Abolish ILR and migrant benefits: calculation note

Central fiscal result

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

Low case: -£10.0bn. High case: +£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• Indefinite leave to remain is abolished or rescinded.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: -£6.0bn
• Lower tax receipts from exits: +£2.0bn
• Administration, appeals and litigation: +£1.0bn
• Public-service staffing pressure: +£0.0bn

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

Main source groups

• Dustmann and Frattini, "The Fiscal Effects of Immigration to the UK" (Economic Journal, 2014): Immigrant fiscal effects depend on employment, age, public-service use and contribution histories; relevant to benefit-access savings, but not a direct costing of ILR removal.
• Migration Advisory Committee, "Migration Advisory Committee evidence base" (2024): Used to support the baseline, affected-population sizing or behavioural assumptions in the illustrative scenario.
• Reform UK, "The Cost of the Boriswave" (2025): Reform estimates a £154bn discounted lifetime cost for a medium Boriswave settlement scenario; party-side context, not official costing.
• Manacorda, Manning and Wadsworth, "The Impact of Immigration on the Structure of Wages: Theory and Evidence from Britain" (Journal of the European Economic Association, 2012): Migrants and natives are imperfect substitutes; wage effects can fall more on previous migrants; helps assess labour-market effects beyond a simple native-worker frame.
• Reform UK, "Our Policies" (2026): Reform pledges detention, deportation, treaty changes, no free housing or benefits, and stricter visas; current policy anchor.