Immigration restrictions are inflicting terrible damage on British universities and businesses, Chris Cummings, chief executive of TheCityUK, told a ConHome fringe meeting.

Cummings said British universities have already lost their students from India and “American universities are cleaning up”. He warned that this will have severe consequences when these students reach senior positions and make investment decisions: they are far more likely to choose the country they have become fond of in their youth.

In business, Cummings said, “major international organisations used to send their brightest people here to learn how to do things”, but “not any more”. And at the top, he added, it was essential for businesses in Britain to be able to recruit the best people from around the globe.

The solution, Cummings suggested, is the use of the term “business visitors”, not “immigrants”, to describe people who only want to work or study in Britain for a few years.

His warning came during a meeting to discuss “The UK in a Global Race: Competitiveness of UK financial services”.

Greg Clark MP, the Treasury minister responsible for the City, said it was “a no-brainer” that we wanted to restore our financial services sector to health. In recent years its difficulties had depressed our growth figures, and it makes a major contribution to many different parts of the country: “The biggest private sector employer in Dorset is J.P.Morgan. Deutsche Bank has substantial operations in Birmingham and Citibank in Belfast.”

Clark outlined the extensive regulatory changes which are designed to restore the City’s reputation for “integrity, trust, probity” after the banking crisis and scandals such as Libor.

But Andrea Leadsom MP, a member of the Treasury Select Committee with over 20 years of experience in banking, said “the absolute pure air of competition” was needed to sort out the banks: “competition is everything”.

She pointed out that no bank has been allowed to fail, and there are barriers to setting up new banks. Nor do customers put pressure on banks by moving accounts: there is a greater likelihood of getting divorced twice than of changing one’s bank.

Leadsom declared her faith in Clark: “Greg is a superb City minister. He shows the most amazing insight, basically because he agrees with me.”

Clark remarked, “It’s always advisable to agree with Andrea.” But he used the word “regulation” more often than “competition”.

The fourth member of the panel, Syed Kamall MEP, who is a member of the European Parliament’s economic and monetary affairs committee, said it should be “unacceptable” that banks in Europe are still being bailed out.

But when you asked financial services companies if they wanted to leave the EU, you got different voices. One of the insurance companies had told him that leaving would cost a thousand jobs. But private equity and hedge fund groups said it was time to “get the hell out” of the EU as “it’s really restricting our business”.

Cummings said that in a survey of 147 investment location decisions carried out for TheCityUK, one of “the clearest reasons” why investors choose Britain is “for access to the single market”.

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