Capping immigration would damage the UK economy and skills base and was a ‘mad’ policy, according to Indian-born industrialist Lord Karan Bilimoria, founder of the Cobra Beer brand.

The independent Peer said the move would particularly damage the Asian catering sector, which was already struggling to find staff with the right skills.

He was speaking at the 30th annual charity dinner organised by the Shipley-based Aagrah Group, which also marked the 35th anniversary of the business which now includes 15 restaurants and a new range of cooking sauces sold by Tesco and Asda.

Lord Bilimoria told an audience of 400 business, community and charity leaders that the intention to cap immigration was short-sighted.

He said: “An immigration cap is a mad idea. Restricting the supply of people from overseas would mean that industry would suffer and especially this industry (catering and Asian restaurants) which can't get the staff it needs.”

Lord Bilimoria also criticised ministers for raising VAT to 20 per cent which he said hit the ‘squeezed middle’ and had dented demand for eating out.

“It was wrong to raise the VAT rate which hit those in the squeezed middle and many restaurants are suffering as a result,” he said. He also hit out at the UK Border Agency’s recent decision to revoke London Metropolitan University’s licence to teach and recruit students from outside the EU after it claimed that student attendance was not being monitored and that many had no right to be in this country.

Lord Bilimoria said that, while no-one supported illegal immigrants of ‘duff’ colleges, such an approach could seriously damage Britain’s ability to attract future successful entrepreneurs and leaders in other fields.

He said that during his 30 years in the UK, the view of entrepreneurs had changed from a ‘Del Boy’ image to becoming respected. He praised the family behind the Aagrah business for their hard work, commitment to education and family values that had led to the growth and success of what is now the UK's largest Indian restaurant chain with plans to double in size.

Bradford Council chief executive Tony Reeves said the local authority was working with employers to boost the district's skills base and crate work opportunities for more young people.

Its recently launched Get Bradford Working programme in conjunction with Bradford College, included an apprentice training agency which would train 400 apprentices in local businesses.

He said Bradford had many challenges, but also great potential. Over the past decade it had enjoyed the highest rate of new business start-ups in Yorkshire and was home to 20 national and international businesses, more than any city outside London. “Bradford has its challenges but it's up to the public and private sector to work together to build a healthy and stronger future and put the city where it deserves to be,” he said.