David Cameron won’t beat illegal immigration until he tackles the shadow economy

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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.