Channel migrants who arrived on small boats are said to be earning money through cash-in-hand work in Britain's vast illegal economy, valued at £260billion.
Those who entered the UK illegally via the Channel are understood to be accepting below-market wages while being exploited by employers operating outside the law.
Economic analysts calculate the shadow economy represents a quarter of a trillion pounds, equating to 10 per cent of the UK's total economic output.
The practice is draining the Treasury of billions in lost tax revenue at a critical moment when Chancellor Rachel Reeves is considering tax rises to finance £113billion in infrastructure spending.
Since 2022, one in 11 adults works in the black market (stock image)
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The Treasury loses an estimated £2.2billion annually to tax evasion from businesses and individuals operating entirely within the shadow economy.
Research from the National Centre for Social Research indicates that one in 11 adults now participates in black market work, with increased migration since 2022 correlating with a rise in cash-in-hand employment.
Reform UK leader Nigel Farage told The Sun: "The British people are being taken for fools again. We already know that our borders are in chaos.
"But thanks to successive Labour and Tory governments, those arriving then go on to work illegally on the £260billion black-market economy all the while we are paying for their accommodation."
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The harsh reality of this underground economy became apparent last week when 20 men, including Afghan nationals, gathered beneath a flyover in Barking, East London, according to an investigation by The Sun.
These workers were competing for labouring jobs paying as little as £30 daily.
Among them was Torab, 23, who said: "I arrived in England on a tiny boat with 48 people. The boat was so small I thought it was going to sink.
"I live in Luton, in a hotel with other asylum seekers. I come here to Barking two, three times a week. I arrive here no later than 6.30am. I normally do building work, carpentry, but will do whatever there is. They give me £70 a day, sometimes £80. I think it's a fair price."
Over 15,000 people have arrived from the Channel so far this year
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Another worker, Ato, 33, from Ghana, who claimed he entered Britain hidden in a lorry, expressed frustration at the competition for work.
He said: "There are too many people here today. The cars come and you have to run to get a job first before the others waiting, but there are always more than 15 people trying.
"I come twice a week normally. I used to come more, but there is little work here now. When the work comes, the pay is not so good. They're long days, lots of hours, and sometimes it's just £30 or £40."
Despite the challenges, he added: "Yes, I like the UK because there are jobs. But it's hard with no money, with no work."
Home Secretary Yvette Cooper said: “Unscrupulous employers and illegal workers will be held to account under this Government — since coming into power we have increased raids and arrests for illegal working by 50 per cent compared to the previous year, with 9,000 visits and 6,410 arrests.
“We must not stand for this. The rules need to be respected and enforced."
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