The Government-imposed limit on immigration could pose a risk to the UK recovery, a prominent business group has told Sky News.
David Frost, director general of the British Chambers of Commerce, told Jeff Randall Live that it was not a good time to close the door on workers who could play a role in rebuilding Britain's fragile economy.
His warning followed an announcement by Home Secretary Theresa May of a temporary cap on the number of migrant workers allowed into the UK from outside the EU.
Mr Frost told Sky business presenter Anna Jones: "We need to be careful that at a time when we need to get all the growth we can in the UK economy that we remember the needs of British business.
"The City for example... relies on a pool of global talent; specialist engineering companies working in the North Sea, those vital new science and innovation companies (all) rely on getting their employees from across the globe. We can't stop that."
On a day which saw the Government signal cuts to benefits as it seeks to reduce the budget deficit, Mr Frost also called for changes to the welfare system.
"We need to look at the whole picture and of course what is happening is, because many of the local employees don't have the skills, don't have the work ethic, then of course businesses are turning to Eastern European migrants and you can't reform migration without reforming the benefits system.
"Too many companies report through to me that they offer the job to the local person but they say 'It's not worth it - I get more money on benefit' and therefore immigration has got to be tackled hand and hand with welfare reform."
Mr Frost's views on the potential economic impact of an immigration cap echoed a warning from shadow home secretary Alan Johnson.
Mr Johnson told Sky News companies could take their business elsewhere if they were banned from hiring the skilled workers they need.
"The people we're talking about here are the people the economy needs in order to grow in very difficult economic times... At best this is a gesture, at worst this is a deceit," he said.
The restrictions mean that just over 24,000 workers from outside Europe can enter the country this year - 5% fewer than last year.
The measures are intended to prevent a spike in workers heading to the UK before the introduction of a permanent limit next year.
Defending the move, Mrs May told Sky News: "We need to introduce this limit. Immigration has been good for the UK but uncontrolled immigration isn't."
The Liberal Democrats, who are part of the coalition government, opposed the Conservatives' policy during the election campaign. Source: Sky News
This month a cross party group of MP’s signed an Early Day Motion (EDM) calling on the UK Government to abolish ‘flawed and rushed’ legislation brought in by the previous administration requiring overseas students wishing to study English in Britain to first pass an English test.
The new coalition Government has slashed a £75m programme to help 50,000 young unemployed people enter the adult social care workforce, in a move condemned by a leading care provider.
The Highly Skilled Migrants Forum and the Joint Council for the Welfare of Immigrants (JCWI) argued that the cap would be unworkable and could damage the economy. The forum warned that a curb on international students would put at risk the £12bn a year generated by their fees.
The Home Office should take care that we do not scare off talented migrants and fee paying students who bring in over £12 billion in fees to Universities and colleges. Australia and Canada are waiting in the wings ready to grab skilled migrants take our share of the lucrative student market.
See also:
Home Office confirm UK migration limit
Early Day Motion calls on UK Government to scrap new Tier 4 student visa rules
UK Government scraps social care recruitment incentives
Lib Dem defends temporary cap on non-EU migration
Immediate cap on non-EU migrant workers to be introduced by Home Office
Immigration cap ‘would damage hospitality sector’ say REC
Cameron’s immigration cap ‘will strangle Britain’ say JCWI
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