Which of these makes the biggest contribution to the UK economy: Pret or the University of Oxford?
Or how about Manchester United versus the University of Manchester?
If you chose wraps and footballers over our universities you would not be alone. Unfortunately, however, you would also be wrong.
As students return from their long summer break for a new academic year, polling by King’s College London shows that most people underestimate the positive economic impact that universities make to the country.
The higher education sector generates more than £265 billion for the economy each year including through employment, exports and innovation.
As well as being drivers of social mobility, our universities are local, regional and national growth engines that help develop the skills that businesses and places need. A key part of this success story is the UK’s attractiveness as a place to study.
Analysis by Public First commissioned by the University of York shows that every British adult – on a full-time equivalent basis – is on average £466 a year better off because of international students.
Income from international students also subsidises teaching of their fellow UK classmates and research. And as well as making a substantial economic contribution, these students also help to foster cultural exchange, drive innovation and extend the UK’s soft power worldwide.
Over the past decade, however, universities have then seen this eroded by a series of perverse policy decisions designed to curb international student numbers. That is despite polls consistently showing that the British public are far more positive about people coming here to study than politicians often assume.
Last year, the Starmer government committed to introducing a new levy on higher education income from international students from 2028.
This follows measures such as banning students from bringing dependants, hiking visa fees, reducing the length of the graduate post-study work visa and more restrictive compliance thresholds which arbitrarily prevent students from countries like Pakistan coming here this year. Taken together, these have had a predictable impact.
Figures show student visa applications in the peak application month of August have fallen 16% compared with 2025. Fewer applications from international students risks jeopardising the financial stability of some institutions that are already facing acute funding pressures. It also directly hits growth and employment both regionally and nationally as well as other sectors that rely on skilled graduates.
London alone attracts over 200,000 international students, more than any other city worldwide, who contribute £12.5 billion to the capital economy each year, supporting jobs, local businesses, and public services. Across the North, in individual parliamentary constituencies in cities like Manchester, Leeds and Newcastle, they contribute over £30 million of GVA.
So what can be done to reverse the damage? Firstly, the Government should rethink the proposed higher education levy to avoid our universities being put at a disadvantage to their global counterparts.
And removing international students from net migration figures given the vast majority return home after their studies would help avoid it becoming an annual flashpoint. Secondly, ministers should look again at regulation that is holding back the sector.
The Government is right to seek to control migration and set robust compliance requirements for universities but the current visa system is not working.
Not only is the bar for issuing visas exceptionally high, the system is delivering outcomes that feel arbitrary. For example, one applicant was recently refused a visa because he didn’t know the postcode of his second-choice university.
And finally, ensuring universities and business work effectively together is fundamental. That includes co-designing courses, providing opportunities for graduates to get first-hand experience of industry and universities continuing to improve their efficiency including by leveraging AI.
Andy Burnham knows from his time as Mayor of Greater Manchester that some of the most successful examples of place-based growth have been built on partnership between universities, businesses and government.
With the right framework, this model can be replicated up and down the country. That would turn good growth in every postcode from a soundbite to reality.