FT interview: Immigrant cap hits economy, says Cable

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.

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8 Comments

  • Before the General Election the perception was that Vince Cable could do no wrong – indeed, on many occasions I sung his praise on the web, which makes it all the more sad that since the election he has been wrong on just about every issue (including his unjust proposal for a ‘graduate tax’). It is so sad that he has clearly sold out to the greedy bankers and lazy businesses who just want a cheap source of labour that they can bring in from abroad rather than going to the time and expense of training UK residents and giving newly qualified UK graduates the opportunity to gain work experience.

    I know from personal experience that there are huge numbers of high-quality UK graduates looking for jobs, but because they are recent graduates they lack the all-important work experience. The current situation is a disgrace, and Mr Cable should concentrate on pressurising his new-found friends in banking and business to recruit UK residents and provide them with the relevant on-the-job training.

    To suggest that we currently have “punitive caps” on immigration is absurd when there are still huge numbers of migrants entering the country. In recent elections I voted Liberal Democrat (in a tight marginal seat currently held by the Lib Dems) despite the fact that I disagree with its “relatively liberal immigration policy”. The reason for my disagreement is simply that the UK is already grossly overpopulated – we have an unsustainable population (in terms of resource usage) that is causing huge damage to our environment and the ecology of the UK. Sadly, when it comes to a sensible discussion about population size (and hence immigration) far too many Liberal Democrats, like Mr. Cable, put the interests of the City and big business before those of the environment and biodiversity. It is wrong to only consider the short-term economic advantages of immigration whilst totally ignoring the long-term ecological disadvantages. In this respect the Liberal Democrats’ pro-immigrant dogma is no better that the “Tories’ anti-immigrant dogma”, both are ignoring the negative environmental consequences of unconstrained population growth.

  • Well said, Vince.

  • David Allen 17th Sep '10 - 4:05pm

    Glad to see a Lib Dem senior minister speaking out for a change. Well done for that, Vince.

    However – the arguments Vince has used about the needs of business, while perfectly valid, are of course arguments which do naturally appeal to Tories. So it’s a bit sad to see Vince’s remark that he’s straining “at the limit of collective responsibility”. This would suggest that, had his objection to coalition policy have come from a less right-wing-friendly perspective, he might still have felt compelled not to voice it.

  • Terry – very well said.

    I’m no graduate – but as an IT worker I’ve seen a lot of colleagues replaced by hard-working, proficient but above all cheap employees supplied by one of many Indian Consultancy firms.

    Like you say – cheap labour

  • @David Allen: Well, he is business secretary, so it seems natural that he should comment on it from the viewpoint of his portfolio. And as you pointed out, they are no less compelling because of it.

  • It’s an interesting example of hypocrisy on the Tories’ part: they constantly make the argument about taxing the rich too much resulting in a brain drain to other countries, when their own pandering to anti-immigration sentiment is resulting in jobs moving overseas, often high-paid jobs done by the rich (amongst whom there is – understandably – the highest labour mobility, if not actual labour movement).

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