`UK’s sturdy position in global fund management industry under threat’ 17th September 2010: Soon after Lib Dem Business Secretary Vince Cable again raised his voice against immigration cap, top industry executives have joined in to say the UK’s sturdy position in the global fund management industry was under threat.
They said it would receive a direct hit from government plans to curb immigration, and higher tax, along with competition from rival financial centres.
The speakers at the Financial Services Authority conference in London said the cap could see talented traders exit Britain and firms shift operations to lower-cost countries with lighter regulations.
Chief executive of funds industry body the Investment Management Association (IMA) Dick Saunders said the traffic lights were flashing red on tax and rhetoric around immigration. The risk was not that big firms would get up and move leaving empty offices in Canary Wharf. The risk was rather one of attrition, of seepage, that individuals will move and functions will get off-shored.
Law Society chief executive Desmond Hudson has already said just when they were pulling themselves out of a crippling recession, imposing the cap now would strangle City law firms and in turn hit the businesses they act for.
By imposing a cap, there was a mistaken assumption that there would be lawyers of equal expertise in the UK and EU. But it was often the knowledge of a particular overseas jurisdiction which was of value to a firm."
Bringing to the fore the risks of severing links with the world’s largest economies, including China and India, the Law Society argued that migrant lawyers were making a significant contribution to the UK economy.
Baker & McKenzie business immigration specialist lawyer Tony Haque said the Government made an election promise to reduce immigration and, while business immigration was not the main problem, it was focusing on this area because it was easiest to reduce.
Shadow home secretary Alan Johnson too only recently lashed out at the government for its move to bring about immigration cap.
Johnson said the government’s recently announced ‘cap’ would affect less than a third of 1 per cent of those coming to “our shores.
As of now the Government is gearing up to implement the cap on the number of immigrants. It is insisting highly-paid professionals would not be affected by the ceiling.
Johnson insisted the points-based system “works” and the government “is foolish to pretend they can improve its effectiveness with an arbitrary cap."
The Chartered Institute of Personnel and Development also believes the sharp decline in the number of work-related visas showed the points-based system was "robust and working".
A further cap on net immigration would only leave many employers facing significant skills gap.