Migrant cap will hurt City’s competitiveness

As people across the nation count down the days to the London 2012 Olympics, final preparations for another great sporting festival are being made over 4,000 miles away in India. Much like the organisers of London 2012 hope to leave behind enduring sporting, cultural and transport legacies, the 2010 Commonwealth Games in Delhi have been a catalyst for improving infrastructure across India’s capital city.

The developments across Delhi, and India more generally, reflect the country taking up its rightful position on the global stage as the world’s largest democracy and an increasingly vibrant economic player. I look forward to witnessing this progress first hand when I lead a City business delegation to Delhi and Mumbai in late October.

Last week’s trade visit to the country by ministers and business leaders underlined this fact by highlighting not just the longstanding ties between the UK and India but the potential for a much closer and deeper partnership.

I echo David Cameron’s sentiments that we cannot rely on “shared history for a place in India’s future”. We must work hard to show how this partnership benefits both countries, particularly in trade and investment. The UK is the biggest European investor in India and India is the biggest Asian investor in the UK. This relationship brings mutually beneficial investment flows, with bilateral trade standing at £12.6bn. The London Stock Exchange hosts over 50 Indian companies and over 600 Indian firms are represented in the UK. In 2008, almost 4,000 new jobs were created in the UK by Indian investment and many more because of the activities of UK firms in India.

In order to build on this success, however, we must practice what we preach when calling for India to reduce trade barriers in sectors such as financial and professional services.

The UK has a history of openness to investment, and to the flow of highly skilled workers. The introduction of an annual cap on migrants from outside the EU entering the UK risks damaging the competitive position of the UK, by undermining the efforts of City firms to attract the best talent, regardless of their passports. Immigration is an emotive issue. Of course I understand politicians need to respond to broader public worries about its impact on jobs and communities. But the City operates in a global business environment and our competitive position will be damaged if international firms based here – including the growing number of Indian firms – do not have the flexibility to recruit the best person to build their operations.

If we have to turn away people from India and other non-EU countries just because we have reached a numeric ceiling they will not wait around until the next year’s quota. They will locate to places that welcome their talents. We cannot afford to send mixed messages if we are to be the partner of choice for India’s prosperous future, rather than simply part of its shared history.

Nick Anstee is Lord Mayor of the City of London.