The downside of economic growth is that it provides grist to Ukip's mill

It's because the UK economy is motoring that immigration is up. The opposite would be worse
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The Independent Online

Take your pick: a sluggish economy and low inward migration, or a booming one and a lot of people coming for work. The great debate about immigration to Britain, a debate at the centre of our politics, as we are seeing in the European elections, largely ignores the relationship between immigration and economic success.

Last Thursday, just as Britons went to the polls, new figures showed that 201,000 citizens from other European Union countries came to the UK last year, of which 125,000 came for work, an increase of 43,000 over 2012. This was billed as bad news for the coalition. But during that year the thick end of 750,000 jobs were created in the UK. Jobs were also created in Germany but every other large economy in Europe lost them, so it is unsurprising that there should be a big inflow of job-seekers from these less vibrant economies. Notwithstanding these migrants, the UK still managed to cut its unemployment rate to below 7 per cent, a level that, a year ago, the Bank of England did not expect to be reached until 2016.

This year there are signs of an economic recovery in Europe, and they are most welcome. But even the most optimistic forecasts for the eurozone as a whole suggest that it will be pushed to grow at more than 1 per cent, whereas the UK should manage something above 3 per cent. Over the past 12 months, it has been 3.1 per cent. The UK and Germany will remain the two strongest job markets for some time to come.

Against this economic truth is the widespread feeling that, to use the words of Gordon Brown, there should be "British jobs for British workers". He said that in September 2007, near the top of the boom, not in response to the subsequent slump – and, politics being politics, was roundly attacked for it by the then leader of the opposition, David Cameron. Yet the reality is that no politician in a functioning democracy, be it a member of the EU or not, can ignore these concerns. So what should they do?

Well, the first thing, surely, is to make this simple point that, if the economy is growing, it will attract immigrants. We need the economy to grow to help cut the deficit and fund government services. The faster it grows, the greater the tax revenues and the less the pressure to make spending cuts. True, a rising population will require public services so the state's costs go up, too. But it is vastly easier to crank greater efficiency from the public sector in a time of overall growth than it is in a time of overall decline.

There is a further point. British job-seekers may feel uncomfortable at having to compete with immigrants from Europe, but think what it is like for young Italians, Spaniards – all the other young EU workers – to have to leave their country to get a job. You come out of school or university and, just because you happen to be hitting the job market at a time of slump, you are at a huge disadvantage vis-à-vis people who got their first jobs 10 years earlier or maybe 10 years later. That disadvantage may last for life. Young Britons may feel unlucky at facing more competition but they are vastly more fortunate than their counterparts almost everywhere else in Europe.

To explain, however, is not enough. One of the troubling aspects of our labour market is that while we are still in the early stages of an expansion we are already starting to hit skill shortages. Large companies can cope. They train people up, support them through various vocational qualifications, or, less helpfully, poach them from smaller competitors. Medium and smaller enterprises complain, reasonably enough, that they can't get the people they need. Unsurprisingly, well-qualified people from other EU nations help to fill the gap. Yet we still have the intractable problem of the long-term unemployed.

Actually, it was this problem that Gordon Brown was seeking to tackle when he used that "British jobs" phrase. His speech was about equipping the long-term unemployed to do the jobs needed in an increasingly skills-based economy. That was more than six years ago. We have made some progress but clearly not enough.

It is trite management-speak to say that a threat is also an opportunity, but it should surely be welcome that we have the opportunity, in all probability, of several years of decent economic growth, during which time we can seek to equip people better for the jobs on hand. We cannot know with any precision what those jobs will be. The market will signal what is needed, just as it is signalling now that there are jobs for young Europeans. The way to combat this feeling that others are "stealing" our jobs is not by some sort of quota, which we cannot impose anyway, but by improving education and training. That, after all, is something we should be doing anyway.