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In Haifa harbour a few days ago, I was on a boat sailing in to be docked. Peering down from the cabin, I saw a sturdy man pulling strenuously at the mooring rope. I was surprised to be told that he was an Israeli Jew. When Israel was first established, in 1948, the principle behind the creation of the Jewish state was that every kind of job should be done by Jews. The country should have a Jewish president and a Jewish prime minister. It should also have Jewish manual workers, Jewish policemen – even Jewish criminals. No occupation should be too high or too low for a Jew.

In the first 20 years of Israel's existence, that principle was largely adhered to. Then, however, with Israel's victory in the Six Day War of 1967, a vast pool of low-paid Palestinian labour became available, unprotected by Israel's powerful trade union organisation, the Histadrut. More and more of the less congenial or prestigious jobs were taken over by this underprivileged workforce.

On my recent trip to Israel I saw building sites on which all the workers were Arabs, and road-gangs consisting entirely of Arabs. In restaurants all the waiters might be Arabs and, in the hotels where I stayed, a high proportion of the staff were Arabs – waiters, support staff, cleaners. In fact, the Israeli economy could not function efficiently without a high proportion of Arab labour.

So, what has this situation to do with Britain? Answer: large parts of Britain's economy, too, could not function without immigrant labour.

Everyone who has had anything to do with the NHS will know that hospitals would have to close down without doctors, nurses and other staff who are either first-generation immigrants or the offspring of immigrants.

Immigrant labour is in part responsible for making Britain the fourth-strongest economy in the world

The same applies to public transport. Next time you are on a bus or a train, check the driver, the conductor, the on-board staff. When you are next in a big supermarket, check out the checkout staff, or those replenishing the shelves. And I am not referring simply to members of the ethnic minorities originating from the Indian subcontinent, the Caribbean, or East or West Africa, nor to Filipinos or Thais. I mean, too, people who have come here from European countries, many of them benefiting from the free movement of labour within the European Union, but others stemming from Eastern Europe. Indeed, some of these workers may even be illegal immigrants.

And yes – wait for it – it seems that quite a number of the workers on building sites these days come from overseas. Wherever I go in this country, I see buildings going up. The face of our towns and cities is being transformed, from the Great Court at the British Museum through to the wonderful Commonwealth Games stadium in Manchester.

The demand for construction workers is enormous. And let's be honest about this: our economy in 2002 is so prosperous, and in some areas overstretched, that workers from overseas, far from stealing jobs from applicants born in Britain, are doing jobs for which there are not sufficient British applicants. We have the highest employment levels this country has ever known, and real levels of unemployment are lower than for many years.

I am not arguing for immigration laws to be ignored, nor for those who manipulate or abuse the immigration laws – employers, as well as employees – to be let off the hook. Some people allege that illegal immigrant labour is battening on the welfare state. Yet it is at least equally true that immigrant labour is contributing positively and may well be in part responsible for the unprecedented affluence that makes Britain's the fourth-strongest economy in the world.