The current downturn in the UK economy is leading to an increase in illegal immigration and extremism which could in turn mean higher levels of crime, racism and violence, according to reports of a leaked Home Office document.
It is expected that there will be a rise in the amount of illegal working that takes place in Britain as opportunities for legal employment for migrants' decline with the onslaught of the credit crunch and potential recession.
The state of the economy could also see an increase in illegal smuggling of fuel, tobacco and alcohol as firms try to cut costs to compensate for dramatic falls in revenue. Policing will fail to keep up with the rise in crime due to cost cutting measures, the report also stated.
According to the document from the Home Office, terrorism will become more prominent, the Financial Times reported, as the struggling economy causes a rise in violence, "increasing the appeal of far right extremism and racism", which will, in turn, lead to "more people becoming terrorists".
A "real or perceived sense of disadvantage held by individuals" will have a detrimental effect on communities, the document said, contributing to the already high levels of unemployment and disadvantage evident in some Muslim communities.
Tony McNulty, a Home Office minister, responded to the breach, saying that the information contained in the document is "blindingly obvious" and therefore no great surprise. He said that the Home Office has "never made any pretence that the economy and crime aren't inextricably linked - of course they are."
In order to correct the problems in the economy, top business chiefs are urging Bank of England governor Mervyn King to cut interest rates this month to prevent the country falling into a major recession.
Commenting on the meeting of the Monetary Policy Committee this week, which most analysts expect will see the MPC hold rates at five per cent, David Kern, economic adviser to the British Chambers of Commerce has said that this would be "despite the fact that the UK economy is very probably in technical recession already, and the risks that the situation would worsen have increased."
He said "We understand the MPC’s concern over inflation. But the MPC’s own analysis suggests that inflation will peak in the next 2-3 months, and will fall sharply next year. A major recession can still be avoided, but the MPC cannot wait too long before acting. To reduce the threat of a severe economic downturn, the MPC must start cutting interest rates in October or November."
Meanwhile, there is tension on Downing Street after the Chancellor Alistair Darling gave a controversial interview
to the Guardian last week, raising eyebrows amongst Gordon Brown and other ministers, and sparking speculation that Mr Darling could soon be looking for a new job.
The economic times we are facing, he told the newspaper, "are arguably the worst they've been in 60 years," adding, "And I think it's going to be more profound and long-lasting than people thought."
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