Rachel Reeves is looking to cut asylum spending to help fill the expected black hole in next month’s Budget, with a quicker timeline for closing hotels and restrictions to benefits among the options under consideration.
The Chancellor was on Friday expected to receive the pre-Budget first economic forecast from the Office for Budget Responsibility (OBR) amid predictions that it could leave her with a black hole of up to £40bn and force her to raise taxes to balance the books.
As well as ongoing pressures on economic growth and welfare spending, the OBR is expected to downgrade UK productivity which could cut the amount of cash available to Reeves by nearly £20bn annually.
Treasury sources remained tight-lipped on the contents of the OBR forecast but made clear that Reeves would target “wasteful spending” with spending on asylum “at the top of the list” following a surge in Channel small boat crossings.
At this stage in the Budget process “all options are open”, including a faster timeline for closing asylum hotels, with Labour currently committed to ending their use by the next election expected in 2029.
A Treasury source said: “We aren’t going to give a running commentary on the OBR’s forecasts.
“There is a lot of rubbish out there from people who claim to know what is in the Budget before decisions have been made.
“The Chancellor will make those decisions—no one else.
“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.”
Faster response to the use of hotels
Prime Minister Sir Keir Starmer and Home Secretary Shabana Mahmood have made clear they want to move faster in response to public anger over the use of hotels.
Mahmood has been working with the Ministry of Defence to open up military sites as asylum accommodation, and will have a better idea of the capacity to move people out of hotels once that work is finished.
It is possible a new, faster timeline for closing hotels may then be announced.
The Government has already saved nearly £1bn on hotels for asylum seekers, cutting costs to £2.1bn between April 2024 and March 2025 – an average of around £5.77m a day – and down from £3bn or £8.3m a day.
square NEWS Asylum seekers to be moved to military barracks in policy change
Read More
The government has pledged to end the use of hotel accommodation by the end of this Parliament in 2029 – but pressure from Reform as well as the need to save money could mean the plan is accelerated.
Hotels have also become a focal point for anger over the asylum system, with protests outside some hotels during the summer.
Ministers have also been looking at a clampdown on the benefits migrants receive.
Currently, asylum seekers awaiting the outcome of their claims are offered a place to live and can also receive £49.18 each week for things like food, clothing and toiletries, or £9.95 if their accommodation provides meals. They can also access the NHS.
It is unclear whether the Government would target this kind of subsistence support or restrict access to the wider benefits system for asylum seekers who are granted refugee status, securing the right to stay in the UK and claim universal credit, housing benefit and other forms of welfare payment.
In recent days, Home Secretary Mahmood has made a series of announcements focused on ensuring people contribute to the UK and earn the right to stay if they are legal immigrants, or the right to family reunion if they are refugees, introducing a principle of earning certain benefits.
Hence then, the article about asylum hotel closures could be be fast tracked to help reeves balance books in budget was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( Asylum hotel closures could be be fast-tracked to help Reeves balance books in Budget )
Also on site :
- Denver Fire Department responds to 3-alarm fire at intersection of Leetsdale Drive and S. Forest Street
- Trial to begin for police officer charged in delayed response to Uvalde school shooting
- FDA Clears BrainSpace Intellidrop, an automated neuro device that addresses ICU nursing shortages and builds training data for Physical AI