair: Again, if there is anything that you have heard around this Committee that would help us with our report, please give us any further submissions from the Scottish Government. We would always be interested in hearing them. Thank you very much for your attendance today. It has been much appreciated.