Of course European migrants have done well out of Britain. We’d have sunk without them

While we are successful, we are a magnet for energetic people seeking a better life. The issues migration causes are first world problems – and we know how to fix them

A Polish delicatessen in Dalston, London. Poles make up some 800,000 of EU citizens living in the UK (Rex)

Would leaving the European Union really increase immigration, or would it simply change the mix of people coming here? Has immigration reduced the wages of existing workers, or has it enabled the economy to grow faster? Or both?

The whole issue has become a political “third rail”, with anyone touching it liable to get an electric shock, and as usual economists disagree about its effects.

There are some reasonably uncontroversial facts, and that is a good place to start. One is that the UK has been the fastest-growing large economy in Europe since the financial crash. Another is that it has been creating a lot of jobs – about 400,000 over the past year.

The labour participation rate – the proportion of people of official working age who are in work – is the highest it has ever been since we started this series of stats in 1971: more than 74 per cent.

And unemployment at 5.1 per cent is close to the lowest it has been since the middle 1970s (it got down to 4.7 per cent in 2004), though it is slightly higher than in the US or Germany. If you take the benefit claimant count measure of unemployment, there are actually fewer people on it than at any time since the 1970s.

If this all sounds too good to be true, there are some qualifications.

The UK economy has indeed been growing swiftly, but some question the sustainability of this growth. It has been driven principally by domestic demand and there is a large current account deficit as that demand sucks in imports. The rate at which jobs have been created seems to be slacking in recent months, though it is unclear whether it will go into reverse, and the participation rates still seems to be climbing.

As far as those additional jobs are concerned, roughly half have gone to Britons and half to immigrants. However if you look at where people were born, rather than their nationality, the proportion of additional jobs going to people born abroad is much higher.

Since 2010, almost all the growth in non-nationals has been in those coming from Europe; the number from the rest of the world has barely moved.

So there is no question over whether immigrants have done well out of the British economy. They have.

They have, so to speak, voted with their feet, taking up jobs that are apparently more attractive than those available at home.

And there is no question as to the main beneficiaries since 2010. It has been Europeans. But what about the benefits – and the costs – to the UK?

Here you go from facts to judgements, and judgements that are particularly uncertain because we cannot know the counter-factual: what would have happened had we not had such an open job market.

There is some evidence that inward migration has held down wage rates in unskilled jobs. Overall pay growth has been very muted, but then that is true of pay every developed country since the crash, and in some before it. In the US, median real pay has barely moved for a generation.

It is common sense that the extra million EU workers who have arrived since 2010 must have put some downward pressure on wage rates, but since pay rates everywhere are pretty much stuck it is hard to see immigration has a key factor.

What I think we can say is that had there not been the availability of labour from Europe, the UK would have hit barriers to growth much earlier.

Maybe we would have been able to crack more out of our existing workforce, but since unemployment is at or close to the lowest for 40 years, it is hard to say that many more British people would have found work. And had we reached the limits of growth earlier, that would have put yet more pressure on correcting the budget deficit.

It has been hard enough to narrow the gap between spending and revenue as it is. You can make a decent case that immigrants have been the saviour of the economy, because they have allowed it to grow for longer without showing so many signs of strain.

That leads to the next part of the debate: the impact on public services and infrastructure.

A rising population increases tax revenue but it also puts pressure on both public services and infrastructure, particularly housing. You can do a calculation as to what immigrants pay and what they get out, and the (very) broad answer seems to be that, since most migrants are of working age, they put in more than they get out. At some stage in the future, when they draw pensions, that might be different. But we don’t know.

What is quite clear, however, is that there is more pressure on schools, health services and housing simply because there are more people in the country. In some parts of London and the South East this pressure is acute.

In theory there should be the revenue to pay for it; in practice there is an inevitable mismatch. And that mismatch fosters social tensions.

So what is to be done?

I suggest the first thing to accept is that, unless the economy tanks, there will be more people coming into the country. Maybe the mix of nationalities will be different, but while we remain successful we will be a magnet for energetic people seeking better opportunities. If that is right, we have to plan for population growth.

That means a mixture of public and private investment, and I would hope a less ideological approach to both. It means sensitive regulation: planning that encourages decent quality and decent-sized homes, but preserves as much as we can of the countryside.

It means money in transport (used sensibly, rather than in grandiose projects) and it means spending on education and healthcare at all levels, targeting those people who have been particularly hit by social and economic change.

Easier said than done, sure. But these are first world problems that we know how to tackle. It is also much easier to plan for a growing society than a shrinking one.

And while you can argue that immigration increases the need to make these investments, actually a lot of the things that are needed ought to be done anyway.