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Jacqui Smith should back amnesty for illegal workers

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15 July 2007

New Home Secretary Jacqui Smith should back a plan to allow almost half a million people who are currently living illegally in the UK to stay in Britain and pay taxes, according to the Institute for Public Policy Research. The plan was backed by her new cabinet colleagues Alan Johnson and Harriet Harman during Labour’s Deputy Leadership campaign.

ippr’s research shows that regularising the nearly half million people who currently live and work illegally in the UK could net the Treasury around £1billion a year compared to the £4.7billion it would cost to deport them forcibly.

ippr argues that effective immigration controls, including deportation procedures, are crucial to a well managed migration system. But it says that deporting hundreds of thousands of irregular migrants, particularly those who have been in the UK for many years, is simply not feasible – according to a recent Home Office report, this could take over 30 years at the current rate of deportation - or desirable.

The report says irregular migrants:

Come to the UK for similar reasons to regular migrants, often pursuing higher wages.
Are more likely to overstay their visa than enter illegally.
Work in relatively low pay paid sectors, like cleaning, care work, hospitality and food production.

Dr Danny Sriskandarajah, ippr Head of Migration and Equalities, said:

“Illegal immigration is a deeply difficult subject for politicians to tackle. But Jacqui Smith should listen to her cabinet colleagues and back a plan for regularising the nearly half million people who live and work illegally in the UK.

“The simple truth is that we are not going to deport hundreds of thousands of people from the UK. Our economy would shrink and we would notice it straightaway in uncleaned offices, dirty streets and unstaffed pubs and clubs. So we have a choice: make people live in the shadows, exploited and fearful for the future; or bring them into the mainstream, to pay taxes and live an honest life.

“Next year’s planned introduction of compulsory biometric ID cards for all foreign nationals in the UK offers an opportunity not only to strengthen our borders but to take effective action on illegal working.”

ippr’s research also argues that there are a range of policy options for dealing with irregular migration but warns that getting tougher on immigration restrictions can have the perverse effect of encouraging migrants to stay longer than they intended, as the cost and risks of movement are raised. It draws on evidence that the increased security of the US border with Mexico may be doing more to keep immigrants in the country than it does to keep them out.

In the USA, the Agricultural Job Opportunity, Benefits and Security Act of 2007 proposes a mechanism for irregular immigrants who have been working regularly in the US a minimum of two years in agricultural industries to obtain temporary legal resident status for themselves, spouses, and dependent children, that may be extended to permit permanent residency. Spain’s latest regularisation programme resulted in around 700,000 workers being allowed to stay, increasing Spanish tax revenue by an estimated €750 million per year.

Irregular Migration in the UK: an ippr factfile is available as a free download.

Notes to Editors:

ippr argues that with compulsory biometric ID cards for foreign nationals to be introduced next year and tighter border controls becoming a reality, regularisation would be timely and effective. ippr recommends:

Irregular migrants who are already in the UK should be eligible to apply for temporary work permits and issued with an ID card.
Those who show they have been working and contributing to the UK would be issued with two year temporary work permits, and their families will be allowed to remain with them.
These permits could be renewed under the new points-based system, with extra points awarded to those who can show they have been in the UK for a long period.
There would be a requirement to learn English for renewal of the permit.
No one convicted of an offence would be eligible.

Ten facts about irregular migration:

The scale of irregular migration can only be roughly estimated. The Home Office’s median estimate is 430,000 but they say the figure could be as high as 570,000 or low as 310,000. Their estimate is based on subtracting an estimate of the ‘legal’ foreign-born population from the total foreign born population recorded in the census.
Irregular migrants are people who are liable to be deported for issues related to immigration status. This includes people who entered by avoiding immigration inspection (often with the assistance of smugglers), who entered using false documents, who destroyed their passport or had it taken by an employer, who overstayed their visas or have otherwise violated their visa conditions (including students who work more than is allowed), who applied for asylum elsewhere or had their claim for asylum in the UK rejected.
The National Audit Office has estimated the cost of forcibly deporting an irregular migrant at £11,000 so it could cost up to £4.7billion to deport all those currently in Britain.
If irregular migrants were allowed to work legally, the potential taxes they would paid could be as high as £1billion per annum.
There is very little publicly available data about how migrants enter the UK, but it is likely that more overstay their visa than enter clandestinely.
Most irregular migrants will come from outside the European Union (EU) because EU nationals generally enjoy comprehensive entitlements to visit, live in and work in the UK.
Irregular migrants are thought to work in sectors that pay low wages and have high unmet demand for workers.
Policy options for managing irregular migration include better border controls, improved internal controls (like ID cards), increased opportunities for regular migration, clamping down on the informal economy, employer sanctions, removals, voluntary return and regularisation.
The USA has attempted to improve border controls but with only limited success, especially at the US-Mexico border. Employer sanctions and regularisation have also featured in the US strategy.
In 2005, Spain completed a large-scale regularisation programme. Several other Southern European countries (including Spain) have carried out regularisation in the past.

ippr’s analysis assumes that irregular migrants earn the same as the median wage of recently-arrived immigrants (£308 per week), which means a tax contribution of £4791 per worker per year. Multiplying this by the estimated number of workers amongst the Home Office's median estimate of 430,000 irregular migrants means £1,038 billion per year in potential fiscal revenue. The Treasury’s Tax Ready Reckoner shows the cost of abolishing the starting rate of stamp duty or increase the Child Tax Credit by £150 is around £1billion.

The Strangers into Citizens campaign, backed by Churches and Trade Unions, is calling for irregular migrants who have lived and worked in the UK for four or more years be granted a two-year work permit. At the end of those two years, subject to employer and character references, they should be given leave to remain.

Contacts

Matt Jackson, ippr senior media officer, 020 7339 0007 / 07753 719 289 / m.jackson@ippr.org

Richard Darlington, ippr media manager, 020 7470 6177 / 07738 320 645 / r.darlington@ippr.org