Will Immigration Endanger UK Lib-Con Coalition?

Like in other countries--most prominently the United States in today's headlines--immigration is an issue fraught with difficulty. Largely overlooked, however, are the efforts of certain UK Conservative to limit immigration to Britain by non-EU citizens (like yours truly). Though a hard cap hasn't been determined yet, tensions are beginning to surface among the Tories themselves and with their allies in coalition government, the Liberal Democrats. Unlike the Conservatives who used ads like that above during the 2005 election cycle that were just asking to be vandalized, the Liberal Democrats tend to speak less in such terms.

Matters may soon come to a head between the Tories and the Liberal Democrats over this issue. I tend to view the latter as a brake on the former's excesses--no more so than on migration. The spur for this conflict was PM David Cameron visiting India to (surprise!) drum up more trade and investment ties with Britain's rising former colony. While there, however, Indian authorities raised objections to the limits being proposed on non-EU migrants. Alike in the US, India has many knowledge workers who are keen on capitalizing on opportunities in the UK. However, the old bugaboos have resurfaced:

David Cameron on Wednesday promised to carry a “spirit of humility” to India as he lands on a “jobs mission” to the subcontinent that will reassure New Delhi that Britain’s immigration cap will be enforced “liberally”...Mr Cameron’s team will pledge to heed India’s concerns on the details of Conservatives flagship immigration policy, as it presses New Delhi to “reduce barriers” to foreign investment in financial services and defence.

Vince Cable, business secretary, told the Financial Times of his determination to ease the fears of Indian companies. “Certainly in terms of work permits for management and technical staff who are needed in the UK we want the system to operate flexibly. I want to reassure the Indians that we are going to deal with this liberally,” he said.

The cabinet is split over the impact of the cap, which both Tory and Liberal Democrat ministers fear will stifle growth if enforced too strictly – a disagreement Mr Cable laid bare in a separate interview with Indian media. “It’s no great secret that in my department and me personally, we want to see an open economy and as liberal an immigration policy as it’s possible to have,” he said. “We are arguing, within government, about how we create the most flexible regime we can possibly have but in a way that reassures the British public.”

A temporary cap of 24,100 is currently in place on non-European Union workers before the full cap is implemented in April. On a visit to London this month, Anand Sharma, the Indian commerce minister, raised his “concerns” with Mr Cameron directly over the restrictions. A Downing Street insider stressed on Tuesday that there was a consultation on the proposals. “We want to work with India...on the implementation,” he said.

Meanwhile, British industry is up in arms:

The stand-off between British business and the coalition government over plans to cap immigration was threatening to turn into open conflict after it emerged that many companies would not be allowed to hire any non-European staff for the rest of the financial year.

Lady Jo Valentine of London First, a lobby group representing many FTSE 100 companies, described the measures as “economically insane”. Leading City law firms said several of their biggest blue-chip clients, including large international banks, would be given only a handful of work permits, and in some cases none. “We have a number of international financial institutions whose allocation has been reduced to zero,” said John Skitt, head of immigration at Clifford Chance.

Caron Pope, who leads the immigration practice at Cameron McKenna, said companies were “furious” about the restrictions. “I’ve had conversations with people who are saying ‘if they are going to make it this hard for us then we’ll just go offshore’,” she said. The issue is fast becoming one of the biggest early tests for David Cameron, the prime minister...several of Mr Cameron’s cabinet colleagues have raised profound doubts about the cap, arguing that it would damage Britain’s competitiveness and anger important trading partners such as India...

Damian Green, the immigration minister, said yesterday: “Businesses have known about the limit for a month, so it is a little implausible that they are expressing shock now ... They are going to have to reduce their reliance on migrant workers.”

Are Tories still thinking what they were thinking in 2005? Hopefully, the Liberal Democrats and India can pressure them into thinking otherwise. Lib Dems hold considerable political leverage, while India considerable economic leverage.