Minister denies rule switch will scupper migration cap

Net migration to the UK stood at 196,000 last year

The government's decision to exempt thousands of workers from its immigration cap will not scupper its pledge to at least halve the UK's population growth, a minister has said.

In a surprise move on Wednesday, David Cameron said intra-company transfers would be exempted from the cap.

The majority of skilled non-EU migrants come in through this route.

But minister Damian Green said it would not stop the government cutting net immigration to "tens of thousands".

Last year, net immigration to the UK stood at 196,000.

Mr Green told BBC Two's Newsnight the government was still committed to more than halving that within five years - and he suggested there would be further curbs on international students and family reunions once the new cap on skilled workers was in place.

"Once we have got this limit on, we are going to look at the student route, and we are going to look at the family routes, because you do have to bear down on all types of immigration to hit the tens of thousands," he said.

'Unravelling'

The government has been accused of allowing Indian IT companies to bring in cheap labour through intra-company transfers, shutting UK graduates out of the jobs market.

But Mr Green said that intra-company transfers should only be for managers and senior staff, adding: "You need to look quite carefully at who is coming in".

And - fleshing out some of the details of Mr Cameron's announcement - he said not all transfers would be exempted from the immigration cap - just ones below a certain salary level that was yet to be decided.

"He (Mr Cameron) is not exempting any intra company transfer at any salary level," he told Newsnight.

On Wednesday, a report by the Commons Home Affairs Committee said the government could not meet its net immigration target without including intra-company transfers in the cap.

Angry backlash

Shadow immigration minister Phil Woolas, for Labour, said: "As we predicted, this policy is unravelling before our eyes, with coalition ministers at war behind the scenes. The government needs to go back to the drawing board and rethink the whole policy."

The majority of skilled workers entering the UK from outside the European Economic Area come in on intra-company transfers. In 2009, they accounted for 22,000 out of a total of 36,490 skilled migrants.

The decision to exempt intra-company transfers is being seen as a victory for Business Secretary Vince Cable who has been pushing for greater flexibility.

There was an angry backlash from business and higher education over the cap, amid claims it would harm Britain's competitiveness.

A temporary immigration cap of 24,100 will be replaced by permanent measures from April 2011.