The Conservative Party has rejected calls to restrict foreign takeovers but will push ahead with moves to curb the level of foreign workers in the UK, as the party unveils its election agenda.

In one of the measures most closely watched by City advisers, shadow business secretary Ken Clarke rejected Labour proposals to raise the threshold to secure shareholder approval for corporate takeovers and moves to cut voting rights of short-term shareholders such as hedge funds.

The pledge from Clarke (pictured) in an interview published today (14 April) in the Financial Times comes despite calls for reform of the UK's liberal M&A regime in the wake of the takeover this year of Cadbury by US food group Kraft.

The Labour proposals had been unpopular with deal professionals who argued that any move to restrict M&A activity would damage the City's position as a financial centre.

One M&A partner at a leading City practice told Legal Week: "[Labour's] proposals are ill-thought through and totally miss the point – none of the changes would have made the slightest bit of difference in the Cadbury takeover. This is a classic piece of interventionalist politics ending up with the law of unintended consequences."

The launch yesterday (13 April) of the Conservative Party manifesto included contentious proposals to introduce a cap on the numbers of non-European Union workers in the UK. Such a move will be unpopular with large law firms, which have in recent years recruited heavily from Australia, New Zealand and South Africa.

Tony Haque, immigration associate at Baker & McKenzie, commented: "A cap is not something we are familiar with in the UK but we could certainly look to the example of the US where they have had a quota system for over 20 years. [But] the cap has caused problems for law firms as it creates a climate of uncertainty for them when deciding who and how many people they can hire."

As expected, the Conservative manifesto confirmed proposals to hand over much of the powers of the Financial Services Authority to the Bank of England, a move which has divided City opinion.

Ashurst financial institutions partner James Perry commented: "The reality is this is more a case of moving deckchairs than real substance – the direction of regulation in the UK is not going to change. Both of the main parties will take a broadly similar position because they have to. Global and European pressures will dictate that."

Policy commitments from the Conservative Party will be followed closely by City professionals with the party remaining the favourite to win the general election on 6 May. A recent Legal Week poll indicated that the Conservatives will enjoy strong support from the legal profession, with many senior lawyers deserting Labour in recent years.

The Labour Party issued its manifesto on Monday (12 April). Key business policies included the creation of a green investment bank to boost environmental businesses and moves to force institutional shareholders to declare how they vote.

• Click here for a briefing on the Labour Election manifesto from Clifford Chance.