Jan. 25 (Bloomberg) -- U.K. Home Secretary Theresa May blocked a bid by the Treasury to relax immigration rules in a clash between Conservative members of the coalition government, said three people familiar with the matter.
May was concerned the Treasury proposal to increase the number of so-called highly skilled foreign employees risked a political backlash if it was included in the Dec. 5 Autumn Statement by Chancellor of the Exchequer George Osborne to Parliament, the people said. She made a speech a week later in which she said immigrants push wages down and house prices up.
The clash illustrates how the slowing economy has stoked tensions among David Cameron’s Conservatives. May, a Tory, has previously tussled on immigration with Business Secretary Vince Cable, a Liberal Democrat, who favors easier access for skilled workers and students. It’s the first time Osborne’s Treasury sided with the Liberal Democrats on the matter.
Cameron ran for office in 2010 on a pledge to reduce immigration by the “tens of thousands.” The Treasury sought to relax the rules to encourage economic growth, said one person with knowledge of the matter.
The Treasury declined to comment on the decision, saying that Osborne backs the government’s policy on immigration. The Home Office also declined to comment on the disagreement and said it wants to prevent abuse in the immigration system while trying to attract the most skilled workers.
May said in the Dec. 12 speech that with annual net migration into the U.K. at 183,000, there’s still some way to go to achieve her goal of reducing that to less than 100,000 by 2015. She said that “uncontrolled, mass immigration displaces British workers, forces people onto benefits and suppresses wages for the low paid,” whereas controls mean “you can attract the brightest and best who genuinely contribute to our economy and society.”
The home secretary, who determines immigration policy, also announced in the speech she’d move ahead with plans to interview more than 100,000 would-be students before granting visas to attend colleges in the U.K.
Business groups including the Confederation of British Industry and the Institute of Directors say the government’s stance on skilled migrants and students may hurt the economy because it prevents companies from hiring the best workers.
“It’s vital for Britain to be seen as open for business,” Neil Carberry, the CBI’s director for employment and skills, said after May’s December speech. “Employers need a system which doesn’t just control migration but attracts the skilled workers the economy needs, who would otherwise go to our competitors.”
In the year through June, Britain issued 21 percent fewer visas for study than a year earlier, according to data from the Office for National Statistics.
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