By Tim Starkey |Liberal Democrat Voice: Published 27th May 2010 – 2:20 pm

The most illiberal policy in the Lib-Con deal is the plan for a cap on immigration. Now, we all know that as part of a coalition we have to put up with policies we dislike, the real problem with this policy is not just that we dislike it but that in the words of the IPPR, it is “unworkable” (see “The Limit to Limits: is a cap on immigration policy a viable policy for the UK?” March 2010). Here’s why:

1) A cap is a clumsy, inflexible mechanism, owing more to Soviet style central planning than to the needs of a free market economy. It will require governments to predict in advance each year what the needs of business will be, and thus what will be an acceptable limit for immigration. Inevitably, as the Soviets found, these matters are best left to the market. The question that has never really been answered is what happens if the cap is reached early – say in August or even June? Presumably, at that point all businesses will need to stop recruiting until January of the next year.

2) Limiting numbers in this way could have a damaging impact on our universities. Many universities depend heavily on fees from foreign students – if that income stream is severely reduced then there will be even greater demand to increase tuition fees for domestic students.

3) The NHS too could suffer badly. In 2008 the General Medical Council produced statistics showing that out of 243,910 registered doctors 91 000 had qualified outside of the UK and 68,886 outside of the European Economic Area.

4) As Nick pointed out repeatedly in the election campaign, most immigrants are either from the EU or asylum seekers and so could not legally be included in this cap. As such the policy would do little to bring net immigration under control in any event.

I don’t write any of this in order to undermine the coalition agreement that I believe is an excellent deal for Britain. I write this because I would like the coalition, and above all, the Conservative ministers in it, to think again about this policy. It goes against every liberal, free market principle that our two parties share.