How will capping student visas affect the economy?

Published: 9th Jul 2012

Immigration is inevitably a contentious issue, both in terms of fact-checking and policy-making. Full Fact has had to look at several immigration-related claims, and has found that publicly-available data on the topic sometimes leaves much to be desired.

Last weekend's Sunday Times contained a claim that changes to the student visa system will cost the economy £2.6 billion; the article was written by Conservative MP Nadhim Zahawi and Labour MP Paul Blomfield. The claim was subsequently picked up in the Daily Telegraph yesterday morning

We were able to trace this figure back to an impact assessment submitted by the UK Border Agency (UKBA) — which is part of the Home Office — in 2011.

The impact assessment gives a best-case figure of £1.4 billion and a worst-case figure of £3.6 billion costs over four years. The best estimate is £2.4 billion - taken from £3.5 billion in costs and £1.1 billion in benefits.

That this is an estimate is worth emphasising. For instance, the biggest 'benefits' worth £750 million between them are indirect social benefits on health and education, which are obviously difficult to quantify.

While the Sunday Times and Daily Telegraph pieces quoted this best estimate as being £2.6 billion, Paul Blomfield MP's office was able to confirm to us that this was a simple mistake, and the Daily Telegraph's journalist let us know that he'd picked the figure up from the Sunday Times.

Anyone using the figure anyway should do so with some caution. The impact assessment makes it clear that a multitude of factors have gone into reaching the rough area in which the final, real figure will probably fall.

As such, it should be remembered that while there's no particular reason to cast doubt on the £2.4 billion figure from the evidence we have in front of us, there's a risk that the final cost will actually be different from this estimate by quite some distance.


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