Don’t panic! Yet…

Just a very quick post to say, that I do want the pace of spending reductions to be slower, but more important is a growth strategy, and not just by making the labour market more flexible (traditional response).

As for the GDP figures released last week, I’ve seen many figures in industry and government stats, change very quickly. I don’t think we should panic, but we should be prepared to change path (obviously politically the Chancellor will never say that as it gives the opposition a field day).

As I mentioned in a recent job interview with an economist – there’s always choice, it’s how you’ve decided to set the parameters that define your choice.  He agreed, not sure whether I’ll get the job though!

When political ideology trumps economic sense

Oh dear the Tory economic policies are coming under scrutiny again – I know the Liberal Democrats are part of the Government, but let’s face it, they’re running the economic show.

Anyway, Richard Lambert, outgoing Director General of the CBI, has already raised the immigration cap being introduced, as bad for business, and is a view the Liberal Democrats support. Now as part of the “clampdown” on immigration, Post Study Work Visas (PSW), are being scrapped. PSWs allow foreign graduates of British universities to stay and work in the UK for two years after the end of their degree.

The reforms, suggested by Immigration Minister Damian Green, would toughen entrance criteria and make it almost impossible for international students to stay on and look for a job in Britain after their course has ended.

The UK border agency claim the policy’s aim is to ensure “that only genuine students who are committed to their academic study come to the UK, with a presumption that upon completion they will leave promptly.”

However, the impact of tougher immigration controls on the British higher education will be extremely damaging to the education sector, as the same thing has happened in Australia. They cracked down on PSW, but this reduced the attractiveness of Australian universities to international students and it’s been estimated to cost Australia £2bn and eventual job losses of 35,000 over 3 years.

Encouraging international students to study in the UK is a large part of a universities income, even more important, when universities are asked to find more money away from Government than ever. Properly funded universities help all UK students.

From a business point of view, they also appreciate the ability to choose the best graduates to work for them. Of course there’s the counter argument that you want “British jobs for British graduates”, but if graduates are good enough, businesses will hire them, it’s not like international graduates bring a cost saving and in fact, many don’t even stay long term.

The liberal, and sensible solution to the employment of graduates is to ensure that the UK graduates entering the workforce all have the skills businesses need. That may require more careers help for undergraduates – bearing in mind many international students will be amongst the best from their respective countries.