28 Jul 2010

Cameron in India: migration debate exposes coalition cracks

They say a stressful holiday can test the sturdiest of marriages. And so it is with the coalition’s odd betrothal.

In their mission to wrap India’s booming economy and Britain’s need to export more into two mutually stabilising coils of DNA, yet more internal debate has been fomented, this time over skilled migration. Vince Cable made comments to the Indian press expressing concern about his proposals for a permanent cap on non-EU immigration. As an interim measure the cap has been set at 24,100 this year.

Right now there is an ongoing consultation about the nature of the permanent cap that will kick-in in April. Remember the context: the cap is a Conservative manifesto commitment. The Liberal Democrats wanted an amnesty. This is where the India trip focussed minds.

Indian businessman, politicians, and commentators have been united in their concern and hostility to proposals to restrict migration from India to Britain. Similar restrictions may have damaged the relationship with India in the 1970s, and led a new generation of Indians to look to the US rather than the UK.

On a number of occasions on this trip when I have raised the issue of India opening up its markets to Britain, Indian businessmen have replied that freer movement of people is an essential part of the relationship.

The issue is particularly keenly felt in the rampantly successful Indian IT industry. There the heads of Infosys, Wipro, and TCS believe that restrictions on their software engineers is a form of backdoor protectionism as damaging as an unfair agricultural tariff.

So what we have is a business department taking very seriously the injunctions of the prime minister on forging a special relationship with India’s business elite. And a Home Office which understandably wished to fulfil the mandate to cut immigration.

So somewhere lower than 100,000, but higher than 24,100. Exactly where David Cameron decides the compromise lies will say a lot about this coalition. And they’ll be listening hard in India. For now the difference of opinion is clear.