The Prime Minister is understood to have been influenced by business concerns that the cap introduced after the election is preventing highly-skilled people from coming to this country and thus damaging British business and the economy.
The current limit of about 2,600 non-EU migrants a month is expected to be increased to allow more than 4,000 workers a month to enter Britain next year. The final cap is still being discussed but is expected to be unveiled later this month.
This week, the Migration Advisory Committee will publish its recommendations to ministers on the level at which the cap should be set. The committee is expected to offer a range of scenarios and the Coalition is expected to reject the more hardline approach.
One well-placed source said: “We have listened to the concerns of business and realised that although we need to bring UK immigration under control, we don’t want to damage the economy. We want the best skilled people from around the world to still come here.”
The increase in the cap marks a success for Vince Cable, the Business Secretary, who had been an outspoken critic of the Government’s previous plan and called for more flexibility to reflect wider economic conditions. Boris Johnson, the London mayor, has also warned of the dangers of the cap.
Mr Cameron is said to have become increasingly supportive of Mr Cable’s position and Downing Street aides reportedly asked Theresa May, the Home Secretary, to “tone down” a recent speech on immigration.
Increasing the cap does not, however, address concerns that an arbitrary number of visas being issued on a ‘first-come first-served’ basis takes no account of the skills that the individual holds and does not allow urgent requirements to be quickly addressed.
A national cap also takes no account of regional differences, as outlined recently by the Scottish Culture Minister, Fiona Hyslop, who claimed the Westminster Government’s proposed cap on the number of people coming to the UK for a skilled job could have a damaging impact on Scotland’s ability to attract and retain world-class talent.
Last week, it emerged that the number of overseas-born workers in Britain this year had increased by about 126,000 people to a record 3.8million, while the number of working Britons fell by 179,000. More than half of the rise in migrants was accounted for by Eastern Europeans, who are not covered by the cap.
In the last year of the Labour government, net migration – the number of people coming to live in Britain compared with those emigrating – stood at almost 200,000. The Coalition has pledged to at least halve this by 2015 – largely by restricting the number of skilled workers from beyond the EU.
In June, the Home Office introduced a temporary limit of 24,100 workers to enter the country before April 2011, when this cap will be replaced by permanent measures.
In an interview in September, Mr Cable said that he was being warned by senior business leaders that companies were relocating abroad because of the constraints.
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 to 40. They have moved some operations to Hong Kong.”
He also claimed to have a file detailing examples of companies considering relocating jobs overseas because they were being prevented from moving key staff to London.
David Frost, the director general of the British Chambers of Commerce, has urged the Government to reassess the cap as it “must not undermine the ability of UK businesses to recruit the best and the brightest”. Several Nobel Prize winners have also warned that it is harming the scientific and research community.
Nicola Dandridge, the chief executive of Universities UK, said the restrictions would “cause major problems for UK businesses and universities”. She added: “World-class research requires world-class people, and we simply can’t adopt a ‘Fortress Britain’ attitude.”