David Cameron has insisted it is “perfectly possible” to halve yearly net immigration without damaging business or the economy as he thrashes out a final cabinet deal over a permanent limit on visas for non-European Union workers.

The prime minister was responding on Sunday to an official report from the government’s chief immigration adviser, which said he would need to aim to cut net arrivals by 147,000 during the next four years to be sure of hitting his target.

Cabinet ministers are expected to agree this week to the migration advisory committee’s recommendation of a cap of 43,700 on the number of work permits given to people from outside the EU next year – 13 per cent fewer than 2009.

However, in a 300-page report, the committee warned that workers should account for just 20 per cent of the reduction needed to hit Mr Cameron’s target of bringing non-EU net ­migration down to the “tens of thousands” in this ­parliament.

David Metcalf, head of the committee, said the coalition would also need to make deep cuts to student visas and those for people entering the UK for family reunions.

Many university and college chiefs were dismayed by the committee’s suggestion that the coalition would need to cut student visas by up to 88,000 by 2015, arguing that it would block a vital source of funding just as higher education budgets were being slashed.

However, Mr Cameron said on Sunday that “a lot of people are abusing the student regime”.

The Home Office will announce a consultation with the education sector this week over plans to slash student visa numbers. A crackdown is also expected on the rights of migrant students, workers and family members to settle in the UK.

The prime minister said non-EU migration to the UK was “out of balance”, which was “partly to do with economic arrivals, but also about large numbers of people coming to settle. It’s my ambition to get net migration from the rest of the world coming down to the tens of thousands,” he said.

Mr Cameron’s promise to halve immigration is popular with voters, but the limit on workers has been opposed by business and some ministers, who say it threatens the economic recovery and important trading relations with India, Japan and China.

Chris Humphries, head of the UK skills commission, warned at the weekend that the cap threatened to hurt companies while doing little to address the concerns of voters, who are more worried about eastern Europeans competing for low-skilled jobs.

Skilled workers are “clearly not the group that is causing the public the greatest concern”, he told the Sunday Telegraph.

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