Alison Wolf

Instead of worrying about tuition fees scaring off EU students, we should concentrate on attracting the best overseas students.

A few weeks ago the British Council warned that higher tuition fees might scare away European Union students; something, The THES duly intoned, that "the government would be unwise to ignore". At the time, it struck me as a very odd reason for opposing higher fees. Thinking about it since simply makes it odder.

With apologies to everyone who (unlike me) already knew all about funding, here is what happens. EU countries must treat students from all other EU countries exactly as they treat their own nationals; so if your students pay no fees, nor do those from elsewhere in the EU. If there is a £1,100 upfront fee, everyone from the EU pays it; if you move to deferred income-contingent fees at subsidised interest rates, the same applies. And if you offer exemptions to home students from low-income families, you must offer the same exemptions to all other EU students as well.

Each country foots its own bill: there is no EU-wide settling of accounts according to whether countries end up as net exporters or net importers of students. It doesn't matter to our university finance officers whether an undergraduate is from the UK or another EU country. Both are charged fees in exactly the same way (with the Department for Education and Skills paying directly for non-UK EU students from low-income families), and the Higher Education Funding Council for England provides the teaching resource, currently averaging about £4,000 per student. At the moment, there are about 43,000 full-time "other EU" undergraduates in UK universities, up from 28,000 a decade ago: equivalent, in fact, to two or three good-sized universities (and about £175 million in Hefce funding). The Higher Education Statistics Agency gives detailed annual statistics on students enrolled here, but not on UK residents enrolled as regular undergraduates in other EU countries. However, we can be pretty certain that it doesn't come close to 43,000. On exchange programmes such as Erasmus and Socrates, which provide living expenses as well as fees, the UK always sends far fewer students than it receives.

So why should universities care if rather fewer EU students come, but those who do pay more towards their costs? Given the numbers willing to pay full fees in UK universities (more than 150,000 last year), it is inconceivable that EU students will depart en masse. Indeed, numbers from the new member states will surely increase. Universities with strong competition for entry will hardly notice any drop in numbers of applications. Those struggling to fill a course, and ready to welcome any EU student who turns up, might: but if the government meets its participation targets, that should soak up the empty places anyway. So the financial argument looks feeble. But are there other reasons why EU student numbers should be important to the fees debate?

Even in his most Europhile moments, the prime minister sets his higher-education target at 50 per cent participation for British students, not helping Europe reach 50 per cent by subsidising education here for as many other Europeans as possible. Bringing lots of young Europeans to Britain might promote a European identity; but I can think of cheaper approaches. Promoting our way of life is, of course, the British Council's raison d'être . Its website may be full of cost-of-living data, reassurances about the free National Health Service and the bargain of a three-year degree, but that is because it wants to get people over here. If we believe that our culture is worth experiencing, subsidising students is one obvious policy. Our own students (and academics) should also benefit from diversity. But why EU students in particular rather than overseas students in general?

Perhaps we want EU students because they can stay and work, having acquired good English at university. This may be true, if impossible to cost: certainly the US has benefited enormously from importing and keeping top graduate students. However, the argument is far stronger for graduates than for undergraduates - and at graduate level we have no systematic policies and far less generous support. And again, why just the EU? Wouldn't money be as well, if not better, spent increasing the number of scholarships and work opportunities for the best students from the whole world?

Of course, students do more than pay fees. But I'm not a landlady or a bar-owner. I'm a taxpayer and an academic. I can't see any good argument for giving indiscriminate subsidies to students from countries richer than our own. On the contrary, the less we do so, the better.

Alison Wolf is professor of management at King's College London.