Abolish ILR and migrant benefits

Policy scope

Reform's live page pledges to abolish indefinite leave to remain, rescind awards after two years, require renewable visas and apply no recourse to benefits for foreign nationals.

• ILR route is removed or reversed.
• Five-year visas replace settlement.
• Benefit access is heavily restricted.

Core trade-offs

Some migrant-household spending may fall, but the policy risks deterring skilled workers, increasing churn and reducing tax receipts from migrants who stay and work.

• Benefit and housing costs may fall.
• Migrant workers and employers bear costs.
• Tax receipts may weaken if workers leave.

Illustrative fiscal impact

-GBP 10.0bn to +GBP 7.0bn. Central estimate: -GBP 3.0bn.

• Positive numbers mean public-finance pressure; negative numbers mean Exchequer savings.
• ILR abolished is the main scale marker.
• Gross costs and receipt offsets are separated in methodology.
• Behaviour and pass-through widen the range.
• This is not an official costing.

Economic impact by 2027-28

• Jobs: Likely reduces migrant labour supply; shortages may increase in exposed sectors.
• Wages: Some domestic wage pressure possible, but vacancies and prices may rise.
• Prices: Higher labour costs likely in care, hospitality, agriculture and professional services.
• GDP / productivity: Likely negative if skilled and working-age migrants leave or do not arrive.

Assessment

The fiscal direction is not straightforward. Restricting settlement and benefits may cut spending, but migrants also pay taxes, fill vacancies and support output. A broad anti-settlement policy is likely negative for GDP if it reduces working-age labour supply, especially in high-skill and shortage sectors.

Confidence: Low. Reform gives policy direction and lifetime claims, but annual implementation, legal constraints and cohort behaviour are unresolved.

Main risks

• Tax-base loss: Working migrants who leave or never arrive no longer pay UK tax.
• Service shortages: Care, health, hospitality, agriculture and universities could face more vacancies.
• Legal failure: Retrospective settlement changes may face litigation and transitional costs.

Safeguards

• Publish a cohort-by-cohort fiscal model.
• Protect high-skill and shortage-sector routes.
• Avoid retrospective changes without legal review.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology: Abolish ILR and migrant benefits Internal - PolicyLens, 2026
• The Fiscal Effects of Immigration to the UK Academic article - Dustmann and Frattini, Economic Journal, 2014
• Migration Advisory Committee evidence base Official advisory report - Migration Advisory Committee, 2024
• The Cost of the Boriswave Party policy document - Reform UK, 2025
• The Impact of Immigration on the Structure of Wages: Theory and Evidence from Britain Academic article - Manacorda, Manning and Wadsworth, Journal of the European Economic Association, 2012
• Our Policies Party policy source - Reform UK, 2026

Other Reform UK policies

• Raise income-tax thresholds
• Cut household energy taxes
• Cut fuel duty by 20p
• Cut stamp duty below GBP 750,000
• Raise inheritance-tax threshold to GBP 2m
• Cut corporation tax to 15%
• Raise VAT threshold to GBP 150,000
• Abolish IR35 rules