Maximise returns – go long

Who knew that Vince Cable was such a fan of alliteration? Speaking this week at the last of the main political party conferences, the Liberal Democrat business secretary said that it was time to stand up to the “purveyors of panic, prejudice and pessimism” on immigration.

His speech reflects a hardening of party lines as Westminster gears up for next year’s election, and follows the refusal by the Conservative universities minister Greg Clark to countenance removing international students from the net migration figures that drive visa policy. To do so, he said, would be to fiddle with definitions set by the Organisation for Economic Cooperation and Development that the government could not “opt in and opt out of”.

However, his Labour shadow, Liam Byrne, has said that he would happily ditch this OECD convention.

They bring in money, help to fund both home students and research, expand the horizons of others and leave with a little piece of Britain in their hearts

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All the while, evidence continues to amass of shifts in the global flow of students.

An analysis last month by Universities UK found that the number of Indians starting university courses in the UK has almost halved in two years, and this week the British Council predicted that the country would grow increasingly reliant on postgraduate students from China over the next decade, with up to half our eggs piling up in a Chinese basket as we lose market share elsewhere.

One of the flaws in the political system is the frequent incentive to resort to short-termism.

It seems likely that many if not most people would view the presence of appropriately qualified international students as an unqualified good. Indeed, there is evidence from the Migration Observatory at the University of Oxford that this is the case. And why wouldn’t it be? They bring in money, help to fund both home students and research, expand the horizons of others and leave with a little piece of Britain in their hearts. Yet an often amorphous fear of “immigration”, and what it might mean at the ballot box, trumps common sense and puts political expediency in the driving seat.

I was reminded of this folly in a radio interview with someone in another field altogether – fund manager Neil Woodford, darling of the investment world.

Asked why his very successful strategy of taking a long-term view (an approach also favoured by Warren Buffett) wasn’t applied by more investors, he said: “They are constrained by incentives around the corporate risk of their employers, their remuneration structures – all sorts of things constrain their desire to employ long-term strategies.”

As it is for fund managers, so it is for many politicians, who clearly feel constrained by the swing to the right of portions of the electorate.

Yet the need to retain a long-term view over international students is as vital now as it ever was. The point was made well by Jonathan Simons, head of education at the Policy Exchange thinktank, at the Tory conference last month: “I would like a scenario where every world leader, every CEO, every man or woman of remote influence in the world, had been educated in a British university, because the more people that have, the more people that understand British values, then the more soft power we have as a country,” he told a fringe meeting.

How’s that for a long-term strategy in a changing world? Surely it beats politically pragmatic but pusillanimous and parochial posturing?

john.gill@tesglobal.com