SNP 'still in the dark on £85m international student tax'

The Herald Scotland

27-05-2025

Initially, the UK Government said the proposal would be a matter for consultation with the Scottish Government, but later changed its position saying it would only be brought in north of the Border if it was the policy of the devolved administration in Edinburgh.
Now, the SNP appears to be in the dark about the remit of the tax and point out Scottish universities have already been hit with a new bill of £30m because of the UK Government's increase to employer national insurance contributions.
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The party says it urgently wants Labour ministers to give clarity on the matter and that the UK Government has had no engagement with the Scottish Government on the issue or provided any direct assurance that the levy will not apply in Scotland.
Prime Minister Sir Keir Starmer announced the new 6% tax on foreign students earlier this month as part of his crackdown on immigration, with critics accusing him of unveiling the measures in response to the success of Nigel Farage's populist right Reform UK in the local elections in England.
Education is a devolved issue while migration legislation is reserved to Westminster.
"We had the unedifying spectacle of Keir Starmer dancing to Nigel Farage's tune on immigration as he announced plans which are completely out of sync with Scotland's needs and values," SNP MSP Bill Kidd told The Herald.
SNP MSP Bill Kidd (Image: Andrew Cowan) 'Labour's damaging migration plans are a direct threat to Scotland's NHS, our economy and our universities.
'The UK Labour Government has already slapped our universities with a £30m bill with their reckless decision to hike employer national insurance contributions.
'Our universities have now been left in limbo not knowing if they are faced with a further bill of £85m directly due to Labour's political choices, whilst they also face the prospect of finding it harder to attract international students."
Mr Kidd called for the Prime Minister to "urgently provide clarity" on whether the proposed tax on international students will apply in Scotland and urged him to say if he would consider introducing "a Scottish Graduate Visa".
The Scottish Graduate Visa policy was unveiled by First Minister John Swinney in January and would allow overseas graduates at Scottish universities to live and work in Scotland for up to two years allowing employers in Scotland to benefit from their skills while generating income for public services through their taxes.
'Keir Starmer must urgently provide clarity on whether this proposed tax on international students will apply in Scotland, whether he will look again at introducing a Scottish Graduate Visa, and whether he will listen to experts from across various sectors and ditch his damaging anti-immigration agenda," he said.
Scotland faces significant population challenges, including a falling birth rate, an ageing population, and declining population in certain rural areas.
While migration has helped to offset these declines, the future impact of decreased in-migration due to factors like the ending of freedom of movement from the EU post Brexit is a key concern.
As well as allowing international students to live and work in Scotland for two years after graduation, the Scottish Graduate Visa would allow them to work towards a Skilled Worker Visa, encouraging and enabling the best international talent to remain in Scotland.
Several Scottish universities are facing acute financial challenges and major job losses.
Last week University of Edinburgh staff voted for industrial action, which could include strikes, as the institution refused to rule out compulsory redundancies. The university is looking to cut £140m from its budget, plans for which would include cutting staff, selling buildings and merging schools.
Meanwhile, around 300 jobs will be cut at Dundee University - down from an initial estimate of 700- following a £35m budget gap, while up to 70 jobs could be lost at the University of Aberdeen if the institution doesn't raise enough revenue to reduce its £5.5m financial black hole.
The crisis has led to debate over whether the Scottish Government policy of free tuition for Scottish students should continue.
On Saturday Andrew Cubie, the author of a report published in 1999, which paved the way for free tuition, said in an interview with The Times free tuition was no longer affordable in its present form and was failing to retain some of the country's best students.
'We've got to start thinking the unthinkable,' he said. 'The unthinkable is there'll be less money, not more money, so what do we do with less money? That raises the question of how many universities, how many colleges do you need? What should the private sector be contributing to this? And why, with free tuition fees, has Scotland not gained an edge in attracting students from less advantaged backgrounds?'
The former lawyer said a cap on Scottish student numbers meant some of the best qualified students were looking elsewhere for university places.
A UK government spokeswoman said: "The international student levy will not apply in Scotland unless the Scottish Government decides to introduce it.'
It is understood the UK Government has written to Universities Scotland, the organisation representing Scottish universities, to say the tax will not apply in Scotland unless the Scottish Government decides to introduce it.
Scottish universities sources have told The Herald they have been given "verbal assurances"from the UK Government the international student tax won't apply to them unless the Scottish Government bring it in.
The Scottish Government has previously said it will not introduce it.
A Scottish Government spokesperson said: 'Scottish Ministers have directly raised concerns with the UK government about the lack of clarity on the proposed levy on international students and if it will apply to universities in Scotland. No formal clarification has been given.'