Cable is right: Cameron's kneejerk immigration policy is bad for business

Vince Cable is in many ways the biggest disappointment of the Coalition. He is a shadow of his former self, showing little sign of the sparkling wit that brought forth the cruellest jibes against Gordon Brown when he was the Lib Dems' stand-in leader. But today, in criticising David Cameron's knee-jerk approach to immigration as 'very unwise', he has redeemed himself a little. The coalition's ludicrous immigration quotas are a threat to British business.

Labour had, rather more sensibly, developed a points system which meant that skilled people could be recruited where they were needed. But by substituting a quota system, the Government has tied itself in complete knots.

Universities are a good example. Higher education is big business for the UK, worth almost £5bn a year in fees and spending by overseas students. While there are bogus private colleges that operate above chip shops, there are also hundreds of thousands of legitimate degree-level students who can choose to study in Australia, Canada, New Zealand or Malaysia rather than Britain. Labour rightly expanded their numbers and actively recruited in countries like China and India. Instead of focusing its clampdown on the bogus colleges, the coalition is using a blunt axe as part of its migration policy to make recruitment, including in private degree providers that might provide real competition (alongside FE colleges) to keep fees down. And it is reducing incentives for overseas students, denying them the chance to use their skills in the UK after graduation (something Sir James Dyson has criticised).

The truth is that immigration made and makes a real contribution to economic growth, so long as migrants pay taxes and contribute their skills. Both are surely useful attributes to a government with no obvious growth strategy. Of course we need to improve the skills of British youngsters, but to pretend that having more skilled or paying migrants is bad for Britain is simply bad economics. Any business secretary who didn't recognise these facts wouldn't be worthy of the title.