Rachel Reeves 'set to blame £20billion black hole on asylum hotels'
The Chancellor's diagnosis comes as is it estimated that asylum support costs are set to rise to £30 billion to £40 billion over the next four years.
Chancellor Rachel Reeves will blame the £20billion black hole in the public finances on hotel bills for asylum seekers, it has been reported.
On Monday, the Labour frontbencher will address the House of Commons and detail the public finances that her party inherited when they came into office earlier this month.
This comes amid growing fears the Labour Party will impose tax hikes to bridge the gap.
As reported by the Telegraph, Ms Reeves will put the black hole at £19billion and will claim that support measures for asylum seekers is costing the UK economy around £10billion a year.
Home Office figures estimate that asylum support costs are set to rise to £30 billion to £40 billion over the next four years.
It was previously thought that this figure stood at around £3billion.
A Government source told the Telegraph: “We are facing enormous asylum accommodation costs for the next year until we are able to get to the point that we can get processing up to speed. But that won’t happen overnight.”
The planned statement from the Chancellor will once again bring the issues of immigration to the fore.
Labour under Prime Minister Sir Keir Starmer has ditched the previous government's Rwanda policy, which would have seen asylum-seekers moved to the African country for processing.
Yvette Cooper, the Home Secretary, has criticised the Conservative's handling of the problem, saying: “We have often warned that, frankly, it would be cheaper to put them up in the Paris Ritz. As it turns out, it would have been cheaper to buy the Paris Ritz.”
Paul Johnson, director of the Institute of Fiscal Studies, said on Friday that the Chancellor should not feel “any sense of surprise” when she discovers the state of the public finances.
He said: “I don’t think it’s really very credible at all. In terms of the scale of the problems facing public services, lots of individuals and organisations have pointed out that public services are performing considerably worse than they were pre-Covid.
“They are performing worse than they were back in 2010. We have seen that Birmingham and other local authorities have been going bust, we know what the waiting lists are in the NHS.
“We have always known that public sector pay is a long way behind private sector pay in terms of what has happened in recent years so there shouldn’t really be any sense of surprise that there is a big issue here.
“The choice is, as ever, do you want the public services to be as good as they are, better than they are, or are you willing to see them get worse?”
