Europe's new far right demagogues

Illegal immigrants bring huge economic benefits, says Harriet Sergeant. But they suffer appallingly

In the UK today we have two workforces ­ one garlanded with benefits, the other desperate to wipe your windscreen. This situation allows us to enjoy the best of the First and the Third Worlds: to take maternity leave and employ a nanny. It has raised our living standards and provides us with services previously out of reach or not available. Domestic help, builders, minicab drivers, car washes offer services half the price of the legal equivalent ­ if you can find them. All this is done by a workforce, undocumented, unresearched and, to many, invisible but for a pair of willing hands. What is it? It's the black economy, stupid!

In the UK today we have two workforces ­ one garlanded with benefits, the other desperate to wipe your windscreen. This situation allows us to enjoy the best of the First and the Third Worlds: to take maternity leave and employ a nanny. It has raised our living standards and provides us with services previously out of reach or not available. Domestic help, builders, minicab drivers, car washes offer services half the price of the legal equivalent ­ if you can find them. All this is done by a workforce, undocumented, unresearched and, to many, invisible but for a pair of willing hands. What is it? It's the black economy, stupid!

It exists because the Government has lost control of immigration. We have no idea who is entering this country, in what numbers, how they live and how they get here, how many leave and how many come and go. Our immigration policy is to let in an unlimited number of immigrants, then treat them badly or pretend they do not exist

Immigration has reached a new record, increasing the population of Britain by half a million in three years according to government figures out last week ­ and that is only the people we know about. An unknown number, particularly from Eastern Europe, the Middle East, Russia and Africa, are smuggled in illegally. Others simply disappear when their claim for asylum is rejected. Stephen Boys Smith, the director general of the Immigration and Nationality Directorate at the Home Office, admitted to the Home Affairs Select Committee in November 2000: "We have no idea of the exact accumulated figure, but the numbers will be very large ... It could be as many as hundreds of thousands of people."

The lack of policy today is tacit approval of a system that corrupts and criminalises. Immigrants are the first to suffer. They depend on criminal gangs to claim asylum. They have to perform criminal acts in order to find somewhere to stay and to work. And work is what this is all about. Work is where the money is made to justify the large amounts immigrants must pay the gangs to get here. By far the biggest draw for immigrants to the UK is the economy and our insatiable demand for labour.

Crucial for the illegal immigrant is the accessibility of the workplace. He can get a job without anxiety about his status. The black economy is now so large and pervasive that it offers a parallel world of informal housing and forged documents in which the illegal immigrant can move in ease and safety, invisible to the authorities.

Government taxes on labour have contributed to this situation. Companies now prefer to contract out services previously provided in-house. Most large companies would not consider using illegal labour. However, they are happy to hire the most competitively priced contractor, who probably would.

A tax inspector with the Inland Revenue named the construction industry, fruit growers, catering, fashion and cleaning firms as the worst offenders. Companies are meant to check their contractor but, said the man from the Inland Revenue, "as a tax inspector whose job it is to investigate companies, I can tell you people are finding ways around this all the time". Cleaning contractors employing illegal labour are so ubiquitous that they have become, as one policeman complained, a security problem. He tells a (possibly apocryphal) story of a photograph taken one night of three cleaners, all illegal immigrants. It showed them perched cheerily on the desk of the Home Secretary.

For illegal immigrants, work in the black economy is a precarious business. They are at the mercy of their employers. They have no rights and can be exploited or sacked at any moment. One immigration lawyer from the Pakistani community discovered that the old man who regularly sold him a kebab at lunchtime had worked for 20 years in this country as an illegal immigrant, for £1 an hour. His employer had never paid taxes or insurance towards his pension and he was existing on £5 a month. In Southall and Wembley, sweatshops are employing children of illegal immigrants for a few pounds a week, and sometimes just for food. Even they are better off than the young Afghan I met who was bruised, battered and barely able to walk. He had been smuggled in by a gang of brothers, all former asylum-seekers, and had been put to work in their pizza parlour. He worked 12 hours a day, seven days a week, for nothing. When he tried to escape they beat him up.

Illegal immigrants like the young Afghan provide a complementary rather than a replacement labour force. They allow us to enjoy both the luxury of generous labour laws and the feisty economy created by workers unprotected by such laws. We choose to ignore that our asylum system ensures law-abiding people are forced outside the law and into the power of the gangs. Slavery and child labour are the result of illegal immigration and a corrupt asylum process. While we have been pretending an immigration problem does not exist, a parallel workforce has grown up alongside our safe and orderly society. It is a cold and brutal place for the invisible people.

Harriet Sergeant's 'Welcome to the Asylum' is published by the Centre for Policy Studies. She is speaking on asylum and immigration on 15 May at the Institute of Economic Affairs (020-7799 8900)