Mahmood's Migration Reforms Yield Fraction of Claimed Savings
Exclusive analysis of government figures indicates that Home Secretary Shabana Mahmood's proposed migration changes would deliver only a fraction of the claimed fiscal benefits. According to data obtained via freedom of information requests, the public finances would gain approximately £600 million, not the £10 billion Mahmood asserted.
Extended Qualifying Period Under Scrutiny
Mahmood's plan involves extending the qualifying period for gaining settled status from five years to ten years. Settled status grants migrants access to benefits, healthcare, and social housing. The Home Secretary argued this extension would save costs on public services, citing a potential £10 billion drain on public finances over five years without the changes.
However, data from the Migration Advisory Committee suggests otherwise. Professor Jonathan Portes of King's College London, who obtained the data, stated that the savings are likely minimal and could be offset by costs from migrants leaving the UK and deterring high earners from moving here.
Fiscal Impact Analysis Reveals Discrepancy
The £10 billion figure was based on lifetime estimates of fiscal impact. Portes explained that lifetime fiscal profiles are strongly age-dependent, with net negative contributions often occurring later in life due to pensions and social care. The newly released data shows migrants are net contributors for the first two decades after arrival, only turning negative after about forty years.
Benefit expenditure is much smaller than tax contributions, according to the data. Portes' analysis suggests direct savings from delaying indefinite leave to remain are about £2,000 per care worker and £4,000 per dependant over the full ten-year delay period. Using Home Office estimates of migrants approaching eligibility, this translates to savings of roughly £600 million over ten years.
Caveats and Criticisms
Portes noted several caveats: child benefit was not included in the data, and estimates vary on how many migrants would seek long-term settlement. Longer settlement times could also lead to lower tax revenues, as people remain in lower-skilled work linked to visas rather than progressing to higher salaries.
The Labour-aligned thinktank IPPR questioned the £10 billion figure, stating it cannot be reached without most care workers and dependants leaving the UK entirely. IPPR warned that the departure of skilled care workers could bring significant costs to the Treasury, potentially offsetting any savings.
Political Opposition and Calls for Transparency
Labour MP Stella Creasy, among opponents of the changes, called the £10 billion saving claim "impossible to sustain" and urged parliamentary scrutiny. Sunder Katwala of British Future, who collaborated on the research, said the findings suggest fiscal impacts would be a small fraction of headline claims and called for government transparency.
Liberal Democrat home affairs spokesperson Max Wilkinson labeled the £10 billion claim a "fiscal fantasy" that ignores the value care workers bring to communities and the economy. He criticized the proposal for forcing care workers into a decade of uncertainty and risking tax revenues.
Home Office Response
The Home Office clarified that the £10 billion figure was not intended as potential savings but as an illustration of the lifetime cost for the cohort of care workers and dependants currently due to become eligible for indefinite leave to remain. A spokesperson stated, "The methodology behind our estimates is published, and the home secretary has been clear... 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."
The Home Office is consulting on the changes, but they are not expected to be put to a parliamentary vote. Ministers are working with Labour backbenchers to temper Mahmood's immigration plans, with calls to exempt those who have already arrived in the country.
