Labour's Immigration Savings Far Lower Than Claimed, New Analysis Reveals

Labour's Immigration Savings Far Lower Than Claimed, New Analysis Reveals

Labour's proposed immigration crackdown could save just £600 million instead of the £10 billion claimed by Home Secretary Shabana Mahmood, according to a new analysis of government data. The findings are likely to fuel rebellion within the party as MPs question the economic justification for the reforms.

Reforms Extend Settlement Wait to Ten Years

Home Secretary Shabana Mahmood's reforms would require most migrants to wait ten years to qualify for settled status, a significant increase from the current five-year requirement. Ms Mahmood argued this change would substantially reduce spending on public services by delaying access to benefits, social housing, and NHS treatment.

Last month, the Home Secretary stated that approximately 350,000 low-skilled workers on health and social care visas and their dependants were due to qualify for settled status over the next five years. She claimed this would create a £10 billion lifetime cost to taxpayers if the settlement rules remained unchanged.

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'We have never in the history of this country had so much low-skilled migration in so little time,' Ms Mahmood said. 'We estimate, based on findings from the migration advisory committee, that the lifetime cost to the taxpayer will be £10bn. That figure would be paid for by working people in this country.'

New Analysis Reveals Much Smaller Savings

However, data obtained from the migration advisory committee under freedom of information laws suggests the actual savings would be far more modest. Professor Jonathan Portes, an economics and public policy expert at King's College London, analyzed the new figures and found dramatically different results.

Professor Portes' analysis indicates the direct saving from delaying indefinite leave to remain would be approximately £2,000 per care worker and £4,000 per dependant over the full ten-year delay period. Based on these calculations, taxpayers would save only £600 million over the course of the decade, not the £10 billion claimed by the Home Secretary.

Professor Portes told the Guardian that Ms Mahmood's 'claim that her proposals are necessary to save £10bn' had been 'thoroughly debunked by the government's own data.'

Home Office Clarifies £10 Billion Figure

The Home Office responded by clarifying that the £10 billion figure was not intended to represent potential savings but rather to illustrate the lifetime cost of care workers and their dependants to the public purse if settlement rules remained unchanged.

A spokesman said: 'The methodology behind our estimates is published, and the home secretary has been clear that the estimated lifetime cost for the cohort of care workers and their dependants in the absence of the earned settlement measures would be £10bn.'

The spokesman added: 'We will always welcome those that come to this country and contribute to our national life. But the privilege of living here for ever should be earned, not automatic. We must be honest about the scale and impact of hundreds of thousands of low-skilled migrants getting settlement and make no apologies for taking the necessary action to restore order.'

Labour Rebellion Brewing Over Retrospective Nature

The figures are expected to be seized upon by Labour rebels seeking to water down Ms Mahmood's proposals, despite her insistence they are critical to counter the electoral threat from Reform. The party's left wing has expressed particular anger about the retrospective nature of the proposals, which would apply to migrants already in the UK.

Former deputy prime minister Angela Rayner has described the plans as 'un-British' and accused Ms Mahmood of 'moving the goalposts.' Several Labour MPs have spoken anonymously about their concerns, with one suggesting that stopping the changes from applying retrospectively could quell backbench anger.

Another MP expressed frustration that parliamentarians were not being given a chance to vote on the plans, describing the situation as showing a degree of 'contempt' toward elected representatives. A third revealed that some rebels had been 'shouted at' after signing a letter condemning the proposals.

Broader Immigration Context

The proposed reforms come amid widespread public concern about immigration levels, which has prompted Ms Mahmood to pursue reductions in both legal and illegal migration routes. Under the new system, regular migrants would need to wait ten years to apply for indefinite leave to remain, while asylum seekers would face an even longer fifteen-year wait.

Some ministers are reportedly working covertly with rebel MPs to ensure the measures do not apply to people who have already entered the UK, reflecting the deep divisions within the party over immigration policy. The discrepancy between the claimed £10 billion savings and the £600 million figure revealed by the new analysis is likely to intensify these internal debates as Labour seeks to balance electoral pressures with policy coherence.