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Immigration cap already damaging British business

The Government’s immigration cap is facing further pressure after evidence from one of its own business advisory committees shows the damage it is already doing to UK businesses.

The evidence reveals that one leading City law firm has been set a cap that is lower than the number of people it needs to hire from outside Europe. The firm says that the employees from Japan and the US are vital if it is to maintain its global competitive edge.

The examples of firms being unable to hire talent from overseas has been compiled by the Professional and Business Services Group, an advisory body that represents the UK’s professional services sector, which includes accountancy, legal services, construction services and human resources.

The sector accounts for 8pc of UK output and is a significant employer with 11.5pc of total UK jobs.

Another information services company and member of the group said that it had already used up its full quota and revealed how low the cap has been set by the Government for many firms.

“We believe that our quota, which is very small, was based on 15pc of our usage of these types of visas from July 2009 to March 2010,” the company said. “We have currently used our entire allocation of Tier 2 visas until March 2011 and believe that additions/extensions are near impossible. The restrictions have stopped us being able to move forward on a couple of instances so far this year.”

Last month the CBI warned the Government that the cap, brought in after the general election, was a “real headache” and threatened the economic recovery. Other industries have also expressed grave concerns about the immigration cap and there are rumoured to be strong divisions within the coalition Government over this issue.

Mark Prisk, Minister for Business and Enterprise, has suggested that the cap could be overturned and exemptions made for “technical staff”. The Government would face a further backlash if only certain sectors were allowed to circumvent a permanent cap which is due to follow the present temporary restrictions.

“We recognise that the Government has to do something about overall numbers but we need a sophisticated approach for business,” said Sir Michael Snyder, chairman of the Professional and Business Services Group and senior partner at chartered accountants Kingston Smith.

“An arbitrary cap appears to be being applied irrespective of the stage of development the business is at. The cap doesn’t take into account the tangible benefits that they [the skilled employees] bring to the UK, such as linguistic skills.”