Recession could spark rise in crime and extremism

Armed Police officers enter a shop in Kings Road, in west London in this file picture.

LONDON (Reuters) - The economic downturn may lead to a rise in crime, illegal workers and far-Right extremism that could drive more people towards terrorism, according to a leaked government document.

A draft letter from the Home Office to Downing Street warns that a recession could create the conditions likely to increase support for radical Islamist groups.

The downturn could also lead to more burglaries, alcohol and tobacco smuggling and hostility to immigrants as jobs become more scarce.

The warning comes after Chancellor Alistair Darling said the slump could be the worst for 60 years, increasing pressure on Prime Minister Gordon Brown, who is trailing the Conservatives in the polls.

The downturn has already seen house prices tumble, the pound fall against the dollar and economic growth grind to a halt for the first time since 1992.

The leaked letter, entitled "Responding to Economic Challenges", says "we should expect increased public hostility to migrants".

"There is also a risk of a downturn increasing the appeal of far-Right extremism and racism, which presents a threat as there is evidence that grievances based on experiencing racism are one of the factors that can lead to people becoming terrorists."

It also warns that "an economic downturn would place a significant upward pressure on acquisitive crime".

Employers may hire more illegal workers to try to save money, while a decline in people applying for visas could cut revenue for the UK Border Agency, the letter adds.

Police chiefs will face financial pressures from higher fuel bills and wage demands from staff feeling the pinch from increased living costs, it says.

A Home Office spokeswoman said on Monday that the letter contained draft advice to the prime minister's Downing Street office, but was never sent.

"We do not normally comment on leaked documents but this is draft advice that the Home Secretary has not cleared and has not been sent to Number 10," the department added in a statement. "It is however appropriate that the Home Office considers the effects the economic climate may have on crime and other policy areas.

"We are confident that we have the right systems in place to respond flexibly to changing economic needs, and are well-positioned to face future challenges."

Shadow Home Secretary Dominic Grieve said the Home Office was "patently not equipped to cope" with a downturn.

"It is deeply disturbing that a department as shambolic as the Home Office already is facing such problems as a result of the economic downturn," he said in a statement.

The pound has suffered its worst month against the dollar since 1992, while house prices have fallen by more than 10 percent in a year. Bank of England policymaker David Blanchflower told Reuters last week that two million could be out of work by Christmas.

(Editing by Steve Addison)