Cameron's business backers lobby against immigration cap

Some of the companies whose bosses publicly endorsed the Coalition Government's deep public-spending cuts have been privately lobbying ministers to relax the proposed cap on immigration to the UK. Microsoft, Asda, BT and GlaxoSmithKline were among 35 firms whose chief executive or chairman issued a public declaration of support for George Osborne's strategy on the eve of his government spending cuts.

One Downing Street source told The Independent: "Several of the businessmen made very clear at the same time they wanted us to sort out our policy on immigration." Ministers deny a trade-off between them and the company chiefs, insisting the two issues are separate. But they admit many businessmen are worried that the cap could prevent UK firms recruiting highly skilled workers, or switching their employees based abroad to this country.

David Cameron has begun to soften his stance. He told MPs that inter-company transfers "should not be included". His government has been lobbied by GSK, the healthcare company. Sir Christopher Gent, its non-executive chairman, signed the round-robin, and Andrew Witty, its chief executive, is a member of Mr Cameron's Business Advisory Group, which meets ministers to discuss business issues.

Two other members of the group also signed the pro-cuts letter: Philip Dilley, chairman of Arup, and Paul Walsh, chief executive of Diageo, which is not in favour of the cap. The statement was also signed by Andy Bond, chairman of Asda, whose chief executive Andy Clarke has written to the Immigration Minister, Damian Green, warning that the cap would prevent the supermarket firm recruiting staff for the pharmacies in its stores.

Gordon Frazer, managing director of Microsoft UK and Ian Livingston, chief executive of BT Group, also signed the letter. Both companies are understood to oppose the cap. Lord Wolfson, the Tory peer who drew up the letter and who is chief executive of Next, does not support the policy but has not lobbied ministers about it. The Conservatives pledged to restrict net migration from outside the European Union to tens of thousands each year. It stood at 196,000 last year.

Liberal Democrat ministers, including the Business Secretary Vince Cable, are pressing for a relaxation of the Tory policy. The Home Secretary, Theresa May, will today set out the Government's direction of travel but its final decision on the cap to apply from next April is not expected until next month.