Prime Minister David Cameron returned home from his India visit on Friday and flew straight into a row over his plans to cap immigration from non-EU countries.
Leading British businesses were reported to be “furious'' that work permits allotted to them for the next eight months, pending introduction of an annual cap next April, were a fraction of their actual requirement.
Some complained that their allocation had been reduced to “zero'' and they would not be allowed to hire any non-EU staff at all for the rest of the financial year.
A spokesperson of London First which represents some of Britain's biggest companies called it an “economically insane'' decision.
According to a report in The Financial Times, the issue threatened to turn into an “open conflict'' between British businesses and the government. It said there was fury in financial circles with major business groups threatening to leave Britain in protest.
“I've had conversations with people who are saying, ‘if they are going to make it this hard for us, then we'll just go offshore','' said the head of a leading immigration practices.
Law firms representing large multinational corporations said many of their clients would be given only a “handful'' of work permits — and in some cases “none''.
“We have a number of international financial institutions whose allocation has been reduced to zero,'' said John Skitt, head of immigration at a global law firm.
The government itself is deeply divided with its coalition partners, the Liberal Democrats, opposed to the idea of a rigid cap. Business Secretary and a senior Lib Dem figure Vince Cable made his unhappiness known during his India visit saying he favoured a more open immigration policy. Some Conservatives have also criticised the move arguing that it would hurt relations with countries like India and China.
India has warned that it would have an “adverse'' effect on relations forcing Mr. Cameron to promise a flexible approach while implementing the policy.