Rachel Reeves wants to take the axe to Britain’s bloated asylum bill as she seeks to fill a £30billion black hole in her Budget.
The Chancellor yesterday received the initial economic forecasts from the Office for Budget Responsibility (OBR) watchdog telling her how much she needs to raise to balance the books.
Sources have told the Daily Mail she believes there are still huge savings to be made in wasteful public spending – yet she is not expected to make more cuts to Whitehall departments in the statement next month.
Instead the Treasury is targeting areas such as support for Channel migrants, where spending can be reduced without making a politically damaging return to austerity.
Ms Reeves is expected to set out in her Budget plans to curb the use of costly hotels to house new arrivals, having previously only vowed to close them by 2029.
She may also announce further restrictions on what public services asylum-seekers can access and when, after Home Secretary Shabana Mahmood said at the Labour Party conference that migrants must in future prove they have not claimed benefits before they can gain the right to permanent settlement.
A Treasury source told the Daily Mail: ‘For years we have been saying that stagnant productivity has been holding working people back and that there is too much wasteful spending in government – with asylum spending at the top of the list. We are getting on with tackling that.’
Figures show the cost of the asylum system reached £5.4billion in 2023-24 but could rise still further as record numbers of migrants have crossed the Channel since Labour came to power.
Rachel Reeves (pictured) wants to take the axe to Britain’s bloated asylum bill as she seeks to fill a £30billion black hole in her budget
Migrants try to board a crowded smuggler’s boat off the coast of northern France on September 19 in a bid to cross the English Channel
The National Audit Office predicted this year that asylum accommodation alone will cost £15.3billion over a decade, triple the original estimate, as more are put up in hotels.
As of June there were still 32,059 asylum seekers in hotels, up 8 per cent in a year, but Ms Reeves said at her Spending Review she wanted to close them all by the end of this Parliament, expected in 2029, saving £1billion a year.
Last month Sir Keir Starmer said he wanted to ‘bring that forward’ after a summer dominated by protests outside hotels around the country, which ended with the Home Office successfully appealing against a High Court ruling that the Bell Hotel in Epping should be shut down.
It emerged this week that the Army is on standby to build new camps to house migrants, despite the problems the Conservative government had finding suitable sites, as well as moving them into disused student blocks.
Another 176 migrants were brought in to Dover having left France in three dinghies on Thursday, taking the tally for the past week to 2,213. In total 57,643 have arrived since the election in July 2024.
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Rachel Reeves ready to target bloated asylum bill to plug £30bn black hole in next month’s Budget