The real 'Pull Factor'

The UK already has ID cards for foreign workers; the high cost of employment is the real pull factor

The Prime Minister has announced that all UK citizens will be required to have a digital ID to work in the UK, and this will become law by the end of this parliament. The government has attempted to promote this idea as necessary to prevent non-citizens from working illegally. This might seem reasonable, except that immigrants (non-citizens) in the UK already hold biometric residence permits and e-visas, which serve as digital ID cards; yet this has not prevented people from working illegally since their introduction.

Non-UK nationals granted limited leave to remain, indefinite leave to remain, or leave to enter, including students, workers, refugees, and family visa holders, possess Biometric Residence Permits (BRPs) or e-visas that record fingerprints and facial images, as well as their name, date of birth, immigration status, and rights to work or study, along with relevant dates, durations, and conditions attached to those rights.

Incredibly, these were introduced in 2007 through the UK Borders Act to, wait for it… verify identity, facilitate access to public services, and prevent fraud and illegal working. The powers associated with these biometric IDs were expanded under the Immigration Biometric Registration regulations in 2008, and BRPs became mandatory for non-UK nationals granted leave to remain for more than six months in 2015. They are now being replaced by a digital-only immigration status, ‘eVisa’.

Interestingly, the physical credit-card style BRPs with an embedded secure chip containing encrypted biometric data will be phased out by the end of this year. Employers need a specialised card reader to access the biometric data stored on the e-visa. However, they should request to see the card and can use the Home Office’s online View and Prove system to verify an employee’s status. Border officials and authorised agents can access the chip using a secure terminal.

Apparently, BRPs were difficult to copy or counterfeit, as they featured a hologram and other elements only visible under ultraviolet light, such as microtext and colour-shifting ink. However, if a casual employer were unaware of the existence of BRPs and eVisas, just as many UK journalists appear to be, let alone know what the hologram and microtext look like, they would find it hard to identify a forgery. Clearly, companies that employ large numbers of staff will not have this problem and probably have a card reader or a hotline to the Home Office View and Prove system.

However, despite claims that BRP cards are difficult to copy, they are being replaced with a ‘digital only’ e-Visa linked to a person’s passport and biometrics, managed via a UK Visa and Immigration account (UKVI). Apparently, the new eVisas will reduce the risk of forgery (so much for the holograms) and enable real-time verification, while also aligning with the digital-only EU Settlement Scheme system.

So, in case you missed the timing, this biometric ID system started under the last Labour Government to ‘stop people working illegally’. It was continued under the coalition government, and then the Conservative governments run by five separate Prime Ministers, without anyone noticing or complaining about it. However, during this time, the existence of biometric ID cards did not stop illegal working, people overstaying their visas, or those claiming asylum after arriving on a tourist visa, or simply arriving in small boats without a passport, phone or any other form of identification.

So, why would the proposed Biometric ID system for all UK citizens and legal residents prevent illegal working, visa overstaying, or asylum claimants when previous attempts at digital ID for non-citizens haven’t prevented these problems?

The idea of digital biometric IDs for all UK citizens, instead of just targeting illegal immigrants, has sparked strong feelings from both the Left and the Right. Everyone, from civil liberties advocates to supporters of small government, is upset by this proposal. It seems we will all need a Gov.uk wallet app (probably on a smartphone) to store this ID, which will also streamline access to public services. There might also be a physical card for those who are ‘digitally excluded’—such as undocumented immigrants who threw their phones and passports into the Channel. The system may not require fingerprints, only a photo, making it similar to a driver’s license, which most people already carry. Why is the government investing its political capital in rolling out yet another ID system when none of the others seemed to have worked? Could it be because the young are less interested in getting driving licences, and self-driving cars are already in use in the US and will soon be operating in the UK?

Incentives Matter

Starmer has even claimed that Digital ID will reduce the pull factor of illegal immigrants from France, but France has the same credit-card style IDs for foreign workers, students, and asylum seekers as the UK’s old Biometric Residence Permits, with facial images and fingerprints stored on an encrypted chip readable by the French authorities. Even the fines for employing undocumented workers in France and the UK are similar. If anything, France is more lenient. So why would a digital ID system stop illegal immigrants from crossing the channel? It should be no easier to work in the UK than it is in France.

Obviously, many UK employers were not using the government’s check-immigration-status website to verify an employee’s right to work. The Home Office estimates that there are between 800,000 and 1.2 million illegal immigrants living in the UK. Between July 2024 and May 2025, there were 9000 workplace raids and 6,410 arrests for illegal working.

But there are other ‘pull’ factors that encourage the employment of undocumented workers in the UK, which are unrelated to the lack of ID cards. Specifically, the costs of hiring workers legally—such as paying a minimum wage of £12.21 an hour, employers’ national insurance at 15% on salaries above £5,000, as well as sick pay, holiday pay, statutory maternity pay, paternity pay, adoption pay, shared parental pay, parental bereavement leave, menopause support, and neonatal care pay—all these entitlements will start from the first day of employment under the Employment Rights Bill, which is expected to receive Royal Assent this Autumn.

The cost of employing someone full-time on the minimum wage has increased from £24,131 to £26,632, an increase of 10.4%. However, don’t imagine that the employee is receiving all of this money; their after-tax income has only increased by 5.5%. Meanwhile, the employer’s National Insurance has increased by £1,000 to £2,822, an increase of over 54%. Is it any wonder that employers are prepared to employ illegal immigrants, many of whom come from countries where even the UK’s minimum wage would be a fortune, and many of whom are living in hotels at the taxpayers’ expense, so they can afford to work for less than the minimum wage, as they are unconcerned about paying the rent.

The real ‘pull’ factor is that hiring someone legally in the UK has become too expensive. Changing this and lowering the cost of employment is within the government’s control now. There is no need to wait until the end of Parliament. However, instead of reducing costs associated with employing legal workers, they are continuing to increase the expenses of employment.

Similarly, casual employment, where tradesmen are willing to work for cash-in-hand, and their employers are happy to avoid paying 20% VAT. This acts as another ‘pull’ factor for illegal employment, although it is less common for illegal immigrants to be involved, as they are, hopefully, never VAT registered.

Perhaps if VAT were lower, employers of tradespeople would be less inclined to evade it. Alternatively, if the VAT threshold for tradespeople were increased beyond the current £90,000, there would be less necessity for tradespeople to accept cash payments. If the threshold were increased to £150,000 or £200,000, most tradespeople would have turnovers below the VAT registration limit, making their work 20% cheaper for consumers. This could even incentivise contractors, who currently limit their turnovers to avoid VAT registration, to work more. Or it might motivate homeowners to get those small plumbing issues sorted—things that are needed but not urgent, yet. Who knows? Rachel might even find the growth she has been looking for, if only the Government stopped trying to take more of the money from people’s pockets for itself.

Incredibly, there is a rumour that the Chancellor might move in the opposite direction and lower the VAT threshold in her budget; if she does, this would make many more tradesmen and contract workers eligible to charge VAT and simultaneously encourage more people to employ them for cash.

There is another rumour that she might increase the VAT rate or reduce the number of VAT-exempt or reduced-rate goods. If either happens, I would also expect to see an increase in market stalls and car boot sales where goods are traded for cash. And if the government tries to limit cash withdrawals from bank accounts, then cash will remain outside the banking system, or transactions will shift to cryptocurrencies or barter. At the end of the Soviet Union, packets of cigarettes became a unit of currency in Moscow. Maybe this will be the future for Britain that we can all look forward to.