SLASHING immigration after Brexit could result in businesses collapsing and jobs being lost, the head of the CBI has warned.

Carolyn Fairbairn said if the Tory government proceeds with plans to reduce the number of low-skilled migrants, it could have the same effect on the economy as the oil price shock in the 1970s.

Last month, speaking at the CBI conference, the Prime Minister said her new immigration system would stop EU workers being able to “jump the queue” to get into the UK and would instead be based on skills rather than where migrants come from.

Fairbairn told The House magazine: “We do have real concerns about a rhetoric and a policy from government that appears to be shutting off, or indicating they will shut off, all so-called low-skilled people coming into the UK.

“The impact of doing that would be so damaging for our economy and I think it is underestimated how big a shock that would be. Some have equated it to the oil price shock of the 1970s.”

If the change happened “overnight” it would see “businesses go under and we would lose jobs rather than create jobs for our population”.

She added: “I do think we need to be incredibly careful about the language we use.

“The idea that we would be talking about EU workers in our country in derogatory terms I think is something that certainly our business community would really like to see stop.”

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Fairbairn, however, did tell the magazine that businesses backed the deal being put up by May.

But yesterday there seemed little sign of any sudden groundswell in support of the Prime Minister’s deal from MPs.

With only four days until the meaningful vote on the Withdrawal Agreement and the Political Declaration in the Commons, it’s thought the Prime Minister still needs to convince another 100 MPs to have any prospect of winning.

One MP she won’t have to try too hard with is Stephen Lloyd, who yesterday quit the LibDems so he could back the deal.

“I have come to the conclusion that I cannot honestly uphold the commitment I made ... to accept the result of the referendum, vote for the deal the Prime Minister brought back from the EU and not back calls for a second referendum whilst supporting the LibDem parliamentary party’s formal position of voting against Theresa May’s deal and advocating a people’s vote,” he said.

Meanwhile, former prime minister Tony Blair suggested May should pull next Tuesday’s vote, rather than risk a humiliating loss.

“Personally, I don’t see what the point is in going down to a huge defeat,” he said.

The prospect of delaying the vote was supported by Sir Graham Brady, the chairman of the 1922 Committee of backbench Tory MPs.

He said he would welcome the vote being deferred if no solution could be found to differences within the party over the backstop.

The influential MP told BBC2’s Newsnight: “I think the most important thing is to have clarity about how we might remove ourselves from a backstop ... if we were to enter into one in the future.

“It’s having the answer to that question of substance that is most important, not the timing, so if that question can be answered in the course of the next few days then all well and good.”

Chief whip Julian Smith acknowledged he faced an “uphill challenge” to persuade MPs to back May’s deal, but insisted that “it’s all to play for” and that there was no plan B.

Asked if May would survive to the end of the month, Smith said he was “confident Theresa May will be the Prime Minister after the meaningful vote and will be the Prime Minister at and after Christmas”.