20.3 C
New York
Tuesday, May 30, 2023

Buy now


It’s too easy to run an illegal business in the UK

Aalways judge A man’s shoes. A rule of thumb that works for fashionistas also applies to people rooting out Britain’s dodgy employers. The best way to check whether a car wash is legal is to look at the workers’ feet, said Mary Krieger, president of the Ethical Trading Initiative, which investigates labor abuse. A legitimate operation would have workers wearing proper boots as they scrub vehicles by hand. Crafty people will see poor souls scrubbing cars with soaked sneakers. If a business skimps on wellies, it may be breaking other rules – whether it’s paying less than the minimum wage or employing people who aren’t entitled to work in the UK.

Hear this story.
Enjoy more audio and podcasts iOS or android.

Your browser does not support

There are at least 5,000 manual car washes across the UK that are a prime example of the UK’s black market economy. Prime Minister Rishi Sunak fears the tens of thousands of people who cross the English Channel in small boats every year will “disappear” in the economy if nothing is done. The government has already cracked down on arrivals, signing a £479 million ($575 million) deal with France to stem migrants and announcing tough new laws to detain and deport those crossing the border. But when the government panics over small boats, it ignores the reason many are heading: the Tories have made it all too easy to run illegal businesses in Britain.

This fact is strangely ignored. When car washes do come up in the conversation, they are usually portrayed as an amusing example of poor productivity in the UK, rather than an illegal practice. Why are four workers working on one machine? However, offenses are “pervasive” at carwashes, according to a Nottingham Trent University study last year. In this study, 89 percent of the car washes surveyed did not provide pay stubs. Only 7% of businesses completed the mandatory ‘right to work’ check. Only one in 10 has the correct insurance. Allegations of modern slavery have plagued the industry, with people forced to work for little or no pay.

Ministers know all this. But when the government tried to tighten the rules in 2018, it chose to self-regulate. Few operators have adopted a code that largely amounts to a car wash pledge to comply with existing laws. Businesses that make money primarily by not following the law are less enthusiastic. Meanwhile, consumers are more than happy to give their Nissan Qashqai a wash.

Car washes are far from isolated examples. Local fast fashion operators sell clothes at unbelievable prices. In places such as Leicester, sweatshops operate with impunity and a large foreign workforce is often forced to work in illegal conditions. In 2018, some workers in the city’s garment industry were paid as little as £3.50 an hour, sparking an outcry. A year later, a council report revealed problems ranging from withholding wages to fire doors being padlocked shut. The situation is not improving. A recent survey by the University of Nottingham revealed that around half of the city’s textile workers still do not receive minimum wage, sick or holiday pay. A third did not receive pay slips. A quarter had their wages withheld.

Enforcement of basic labor rights is weak. The taxman investigates around 3,000 of the UK’s roughly five million businesses each year for breaches of minimum wage rules. Between 2007 and 2021, only 16 employers were successfully prosecuted for violating the state minimum wage law. (“That’s up from last year’s number (15),” boasted the report revealing the victory.) “It wasn’t even hidden in plain sight, it was happening in plain sight,” Ms Creagh said.

It is possible to run clear and obvious scams in central London.Oxford Street is a busy shopping boulevard that has been taken over by shops selling an odd assortment of luggage, vape juice and mmA 500g bag costs £24.99. According to Westminster Council, such shops have been exempted from paying sales tax of up to £9m. Money laundering allegations have plagued the industry. Investigators from local authorities met with a series of shell companies and directors who did not exist. Weak laws and lax enforcement by state institutions allow scammers to thrive.

Council does what it can. It routinely raids shops like the one on Oxford Street it suspects of selling unsafe goods, whether it’s unsafe vaping juice or knockoff chocolate. (A common ruse is to melt cheap supermarket chocolate and turn it into a knockoff Wonka bar for £8.) Think of it as a sequel to Al Capone’s method. Prosecuting a Chicago gangster for murder proved impossible, so authorities charged him with tax evasion. If tax evasion is hard to prove, hit today’s villains with whipped dodgy chocolate.

secret ingredient is crime

This question is not tricky. Governments can do a lot to combat black market business. The Conservatives have long promised to merge the different agencies responsible for labor abuses into one. But it hasn’t happened yet, despite being proposed more than three years ago. An economic crimes bill currently before parliament includes stricter identity checks for company directors. However, the government has given no guarantee that Companies House, which registers companies in the UK, will have the resources to exercise its new powers.

Dr Alison Gardner of the University of Nottingham argues that a skint state would usually only intervene in the most extreme cases, meaning low-level crime would go unnoticed. People in total servitude may be rescued. Employees who don’t get sick pay or earn less than minimum wage are out of luck. Tax authorities don’t crack down on minimum wage abuse for the same reason police don’t bother investigating auto crime, for example: they usually have bigger things to worry about.

An administration that is serious about addressing the root causes of illegal immigration, without being blindly tough, has many options to choose from. Until then, anyone looking for an ethical car wash should check out wellies.

Read more from our UK politics columnist Bagehot:
Thatcher, Sunak and the politics of supermarkets (8 March)
How the Tories channeled Millhouse on The Simpsons (March 2)
Bring back Shamima Begum, then put her in jail (February 22)

Also: How the Bagehot column got its name

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -spot_img

Latest Articles