Government's migration cap is a 'big barrier to growth', says Lord O’Donnell

The Government’s migration cap is a “big barrier to growth”, Britain’s former top civil servant has said.

Lord O’Donnell accused the coalition of “shooting itself in the foot” over the policy, which sees immigration from outside the EU limited.

The retired former head of the Civil Service said that vital skilled workers, who would benefit Britain’s economy, were being shut out. He also accused ministers of failing to drive through policy.

“The first thing the Government can do to help growth is to stop shooting itself in the foot,” he wrote today. He added: “A big barrier to growth is an immigration policy that deprives the UK of skilled workers in certain disciplines. Lord Heseltine ... clearly sympathises with the difficulties that businesses face recruiting these workers.”

Attacking the annual cap of 20,700 skilled migrants from outside the EU, he wrote: “we cannot restate often enough that the UK has benefited from being an open economy which welcomes foreign investment.”

And he called on bureaucrats to “drop the meaningless jargon…and concentrate on making our bureaucracy fit for the 21st century”.

His article, which appears in today’s edition of The Times, was broadly supportive of the growth plan suggested by Lord Heseltine yesterday but argued against his claim that Whitehall is blocking devolution to the regions, writing: “This is not true. I have argued passionately that we need a more devolved system.”

He agreed with Lord Heseltine that Whitehall departments need to pay market rates to attract the top talent and backed his call for a national growth council.

Lord O’Donnell, who worked under Tony Blair, Gordon Brown and David Cameron, also argued that the world of Whitehall has become more diverse, writing that civil servants are “drawn from more diverse backgrounds and more have specific professional expertise”.

He also gave his backing the Prime Minister’s calls to measure happiness as well as GDP when looking at Britain’s growth. He wrote: “there is much more to life than GDP. We need to create a more equal society with an emphasis on the wellbeing of its citizens.”