The Home Office has imposed fines on small businesses for employing illegal workers of over £14 million in just a three month period. The period covered is January to March 2016. The list of businesses targeted by officials appears to include mainly small ethnic minority shops and takeaways. It is unknown how many of those businesses were forced to close as a result.
Back in December 2015 the Home Office was criticised by the Chief Inspector of Borders and Immigration for relying too heavily on denunciations by members of the public:
[Immigration Enforcement’s] intelligence about illegal working mostly consisted of low-level allegations made by members of the public, which were lacking in detail and the reliability of which was difficult to assess. This had led IE to focus on high street restaurants and takeaways, which was self-reinforcing and limiting in terms of organisational knowledge and the nationalities encountered. Other business sectors and possibly other nationalities had been neglected by comparison.
The Chief Inspector went on to observe that it would be hard for the Home Office to defend itself against the accusation that “particular businesses, sectors or individuals were being unfairly targeted” and that non compliance by officials with legal safeguards, record keeping and guidance was “widespread”.
The criticism goes further. The previous Chief Inspector criticised Home Office business enforcement raids as being unlawful in as many as two thirds of cases. In 2012 the Home Office launched Operation Mayapple in serveral ethnically diverse areas, including Brixton. It was accompanied by a social media campaign which included this shocking YouTube video:
Looking through the latest list of takeaways, restaurants and very small businesses on which fines have been imposed by the Home Office, it is hard to see that anything has changed. I can see a fine of £30,000 against one of my local Chinese takeaways and a fine of £225,000 against a Chinese restaurant I walk past on the way back from the forlorn Heathrow Detention Centre. This is presumably enough to bankrupt and close down a small business.
Are these businesses and jobs replaced in the UK economy? Do British Jobs For British Workers magically grow in their place? It seems a classic example of cutting off one’s nose to spite one’s face. The damage done to society by encouraging citizen denunciations and to the economy by shutting down these businesses considerably exceeds the notional amounts of the fines imposed.
On top of that, the Home Office will rarely recover these sums. If the business goes bankrupt the fine is unlikely to be recovered, I would have thought, and the Chief Inspector found that the recovery rate was around 31%, taking an average of 28 months to recover.
There is some suggestion in the same report that affected small business are “phoenixed” (Home Office terminology, of course) by being closed and then reopened in a different name registered to a different family member or sold on to a new owner who is not liable to pay the fine. What else does the Home Office expect these business owners to do in the face of such fines? If this is indeed commonplace, it clearly reduces the impact on the economy but it calls into question the point of the whole scheme.