How much will Brexit harm business schools?

'I can't run an international business school full of Britons,' says Hult boss Stephen Hodges.

by Philip Beresford
Last Updated: 19 Apr 2017

Stephen Hodges’ office is in a beautifully restored former car show room in Chelsea specialising in that quintessentially British marque, the Wolseley. 

But the president of the non-profit Hult International Business School has a very international mission right now. Hult, uniquely with seven campuses globally, serving students from 140 countries, has a London operation with three sites, including Ashridge to the north of the capital. It is the future of this London operation that is exercising Hodges as Brexit and curbs on immigration approach.

A Manchester PhD by way of a Cambridge degree, Hodges knows all about international business having worked in eight countries as well as the UK for a number of blue chips and also the McKinsey consultancy.

Today his London campuses draw around 60% of their 1000 business students from Europe, 35% from the rest of the world and just 5% from the UK. This reflects the efforts that Hult makes to attract overseas students. ‘They learn international business here and go on to launch international careers,’ Hodges says. But for how long?

Theresa May may have failed to curb immigration as Home Secretary. But through her successor Amber Rudd, she appears hell-bent on including foreign students in the target for reducing net migration to the tens of thousands. Even arch-Brexiteers such as International Trade Secretary Dr Liam Fox have argued - to no avail thus far - that foreign students be excluded. Given the Conservatives’ 20-odd lead in some opinion polls, the forthcoming election seems unlikely to make a difference.

Hult, which is financially supported by the Swedish Hult family (which owns EF Education First), is particularly vulnerable to tougher curbs. Aside from its students, some 60% of Hodges’ London staff are EU citizens. Their languages skills make them highly prized.

‘I service 140 countries on my courses so I can't run an international business school full of Britons. I can’t hire only Britons to sell executive education programmes to Germany or to get Russians on undergraduate programmes. If the government changes work visas in a big way or the right to study, international students will stop coming,’ he warns.

There is a lot at stake too for the UK economy. The tuition fees paid by Hult’s students add up to about £60m a year, the vast majority of which is recycled into salaries and services locally. In addition, spending by students is reckoned to total about £25m a year. But this is the mere tip of the national iceberg. A recent report by the Oxford Economics consultancy for Universities UK found that international students generated £25.8bn for the economy, and that spending by the international students across the UK supported 206,600 jobs.

Hodges had a preview of what the future could hold in the immediate aftermath of the Brexit vote last June. In an unprecedented move, some 50 would-be students out of 450 withdrew their applications for Hult, including some who had paid in full at the time. They were refunded but Hodges, on holiday in Spain at the time, was emailing and phoning for the next 24 hours to re-assure his worried staff.

They were saying ‘do I have to leave tomorrow?, and we were almost talking them off the window ledge trying to reassure them that we would take care of them.’ Though the lower pound has helped Hult’s applications recover, it was a salutary experience which he clearly does not want to repeat.

But he acknowledges that curbing international student numbers is one of the few areas where the government currently has the levers to actually curb immigration, though after Brexit it will have more through curbing EU nationals. The problem, as he sees it, is what does it say about Britain’s place in the brave new post-Brexit world?

‘Brexit must be about the UK embracing the world. In the war for talent, who the hell says they don't want the best and brightest? If someone has a PhD in an emerging technology and we say we don’t want you as an overseas student, what sort of policy is that,’ Hodges warns, adding a chilling forecast: ‘shutting the country down will be a disaster and we will see lots of jobs and businesses move out of the UK.’

Other countries with strong educational systems in the English-speaking world are set to take advantage of the UK’s possible introverted future. Australia, Canada and New Zealand are already seeing big jumps in overseas student numbers with all the attendant economic benefits.

Even Donald Trump’s America shows less hostility to foreign students. ‘When I speak to American embassies, they tell me we are in the business of getting students to study in the US provided they are genuinely going to study’, Hodges says. To prove the point even with relations between China and America at a low point, there are 328,000 Chinese students in America, five times as many as a decade ago. They make up nearly a third of the more than 1m international students Stateside.

For Hodges, a lifelong Tory voter, the present government’s attitude is in direct contrast to Margaret Thatcher’s approach of making Britain as open as possible for business in a globalised economy. But his battle is also personal. His highly qualified Swedish wife is worried about her status in London. ‘If she is worried, married to a Brit, imagine what many other EU nationals are feeling right now?’

Worried, very worried must be the answer.

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