Speaking at a Liberal Democrat conference fringe event last night, Cable discussed the Home Office attempts to curb the international student industry, saying the Government was "pulling in opposite directions" on the issue.
This would only be detrimental to the number of top foreign students the UK would be able to attract, he said in the meeting which was hosted by the
Association of Chartered Certified Accountants(ACCA) and the New Statesman.
Australia and America were now attracting students that may have once considered studying in the UK Cable explained, mostly due to their more relaxed schemes.
Cable wanted to see a reduction in the regulation surrounding immigration but warned that the coalition's Immigration Bill measure that required landlords to check the immigration status of tenants "cuts against our policy of reducing red tape".
He feared that any NHS levy on tourists or visitors would end up imposing a "significant" cost on a huge number of people who don't use the health service at all.
He believed that immigration added to the per head income of the UK and that the arrival of people who were more flexible in both life and work had a positive impact on Government budgets. He conceded that this positive effect was only a short term legacy.
Problems arose, he explained, when discussing the political consequences "of which we are well aware" he said. The pressure on certain parts of society and on real wages was apparent and genuine negative side effects needed to be acknowledged he added.
The cross party consensus was that immigration needed to be managed Dr Cable said and reminded the audience that nobody was arguing for open migration. How migration was managed was a key issue he admitted and the "awkwardness" of the Government's current position was down to "misunderstanding" he said.
Cable warned against using the term "illegal immigration" as a catch all for all feelings around the debate and described how a constituent in 2010 had opened his eyes to misguided views about immigration.
The Conservatives had a separate objective when it came to immigration Cable announced and reassured delegates that keeping net migration below 100,000 was not Government policy.
Additionally, statistics used to explain net migration were "perverse" Cable explained as emigration was much lower currently.
Asked by Dr Christian Dustmann, the Director of the Centre of Research and Analysis of Migration, why the Government's aggressive policies had been allowed to continue, Cable suggested that the immigration situation would have been far worse without the Liberal Democrat presence in the Coalition.
Having seen various earlier drafts of proposed Government policies, Cable said “it could have been a great deal worse I can assure you."
He described public opinion on the issue as "absolutely toxic" and that it was hard to make a rational case. Cable called for calm on the issue and for politicians to continue to make the "economically rational" case for immigration.
Dustmann pointed out that the UK was the only country with a net migration target, or even to have ever to have introduced such a target. An overly bureaucratic immigration system meant policy would react too slowly to changes in demand from employers, he argued.
Neil Stevenson, Brand Executive Director at
ACCA, pointed out that an industry such as accountancy needed to be mobile in order to support business.
He believed that international education was a vital part of the UK economy and was concerned by statistics that had recorded a recent fall in foreign students studying in the UK of 17 per cent.
The current approach just wasn’t good for generating opportunity he said.
Immigration was a valuable tool and great for career development Stevenson told colleagues and explained how important it was to cultivate a global outlook in people. People who had had positive experiences abroad were far more likely to develop positive trade positions towards those countries.
The UK's future as a centre of international trade was under threat from places in South East Asia and East Africa and restrictions to immigration would not help the UK's case.
"A cap on immigration is a cap on growth" he stated.
Dr Adam Marshall, the Director of Policy and External Affairs at the British Chambers of Commerce, agreed, saying OBR evidence supported this.
All politicians were of the same view about immigration, but were often too scared to say so he said.
Marshall said businesses believed that they were losing "future cheerleaders" in markets around the world by facing restricted immigration into the UK.
The impression of the Home Office was that it was "anti-business" he said.