Speaking in support of Mr James at a special immigration hearing in London, Sir Herman said that Jack Straw would "damage British race relations" if he insisted on removing the commodities broker from the country.
Sir Herman, who has never given evidence in an immigration case before, described Mr James as a "model citizen" and said it was in the public interest that he was allowed to stay in the country where he has lived for 16 years.
He said: "I don't think it would be conducive to promoting tolerance if we are seen not to be using the discretion available to us to show compassion in a case like this. I think when you are Secretary of State for Home Affairs, with responsibility for race relations, you have to look at the bigger picture and take into consideration the benefits that come to society as a result of your decision and the disbenefits."
Mr James, 30, was brought to Britain by his father at the age of 14 and enrolled in a private school. Two years later he was forced to leave school and fend for himself when his family failed to pay his fees.
Sir Herman said that, through his hard work and positive attitude, Mr James, from London, had become a role model for young black men. He spoke of his fury when Mr Straw ordered Mr James be detained for deportation earlier this year. "I was so angry that I considered resigning there and then," he said.
Sir Herman was persuaded not to resign by friends, but will stand down at the end of this year for personal reasons.
Mr James's fate now lies largely in the hands of the Chief Immigration Adjudicator, who will hear the remainder of the evidence next month.Reuse content