Why Brits need not apply

Richard Reeves examines the economic impact of immigration

Just weeks after Gordon Brown pledged "British jobs for British workers", figures were released showing that half of the 2.2 million jobs created since 1997 - and all of the half-million generated in the past two years - had gone to immigrants.

Although the figures on immigration are generally treated as "bad news" for the government, the data on migrant employment is in many ways cause for celebration. A standard case against immigration is that foreigners come to the UK to luxuriate on benefits, use the NHS and snag a council flat. But, on the contrary, it seems immigrants come to do an honest day's work.

Certainly, a significant inflow of people puts pressure on public services, especially when the level of immigration is much higher than expected. And some of the indigenous population may see their chances reduced of gaining cer tain goods such as social housing. These are real, political issues. Nonetheless, most economic analy ses show that immigration has a positive economic effect - the latest has estimated a £6bn boost to GDP and it seems certain that recent waves of immigration, dominated by eastern Europeans, especially Poles and Lithuanians, have been even more beneficial.

These arrivals are young: 83 per cent are aged between 18 and 34. They are mobile, demonstrating a much greater willingness to travel the UK in search of work than previous immigrants, who tended to cluster in ethnic conclaves in the large cities. Some of the most popular destinations are the north and west of England, Scotland and East Anglia. Boston in Lincolnshire now boasts 40 languages.

The vast majority of the new immigrants - 94 per cent - have no dependents. They are also white, which improves their chances of landing a job (a fact about the British labour market that should cause no pride). And they work hard. Major employers praise the "superior work ethic" of eastern Europeans.

The new immigrants believe, with good reason, that if they come to the UK and work hard, they will make good money - or, at least, money that looks good once it is converted back into zlotys or litas. Given that their countries of origin are much closer than those of earlier immigrants (from the Caribbean or Asia, for example), it seems likely that many of the eastern Europeans will work here for a few years and then make the reverse migratory journey.

A harder question is why so few of the jobs that have been created are being taken by any of the five million native Brits currently out of work. They do, after all, have a linguistic edge over the newcomers. It is not as if any of the jobs are advertised with signs saying "Brits Need Not Apply". One explanation is that much of the work, especially in agriculture and construction, is not appealing to the indigenous population. Another is that the new immigrants are making more use of effective "informal" job-search methods - personal contacts and the grapevine - than unemployed Brits, many of whom are cut off entirely from the world of work.

Out-of-work Brits are also, after a decade of economic expansion, increasingly in what policy wonks dub "hard to help" groups: the long-term unemployed; those with caring responsibilities, such as lone parents; and those on incapacity benefits. A single Lithuanian lad can easily pop up to Liverpool to take a job: it is a different matter for a single mother of four.

There are some harder truths. The British benefits system makes relatively few demands on recipients in terms of job search, certainly by comparison to the new "tough love" US welfare system - a gap that David Cameron looks set to exploit. You do not need to be on the far right to see that there is little incentive for indigenous welfare recipients to swap the stability of benefits for the uncertainty of the labour market.

But the link between immigration, welfare and employment cannot be ignored much longer, for there is certainly something tragic in the sight of a British economy creating jobs alongside a British welfare system discouraging British citizens from taking them.