October 30, 2011 5:15 pm

Business warns mayor of risk from visa cap

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Immigration officers at Gatwick's border control

Business groups are urging Boris Johnson, London’s mayor, to do more to ensure that the capital is “open for business” as the government imposes ever-tighter curbs on migrants from outside the European Union.

The call for action – in a letter to City Hall signed by representatives of London First, the London Chamber of Commerce and Industry, and the Federation of Small Businesses – says that while Mr Johnson has in the past been “vocal” about his concerns in regard to home office immigration policies affecting business competitiveness and inward investment into the capital, he should act now as a “greater advocate for London” about these issues.

Ministers hope their policy reforms will fulfil the Conservative election pledge to reduce net migration from the current level of 239,000 to less than 100,000 by 2015.

Last week, the Financial Times reported that Damian Green, immigration minister, has asked the body that advises government about migration to consider reducing further the number of visas available to non-EU economic migrants, currently set at 20,700 a year.

Mr Green is also expected soon to announce fresh rules on migrant settlement, including a possible five-year limited stay for workers coming into the UK.

However, the business organisations warn in their letter that the immigration cap has “enormous potential to hinder the arrival of highly skilled, economically valuable individuals working and investing in our companies”. They suggest that any tightening of the visa cap in the current economic climate is “dangerous at a time when we need to be open to growth”.

The letter also argues that students – who are worth more than £2.5bn a year to London’s economy – should be classified as temporary migrants so they can be exempted from the government’s target migration figure. It adds that no more cuts should be made to the UK Border Agency’s frontline staff, after the agency announced that it is to slash 5,200 jobs by 2014.

Mr Johnson has previously broken ranks with his party’s line on immigration, most notably last year, when he attacked the plans for a visa cap, saying it would put the economic recovery at risk.

City Hall said on Sunday that Mr Johnson had not yet replied to the letter, but that he believed immigration had been historically beneficial to London’s “economic, social and cultural fabric”.

“The mayor…supports a flexible immigration system which ensures that the capital can attract the best skills in the world to ensure it remains competitive in the global market place whilst at the same time preventing abuse of the system,” a spokesperson said.

Responding to the letter, Mr Green said that the visas had been undersubscribed every month since the cap had been introduced in April this year.

“Not a single valuable worker has been prevented from coming here,” he said. “We have already put in place measures to attract foreign investors and entrepreneurs, and have been in discussion with London businesses and London First. It is essential businesses reduce their reliance on migrants and provide jobs and opportunities to resident workers.”

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