PolicyLens

Methodology note

Abolish ILR and migrant benefits: calculation note

Assumptions behind the Abolish ILR and migrant benefits scenario. Implementation detail is incomplete, so uncertainty is explicit.

View main policy page: Abolish ILR and migrant benefits

Central fiscal result

-GBP 3.0bn - Net fiscal impact in 2027-28

Low case: -GBP 10.0bn. High case: +GBP 7.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

  • Indefinite leave to remain is abolished or rescinded.
  • Foreign nationals have no routine benefit access.
  • Five-year renewable visas replace settlement.
  • Retrospective legal failure is included in the high case.

Affected population

  • Affected units are foreign nationals, employers and migrant households.
  • Exposure depends on visa type, income, family status and duration.
  • Employers face higher retention and recruitment risk.
  • Public services face mixed demand and staffing effects.

Gross impact

  • Central saving assumes some benefit and housing spending falls.
  • Lost tax receipts from lower labour supply partly offset savings.
  • Legal and administration costs are material.
  • Lifetime claims are not converted mechanically into annual savings.

Fiscal build-up, central case

  • Benefit and housing savings: -GBP 6.0bn
  • Lower tax receipts from exits: +GBP 2.0bn
  • Administration, appeals and litigation: +GBP 1.0bn
  • Public-service staffing pressure: +GBP 0.0bn

Central net impact: -GBP 3.0bn in 2027-28.

Behaviour and pass-through

  • Low case assumes high benefit savings and limited skilled-worker exit.
  • Central case assumes meaningful labour-supply and tax-base loss.
  • High case assumes legal delays, lower receipts and service staffing costs.
  • Price effects rise in migrant-dependent sectors.

Phasing

  • 2026-27: -GBP 0.5bn. Preparation or partial implementation.
  • 2027-28: -GBP 3.0bn. Main scenario year.
  • 2028-29: -GBP 4.0bn. Behaviour and pass-through develop.
  • 2029-30: -GBP 5.0bn. Steady-state uncertainty persists.

Main source groups

  • S1: Reform page states ILR abolition and no benefit access.
  • S2: Boriswave paper gives Reform's lifetime fiscal claims.
  • S3: UK immigration studies inform fiscal-contribution and labour-market caveats.
  • S4: MAC evidence frames labour-market shortages.
  • S5: No official UK impact assessment exists for this policy.