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Cameron's choices for advisory group raise a few eyebrows

Published 01/10/2010

Having enjoyed the support of so many business figures during the election campaign, particularly on the issue of national insurance increases, the Prime Minister is no doubt keen to keep on their right side during his term of office.

The launch today of a 'Business Advisory Group' for 10 Downing Street will help with that, even if David Cameron's publicly stated intention in appointing these figures is slightly different.

Still, while there is no doubt that all of the business leaders on the taskforce will be able to offer some valuable insights into concerns or opportunities arising in their particular industries, the long list of advisers includes a few names that may raise eyebrows.

Take Sir Martin Sorrell, the chief executive of WPP. The founder of what is one of the world's largest advertising and marketing companies, his business credentials are not in doubt. But his decision to move the headquarters of WPP to Dublin two years ago to save on tax leaves a rather sour taste in the mouth.

Then there's Paul Walsh, the chief executive of drinks company Diageo. It is still based here, but Mr Walsh's membership of the taskforce will give him ample opportunity to repeat privately to Mr Cameron what he has been saying publicly of late: that any adverse changes to the corporation tax regime might prompt his company to go elsewhere too.

One might argue it is to Mr Cameron's credit that he is prepared to seek the counsel of those who have chosen to be confrontational about particular policies. The row over the appointment of Sir Philip Green as a government adviser, despite his well-documented tax avoidance strategies, does not seem to have put the Prime Minister off making further appointments that have potential for embarrassment.

However, Mr Cameron will be aware that one criticism of his predecessors in government was they were too often cravenly subservient to the interests of big business - most notably in the failure to properly regulate the banks, but in plenty of other instances too.

In that context, some of his new advisers will be uneasy bedfellows.

n All that said, the Government so far shows little sign of listening to the complaints of employers about its immigration policy. A row has broken out with businesses moving from an assumption that no government would implement rules so rigid they would be prevented from hiring sufficient numbers of highly skilled workers to saying that this is exactly what has happened.

Employers had hoped the Conservatives' tough talk on this subject was intended to address general public anxiety about high levels of immigration rather than to catch out companies that, for whatever reason, have discovered skill shortages in certain areas.

However, it is becoming clear that some firms are finding it difficult to cope with the system the Conservatives have introduced. We know this because Vince Cable, the Business Secretary, said so a fortnight ago. And though the Treasury dismissed his warnings, they were repeated yesterday by the Confederation of British Industry.

A permanent cap on immigration is not due to be introduced until next year. But, mindful of the risk that people might rush to get in before then, the Government introduced an interim arrangement in July. This arrangement, says the CBI, is so inflexible that companies are already finding it difficult to keep hold of foreign staff and to recruit new specialists.

This is not an auspicious beginning for a flagship government policy.

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