Dose of realism over EU exit strategy

February 7, 2013

I cannot share the optimism of Alison Wolf and Nigel Healey over the prospects for UK higher education should the country leave the European Union (“Quitting Europe would be big, but not a crisis on the home front”, Opinion; “Get out and we’ll be quids in: departure would allow UK to charge EU students more, experts argue”, News, 31 January). Wolf, the director of King’s College London’s International Centre for University Policy Research, observes that the countries that pay the most into the EU budget also get the most out. That is broadly true, but since there is no hypothecation in the budget, can we really assume that the share of the money we previously paid in, notionally for research, would simply be redirected to us? The changes to higher education funding generally since 2010 and the pursuit of excellence through funding concentration (marginalising a large number of researchers in a great many universities in the process) do not bode well on this score.

As for the UK’s ability to charge EU students higher fees, I fear flashing pound signs are interfering with people’s vision. Can we simply levy more and not expect numbers to fall as Wolf suggests?

I am afraid I must also challenge some of the assumptions made by my friend and colleague Nigel Healey, pro vice-chancellor (internationalisation) at Nottingham Trent University. While I accept his argument that EU applications in 2012-13 indicate that the market is not very price responsive, my question is this: to what extent is that based on the availability of student loans?

Loans may be available to all European Economic Area students, not just those from EU countries, but how realistic is Healey’s assumption that the UK, on leaving the EU, would remain in the EEA? EEA members have to make contributions (albeit smaller) to the EU budget and must implement EU legislation but have no say over it. In practice, I suspect that leaving the EU would also mean withdrawal from the EEA. How price sensitive would demand be in the absence of student loans?

Rob Ackrill
Division of Economics
Nottingham Business School
Nottingham Trent University.

Alison Wolf argues that if the UK were to leave the EU, EU students could be charged at overseas rather than home student rates, generating a cash bounty for British universities. This is unlikely.

In one post-exit scenario, the UK might remain a member of the European Economic Area and a part of the single market, in which case such fee discrimination against EU students would be impossible.

In another scenario, the UK’s total exit from Europe, overseas student rates could be charged. However, EU students would then face higher fees and increasingly stringent restrictions on student visas.

Neither scenario supports Wolf’s argument.

Christopher Grey

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