IN the affluent north London suburb of St John’s Wood, a favourite with well-heeled expat Americans, Porsches and Mercedes are vying for parking spaces outside the Starbucks coffee shop.

Inside, Luca Russo, the store’s manager, greets his regulars. Russo, a 32-year-old native of Casale Monferrato in Italy’s Piemonte region, heads a multinational team. Four of his staff are from South Korea, four from Poland, two from Brazil, two from Spain, and one from Hungary.

Russo’s mini United Nations — and the complete absence of British staff — is an increasingly common phenomenon in UK workplaces.

Despite having more than 800,000 unemployed, Britain is packed with foreign workers, filling jobs that locals can’t or won’t do.

According to the government, foreign labour is a good thing. Ministers maintain that although immigrants make up only 8% of the workforce, they account for 10% of GDP. Without their entrepreneurial drive, Tony Blair told the CBI last year, Britain’s rate of growth would be half a percentage point lower.

But critics question Blair’s argument, saying he over- estimates the benefits and underestimates the cost of immigration. Foreign workers, they say, are not a boon but a burden, sapping the benefit system and taking jobs that could be filled by British workers.

Opinion polls suggest that anti-immigrant sentiment is rising, with three-quarters of the population saying the influx should be reduced.

Now the Conservatives are set to make immigrant labour an election issue. Four months ago Michael Howard, the Tory leader, set out proposals for an annual quota for immigrants and asylum seekers, and a toughening of the work-permit system to allow in only wealthy or highly skilled individuals.

Those who found and held down jobs would no longer have an automatic right to stay after a qualifying period of residence. Under the Tory plans, the ready supply of migrant workers could be choked off.

Russo is typical of the thousands who came to Britain for a holiday and stayed to make a life. He first arrived in February 1996 for a six-month working break after his parents had sold the family business.

Nine years later he is still here, having worked his way up from waiting jobs in restaurants via a Regent Street shoe store to Starbucks, where he was last year’s manager of the year, a feat that earned him a trip to Hawaii.

“When I first arrived it was not hard to find work, but the jobs were poorly paid — maybe £2.50 an hour for waiting in a restaurant,” said Russo. “And I found it hard to fit in in London. Back home I had a lot of friends; here I had only a few.”

But despite a brief return to Italy, Russo stuck it out. At first his parents were not happy with his foreign adventure. “In Italy you live at home until you get married,” he said. Now they are supportive.

Explore Economics

• Pre-Budget Report 2009

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive