Immigration cap may mean decline in British competitiveness

Swapna Bikale, an Indian architect who works in London has had her visa withdrawn due to the immigration cap.

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Kai Ryssdal: Britain's Conservative Party wrapped up its annual convention today. Prime Minister David Cameron is trying to rally the party faithful. He's got a new austerity budget to sell. And, among other campaign promises, sharp limits on immigration.

Much as it does here, the immigration debate in the U.K. turns on jobs -- who gets to come in and what skills do they bring. By law, the Brits can't keep European Union workers out. They can cap the number of non-Europeans, though. But can they without hurting the key to the British economy -- London?

Marketplace's Stephen Beard reports.


Stephen Beard: In the Canary Wharf financial district, work is underway on a major new rail link called Crossrail. It will pass underneath part of the capital. But even before tunneling begins, the $25 billion project's hit an obstacle.

Jo Valentine is head of London First, a business advocacy group.

Jo Valentine: We need skills from overseas, particularly tunneling and engineering skills. And we're just going to do the project badly if we can't bring those people in to help us build Crossrail.

Crossrail could be a casualty of the immigration cap, and not the only one. Among others affected: This small London firm of architects.

Architect 1: Do you think it should be wider there or longer?

Architect 2: I would say that it might be better if it was a bit smaller.

Indian architect Swapna Bikale has worked here for almost a year. But because of the cap, her visa's been withdrawn. She'll be kicked out of Britain next month.

Swapna Bikale: Not being able to continue working just because of the visa's criteria and not based on your skill, it's very disappointing.

Beard: You feel rejected by this country?

Swapna: Yeah, a bit.

Swapna's boss James Burrell says her departure is a setback for his firm.

James Burrell: Because of the recession we were looking to develop our business abroad. We are currently looking into India. It's a growth marketplace and Swapna was going to assist us with that process.

London is the most globalized city on earth. Its banks, brokerages, law firms, accountants and architects do business around the planet. This city is constantly forging links with the rest of the world.

Woman 1: Ladies and gentlemen, we are now in Canada Square, the heart of Canary Wharf.

An official takes a group of foreign business people on a tour of Canary Wharf showing off the facilities. Back in her office, business advocate Jo Valentine frets about the cap on non-European immigration. She fears that it risks alienating some of London's most important customers.

Valentine: We also value our relationships with America, India and China, hugely. We want to do business with these places; we shouldn't be, by mistake, giving them the impression to people that we don't value them and don't want them in London.

But the Conservative Party, which is now in government, promised during the last election to curb immigration, pledging to cut the influx drastically from more than 200,000 migrants a year down to tens of thousands. You can't do that without a cap, says Conservative lawmaker Nicholas Boles.

Nicholas Boles: Our public services are under strain. Our communities are under strain, some of them. And we also have lots of unemployed British people with skills who we need to be getting into work.

But many of the businesses based in London say there are not enough smart, educated Brits to go around. They have to recruit from abroad. And foreign companies setting up here will always want to bring at least some of their own staff in.

Stuart Fraser chairs the local government committee responsible for London's financial center. He says the immigration cap will benefit London's competitors.

Stuart Fraser: We would see people move out of London to other cities where they can bring in people from around the world.

Beard: New York, for example, might benefit?

Fraser: Absolutely right, we're shooting ourselves in the foot, we're giving New York a hugely competitive edge.

London Mayor Boris Johnson: This is a great day for London!

Last year the Mayor of London launched the Crossrail project by driving in the first pile at Canary Wharf.

Johnson: Three, two, one, go!

He said the new rail link would make London even more attractive as a place to do business. But he too has now warned the government that its immigration cap could threaten this project and the prosperity of the capital as a whole.

In London, this is Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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