Changes to student visa rules are costing the British economy at least £600m a year, according to new research.

English language centres are losing an average £500,000 worth of business each as a result of the new requirement that their students must have reached a certain level of proficiency before they can be granted a study visa.

And 60 per cent of language travel agents said clients had chosen to study English in the UK's competitor countries, including the USA and Australia, as a result.

"In the face of these facts, which support a conservative estimate of loss to the UK of £600 million minimum, the UK Border Agency's argument that the impact on the sector would be 'limited' cannot be sustained," said Tony Millns, Chief Executive of language teaching association English UK, which surveyed its members and their agents to support its campaign for an urgent revision of the rules.

He added: "The loss to UK foreign earnings comes at a time when we need export growth to lift the country out of recession."

Since March 3, when the new rules were introduced after a review of the Tier 4 visa system, students of English who want to take courses of longer than six months have had to prove that they have already reached level B1, which experts say is the equivalent of a top-grade GCSE.

Border Agency officials argue that beginners could reach B1 on a six-month student visitor visa which is unaffected by the new restrictions, but English language schools say many would find this impossible.

The agent survey shows just 40 per cent of students who had wanted to learn English in the UK are choosing this option. Although this is better than nothing, these students are taking shorter courses than they might otherwise have done, reducing their spend in the UK. They may also be less likely to continue studying here, particularly if they cannot reach B1 in six months.

English UK surveyed just under 10 per cent of its member centres in early June, asking how many students they had been forced to turn away since March.

Centres reported an average loss of 35 students who were not at level B1 but could previously have been enrolled on lower-level courses which were long enough to get them to their desired level of English. A very small proportion had chosen to come on a six-month visa, but the vast majority had applied to other countries. The average financial loss to each centre was around £125,000 for those weeks alone: over a year it would be half a million pounds.

"Over a year, this would mean a loss to the total English UK membership of at least £220m in tuition fees. The loss to the English language sector as a whole would be around £300m, with the loss to UK foreign earnings at least double that, as students spend several hundred pounds a week on accommodation, food, travel, books and general social spending ," said Mr Millns.

He emphasises that these figures were an underestimate and the true loss to the economy would be much higher. This was because the survey was done at a quieter time of the year for language centres and because there was no way of quantifying how many potential students had been put off from even enquiring about courses at a UK language centre by the B1 minimum.

Mr Millns added: "Some of these students would have intended to continue studying in the UK, usually with another course at degree level, and that further income, roughly £20,000 a year per student, has almost certainly been lost to us as well."

English UK's survey of 200 leading study travel agents in 31 countries, also conducted in early June, strongly suggests the new rules have had a huge impact on numbers of genuine students choosing to study English in the UK as well.

Of the agents who completed the survey, 40 per cent said their clients had chosen a shorter UK course on a six month student visitor visa. The remaining 60 per cent had chosen courses in other countries after learning of the new rules, with the leading choices now the USA, Canada and Australia.

"Some of them even cancelled the booking and went to the USA instead," said one Japanese agent, whilst a Turkish agency commented: "Most of our students have decided not to go to the UK. They think that the UK Government does not want Turkish students anymore."

Mr Millns said international language organisations were seeing the same trends. One group's English language centres in the UK are down by US $2m so far this year, with referrals to USA courses up 50 per cent.

And the number of CAS (Confirmation of Acceptance of Study) being issued by language centres as part of the visa process also strongly suggests the UK is losing business.

Mr Millns said 6,400 were issued during the first ten weeks of the new rules, equating to an annual rate of around 35,000. "This is extremely low given that in a typical year, between 500,000 and 600,000 people come to the UK to learn English, and it would support the argument that visa national students are going to countries other than the UK to learn English."

Notes to Editors

1. English UK is the world's leading language teaching association, with 440 accredited centres in membership. It covers university and further education college language departments, international study centres in independent schools, educational trusts and charities, and private sector colleges. English UK is a UK registered charity.
2. More than 500,000 students every year choose to learn English in Britain, an estimated 43% of all students who travel abroad to study English. They contribute about £1.5 billion to the UK economy in course fees, accommodation and general spending. Many students go on from English language courses to UK degrees or professional qualifications. There are long-term affinity benefits to Britain as well, since many students go on to be opinion-leaders and senior figures in their own countries.
3. For more information, please contact Tony Millns (Chief Executive of English UK) on 020 7608 7960 or tony@englishuk.com.