Committee publication · Correspondence · 19 May 2026
Letter from Professor Sir Peter Mathieson relating to the Committee's inquiry on China and the UK economy, 23 April 2026
From: Business and Trade Committee
Inquiry: China and the UK economy
Summary
Professor Sir Peter Mathieson, Principal of the University of Edinburgh, writes to the Business and Trade Committee following his oral evidence on 21 April 2026 regarding China and the UK economy. He emphasises China's critical importance to UK research universities across teaching, research, and civic engagement, while highlighting systemic funding pressures that make international student recruitment—particularly from China—a financial necessity rather than choice. He critiques recent immigration policy changes, the proposed International Levy, and calls for urgent sustainable funding reform.
Key findings
- Chinese students are the largest international cohort for most Russell Group universities; 73% of all Chinese students in the UK attend the 24 Russell Group institutions, which collectively depend on this revenue to subsidise home student education and research.
- UK universities face financial crisis: over half are currently in deficit or heading toward it. A substantial reduction in Chinese student intake would 'drive a coach and horses' through leading universities' business models.
- The Research Collaboration Advice Team (RCAT), established 5 years ago as a single government contact point for universities on security matters, is under-resourced and provides generic advice; recent DfE efforts to create a parallel contact point risk fragmenting this coordination.
- Recent UK Government immigration policy changes have made the UK appear less welcoming to international students, undermining universities' ability to diversify their intake away from China-dependency.
- The proposed International Levy in England is an unwelcome additional tax on financially struggling universities; its underlying price elasticity assumptions have not been tested in higher education.
- A sustainable, equitable funding model for UK universities is urgently needed to address escalating student debt and research underfunding, particularly to avoid the debt crisis seen in the USA and now in England.
Tone
FactualTopics
Key actors
Professor Sir Peter Mathieson, University of Edinburgh, Liam Byrne MP, Business and Trade Committee, Research Collaboration Advice Team (RCAT), Russell Group, Department for Education, Universities UK
Notable line
“… immune.If geopolitics or other events were to prevent or substantially reduce the number of Chinese students coming to the UK this would 'drive a coach and horses' through the business modelof the leading UK universities.”
Key Quotes
“China is a very important partner in all three missions of UK research-intensive universities (1. teaching, 2. research - which includes innovation, entrepreneurship, research commercialisation etc - and 3. civic engagement).”
“RCAT is under-resourced for the level of demand it receives and this is at least partly the reason for their advice sometimes being slower than ideal.”
“International student fee income subsidises those areas that are inadequately funded by home governments, namely the education of home students and the undertaking of our research, for which no government or charitable funder pays the full costs.”
“It would be so much better if the recruitment of international students was a matter of choice rather than a matter of survival.”
“… immune.If geopolitics or other events were to prevent or substantially reduce the number of Chinese students coming to the UK this would 'drive a coach and horses' through the business modelof the leading UK universities.”
“The proposed International Levy in England is an unwelcomeadditional tax on universities that are already struggling financially.”
Source · parliament.uk record ↗