Analysis suggests annual expenditure on housing asylum seekers may surpass £4 billion under proposed migration policy changes.

The Labour Party has raised concerns that the Conservative government’s Illegal Migration Bill could escalate daily costs for asylum seeker hotel accommodation by an additional £7.5 million, pushing annual spending above £4 billion.

Current Home Office figures show that £6 million per day is already being spent on housing nearly 50,000 asylum seekers in hotels, with an additional 57,000 in more established asylum accommodation. Labour’s analysis warns that the proposed changes in the Bill, due to return to the Commons on Wednesday, would lead to even higher costs.

The legislation, which applies to those arriving after March 7, aims to prevent asylum claims from being assessed, according to Labour. Instead, the government intends to remove individuals from the country, but Labour argues this is unlikely to happen on a significant scale. Rwanda, one of the primary relocation destinations, is expected to accept only a few hundred people, far short of the estimated 53,000 arrivals subject to the Bill’s provisions this year.

To accommodate these numbers, the Home Office is reportedly planning to expand its use of asylum housing, including bases, barges, and new hotels. Labour cited recent proposals or openings in areas such as Hereford, Kegworth, and Aberdeen, despite Prime Minister Rishi Sunak’s December promise to end the reliance on hotels.

Shadow Home Secretary Yvette Cooper criticised the Bill, stating: “This legislation will create more chaos in the asylum system. Instead of reducing hotel use, it will result in thousands more people housed in taxpayer-funded accommodation.” She urged Tory MPs to reject the Bill in favour of Labour’s proposal for fast-tracking decisions and returning asylum seekers to safe countries like Albania and India to alleviate the backlog.

Labour has also called for new measures requiring the Home Office to consult local councils on asylum accommodation plans and to prioritise deportation of terrorists arriving on small boats.

A government spokesperson dismissed Labour’s analysis, accusing the party of opposing efforts to deter illegal crossings. “Labour doesn’t want to stop the boats – they want to scrap the Rwanda deal, which would only increase the costs of our asylum system. Our plan is designed to prevent people from making these dangerous journeys in the first place,” the spokesperson said.