The Guardian has reported this morning:
David Cameron will .... [announce] details of a new immigration bill to be included in the Queen's speech, which will propose a new criminal offence of illegal working that will allow police to seize the wages of anyone employed unlawfully.
It has been estimated that the backlog of people in Britain who have overstayed their visas and whose whereabouts are unknown is around 300,000, but it is not known how many are working.
One of my usual list of thoughts logically follows on.
First, David Cameron is admitting when saying this that there is a massive shadow economy. It's just a shame HMRC does not do so when preparing its tax gap data, which is largely populated with "illustrative estimates" in this area, which are otherwise known as guesswork that massively understated the issue to save embarrassment to HMRC's management. I, of course, do somewhat better in my own approach to the issue.
Second, Cameron admits in saying this that illegal immigration is not a supply fed issue: it is not, in other words, people turning up unwanted on the UK's shores but is instead fuelled by UK employers seeking to engage immigrant workers. The announcement on this issue does, however, fail to recognise that.
Third, this means that these people are being exploited for gain by employers in the UK. Shall we recognise who are exploiting and who are being exploited here?
Fourth, the whole emphasis is upon seizing the wages of the employee. What about seizing the profit of the employer who is at least as guilty of handling the proceeds of a crime?
Fifth, most of these employers will be dodgy limited companies. Many will exist behind nominees. They will never file accounts. They will never pay tax. I have again highlighted this issue but the government refuses to even accept there is a problem with the massive under-regulation of companies in the UK that massively fuels the shadow economy and permits crime. Until they do tackle tax abuse, illicit trading and the vast numbers of effectively unregulated UK companies (maybe 1 million a year do not file tax returns when one might be due) there is no way on earth that you can beat problems like illegal immigration.
It's time Mr Cameron took note or he will continue to make empty promises.
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How does this affect exploited workers complaining to HMRC about underpayment of NMW or the liklihood of them helping an enquiry? If you are legally employed and underpaid could you risk pursuing it if it means friends might lose even the exploitative wages they have already been paid?
Very good point
But Richard – Cameron is all style and no substance – do you think that he is bothered? This policy is surely just a head line grabber meant to make the many ‘shy Tories’ in our midst feel that they made the right decision on May 7th.
The underlying issue will likely as you say not to be tackled.
“a new criminal offence of illegal working”
He’s having a laugh isn’t he?
All employers are required to check that their prospective employees are here legally. I had to show my passport and photo driving licence last job search.
If the worker is working illegally, then the employer is employing him/her illegally.
Simple.
Agreed
That’s been the law since the late 1990s as I recall
Oh dear – is it really that bad?
Perhaps I’m naive but a massive shadow economy is certainly not one I’ve encountered. What sort of trades does it exist in?
Agree that seizing the wages of the employee is likely to be the wrong way round. Surely they can see that – or is it a convenient blindness?
Government data shows 11% of VAT is not collected
That’s a mighty big shadow economy
I have been sneered at for this, but if the government really wanted to tackle illegal immigration or cut immigration, then make sure no worker is paid less than £7 or £8 an hour and strictly enforce it, self-employment included. If the majority cannot have their wages cut due to tough and strictly enforced legislation, then there will be little incentive to employ immigrants to undercut wages and conditions.
If they were as serious as they say they are about cutting immigration, they could do this, but of course they won’t as they just pay lip service to it.
Anti-immigration policies are all about attracting the votes of bigots. They feed on fear and ignorance.
A further thought on the effect of this on NMW enforcement. They are saying the big problem is people who come and work here legally but overstay there visa and are then working illegally.
So if these people are exploited on wages below NMW will HMRC fight to make the employer pay them at least NMW for the period they were working legally and then pursue the worker to take from them even the, say, £4 an hour that they continued to be paid after the visa expired?
Good point
Odd how not mentioned by HMG
The Shadow Economy – this would be the ‘prostitute’ referred to in comments in a previous blog of yours, Richard? –“UK could be accused of living off immoral earnings ie Taxing financial pimps and prostitutes” – See more at: http://www.taxresearch.org.uk/Blog/2015/05/21/you-couldnt-make-it-up-2/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+org%2FlWWh+%28Tax+Research+UK+2%29#sthash.60NfFWsW.dpuf