FT interview: Immigrant cap hits economy, says Cable

by Stephen Tall on September 17, 2010

Vince Cable, Lib Dem secretary of state for business, skills and innovation, has made plain his views on the Coalition Government’s official policy of an immigration cap. In an interview with the Financial Times, Dr Cable states:

“A lot of damage is being done to British industry,” the business secretary told the Financial Times on Thursday. He said companies were moving jobs overseas in response to punitive caps that left them unable to hire key staff. “I’ve got a file full of examples. This is not just people whingeing,” he said. The cap on non-EU workers was a manifesto pledge for David Cameron and proved popular with voters: it was reluctantly accepted by Lib Dems in the May coalition negotiations.

Later in the interview he comments:

“I am not known of as the best friend of investment bankers, but you know they are quite an important source of economic activity,” he said. “I was talking to people in the City and there were two investment banks that recruit hundreds of people from the non-EU area, Indians and Americans. They were allowed only 30-40 [visas]. They have moved some operations to Hong Kong.”

Mr Cable said in one instance a UK company needed 500 specialist engineers but was given a quota of four. He spoke of an entrepreneur who ditched plans to open a factory and create 400 jobs in northern England after failing to secure visas for key staff. Mr Cable said the temporary quota cap had been wrongly fixed at 2009 levels. “The economy is now recovering but companies can’t get access to the people they need.”

You can watch a video of the interview here.

Three points:

1. There is not a little irony here in Vince Cable, regarded by some right-wing Tories as basically a socialist, being the cabinet minister sticking up for the financial services industry’s wish for free movement of labour. The Tories’ anti-immigrant dogma — deeply inconsistent for a supposedly free market-supporting party of capitalism — is in danger of harming the British economy, and Vince is quite right to speak out.

2. While Vince makes plain he’s speaking out as the business secretary (and in the interview apparently acknowledges he’s straining “at the limit of collective responsibility”) he’s also staking out an identifiably Lib Dem position. Though our relatively liberal immigration policy almost certainly cost the party votes at the last election, it is a principled position few if any party members would give up. We may have to compromise for the sake of Coalition, but this doesn’t alter the Lib Dem view that immigration is a net good for the country.

3. Though inevitably (and, to be fair, understandably in this instance) the news media is crying, ‘Splits! Tension!’, I do wonder quite how troubled David Cameron will be with Vince for speaking out against the immigration cap. The Prime Minister doesn’t seem to me to be as theological as the rest of his right-wingers on immigration, and will most likely side with Vince in putting first the interests of both business and those immigrants wanting to ply their trade here.