The Government's visa rules are a "blot" on Britain's reputation, leaving the country looking "nasty" to the outside world, Chancellor George Osborne's father-in-law has protested.
The former Cabinet minister Lord Howell of Guildford warned that business people were being deterring from travelling to the UK by the "jungle of regulations" they encountered.
Students were almost in "despair" at the restrictions being imposed on them, he added.
He was speaking after a Lords committee he chairs protested that immigration policies were damaging Britain's world standing.
Lord Howell told the BBC: "All our witnesses who came before us . . . said the visa policy and some of the handling of immigration policy was creating rather a blot, creating a nasty Britain feeling."
It was not the first time Lord Howell has embarrassed the Chancellor. In 2012 he was recorded claiming that Mr Osborne was leading a covert push to dismantle the Government's commitment to wind farms as David Cameron "does not understand the issue".
The Tory peer also faced condemnation in July when he suggested "fracking" should be limited to the North East of England as it has "large and uninhabited and desolate areas".