Bill Midgley column

Sep 13 2006 By Bill Midgley, The Journal

Many more columns will undoubtedly be written regarding migrant labour and the impact that it has upon both the UK's economic and social structure.

However, it seems only a few short months since there was much discussion regarding our ageing workforce and the inability of that workforce to generate sufficient income to meet social security benefits in the United Kingdom in the middle part of this century.

One aspect, therefore, of the inflow of migrant workers is the fact that on the whole they are young, they are working, they pay taxes and their social security contributions and will, therefore, be contributing towards the pensions of those who not so long ago had been led to believe that their living standards might fall dramatically. Perhaps an over-simplification of the benefit that migrant workers have to the economy, but that, added to the fact that they have provided a valuable source of labour to many parts of business where there were real job vacancies, does mean that the debate is perhaps somewhat more balanced than many reports would have us believe.

However, there are two sides to the story. And whilst such an inflow of work has undoubtedly provided benefits, there are concerns that this may be only short term and leave behind a residual problem. Many of the immigrants from Eastern Europe are quite likely to return to their own countries as and when European Union spending starts to have an impact upon those economies. In the Czech Republic wages are increasing at 10% - three times ours. And we are likely to see similar occurrences with the workforces from Poland, Hungary and, in due course, Romania and Bulgaria.

What we have not yet done as an economy is ensure that we are training our own young people in the skills that business needs. There is much talk, and there has been progress, but progress is far too slow. And there is a real danger that a short-term solution will mean that we fail to train as necessary, leaving behind an unskilled workforce and one which will become increasingly disillusioned if jobs are not available to them. The UK economy has been given a breathing space because of migrant labour. But it can only be seen as that, and allows us the opportunity to look to providing the skills that we are going to need as we move towards the second and third decades of this century. Failure to address this will bring even greater problems to our economy, at a time when competition from around the world will increase.