“(1) The Secretary of State may by regulations make arrangements for asylum seekers to receive loans towards their maintenance and accommodation out of money made available by the Secretary of State for that purpose.

(2) Regulations made under subsection (1) may—

(a) specify the circumstances in which an asylum seeker would be eligible for or required to take out the loan;

(b) prescribe the maximum amount of the loan that may be made to an asylum seeker in any year;

(c) make provision as to the time and manner in which repayments of loans are to be made; and

(d) make provision for the deferment or cancellation of a borrower’s liability in respect of a loan.

(3) Loans shall bear interest at such rates as may from time to time be prescribed by regulations made by the Secretary of State but so that—

(a) the interest (which shall accrue from day to day) shall be added to the outstanding amount of a loan; and

(b) the rates shall be such as appear to the Secretary of State to be requisite for maintaining the value of that amount in real terms.

(4) For the purposes of sub-paragraph (3)(b), the Secretary of State shall have regard to the retail prices index published by the Office for National Statistics, any substituted index or index figures published by that Office or such other index as appears to the Secretary of State to be appropriate.”—

This new clause would enable the Government to treat asylum support like a student loan, with asylum seekers able to pay back the cost of support when they are in paid employment.

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

The Immigration and Asylum Act 1999 and the Asylum Support Regulations 2000 enable asylum seekers to obtain housing and funds to support themselves while they wait to find out whether they will get asylum. Their children can attend state schools and they are entitled to NHS care. We know that asylum seekers crossing the channel in small boats are often given bail and provided with asylum support. Those with no UK address will be allocated asylum housing, or placed in asylum hotels or accommodation centres. The National Audit Office has estimated that the cost of this to the taxpayer was around £4.7 billion in 2023-24.

Is it the Conservative party’s intention to build these detention centres, or accommodation centres, as part of its new immigration policy?

We have had many alternative means of accommodation, including hotels. Accommodation of asylum seekers in hotels is through the roof—it is up 29%, with 8,500 more people staying in them—but the situation I am describing applies more widely than any accommodation centre or hotel.

The £4.7 billion tab for 2023-24 covered beds, meals and NHS visits while the backlog ballooned.

Will the hon. Gentleman accept that that number has “ballooned”—or gone up highly—not just in the aggregate but per asylum seeker? The hon. Gentleman wants to try to charge people, but his party let the system get completely out of control. Maybe it was the backlog that let it get out of control, rather than the kind of hotels that people were staying in.

The reality is that somebody is getting charged for it and paying for it, and at the moment that is the Great British public. There are ballooning costs. There are increasing numbers: illegal arrivals are up 28% since the election, there are 29% more people in hotels, and fewer of the people who arrive illegally are being removed. The number goes up, the cost continues to go up, and somebody has to pick up the tab. Making the person repay those costs once they are working—with, say, £10,000 over a decade—could claw back hundreds of thousands of pounds. That is not small change: it is classrooms built, potholes filled and nurses hired. Why are the Government content to let this sinkhole drain us dry when we could balance the books with a system that asks those who are successful to pay back some of these costs?

In his evidence, Tony Smith highlighted the knowledge that such support is available as a pull factor that encourages people to cross the channel. We share Tony Smith’s view that making it clear that the costs of asylum support and accommodation will be recovered once the applicant is economically active could help to disincentivise future crossings. That is why we have tabled new clause 37.

The proposed new clause would enable the Government to treat asylum support like a student loan, with asylum seekers able to pay back the cost of support when they are in paid employment. We believe that if someone’s asylum appeal is granted and they are allowed to remain in this country and they are able to work, they should be required to pay back to the state the costs of their maintenance, as and when they are able. State support is not a right.

This may be our last sitting day; I say this in hopes that it is. Over the last few sittings, having not known the hon. Member for Stockton West, I have grown in admiration for him, because he has had to defend very difficult things from the previous Government. It has felt like he is a goalkeeper standing in front of goal without any gloves on, and balls have been hit at him from every direction, so I do have admiration for him. But this is frankly absurd—it really is bonkers. Is this the hon. Member’s idea, or is it somebody else’s idea that he is having to make a case for? I really hope it is the latter.

To the hon. Gentleman’s electors and mine, these things come at huge cost. As we have set out, that money could be used by the people who pay in to the system, and have done for a very long time. We have drawn an analogy with student tuition fees and I think it is very relevant. I am grateful for the hon. Gentleman’s well-hidden admiration in recent times, but I think this is the right thing to do, and I am well on board with it. State support is not a right, and if a person is able to contribute later by paying some of that back, we believe it is right for them to do so.

We have spoken many times today, and over the course of this Bill Committee’s proceedings, about the fundamental principles of fairness upon which we believe that our immigration system should be built. We have also spoken extensively about the generosity of the British state, and how much it costs to support those who, according to our rules, cannot support themselves. But that generosity, while admirable in what it says about our approach to our fellow man, costs the British taxpayer dearly. As my hon. Friend the Member for Stockton West set out, it costs many billions of pounds a year. It also causes additional pressure on infrastructure and public services, which is not covered by what we suggest here.

We consider that new clause 37, which would introduce the asylum support repayment scheme, is a totally fair way of proposing that people who come to this country are responsible for contributing for the services that they receive. That includes the accommodation that they live in. We do not see any reason why that should be viewed as a negative change, and we really hope that the Government include it in their Bill.

New clause 37 would give the Secretary of State regulation-making powers to set out arrangements for asylum seekers to receive loans towards their maintenance and accommodation—but, as we have discussed in this Committee during scrutiny of the Bill, the costs of accommodating and supporting asylum seekers has grown significantly. The reason for that increase is that the Government inherited an asylum system under exceptional strain, with tens of thousands of cases previously at a complete standstill—the perma-backlog, which we have referred to on many occasions during our proceedings in the past few weeks—claims not being processed, and a record number of people having arrived on small boats in the first half of the year.

While immediate action was taken to restart asylum processing, we cannot resolve the situation overnight. It nevertheless remains our commitment to reduce the cost of asylum accommodation, including by ending the use of asylum hotels. The size of the existing backlog, particularly in appeals, means that we are forced to use hotels in the meantime. That is not a permanent solution, but it is a necessary and temporary step to ensure that the system does not buckle under exceptional strain.

Increasing the speed at which asylum claims can be processed and dealt with is the best way of dealing with this issue of cost, in my view. I think on all sides we want to see the costs come down. We want to see a properly functioning immigration system that delivers fair, timely decisions and manages public funds. Hotel costs have actually dropped from over £9 million a day to under £6 million a day. Overall the Department is planning to deliver £200 million of additional in-year savings in 2024-25, and £700 million of savings against 2024-25 levels during the following financial year, on asylum costs. These measures, taken together, would represent a saving of over £4 billion across 2024-25 and 2025-26 when compared with the previous trajectory of spending.

The Home Office has a legal obligation, as set out in the Immigration and Asylum Act 1999, to support asylum seekers—including any dependants—who would otherwise be destitute: “destitute” is the word that people need to remember there. Asylum seekers can apply for accommodation, subsistence, or both accommodation and subsistence support when they are destitute. Once official refugee status has been given, the individual is able to work in the UK.

Although asylum seekers generally do not have the right to work in the UK while they are waiting on a decision about their asylum claim, there are some instances in which they can apply for permission to work. They are eligible to do so if they have waited over 12 months for an initial decision on their asylum claim, or for a response to a further submission for asylum, and they are not considered responsible for the delay in decision making.

In that context, the new clause proposed by the hon. Member for Stockton West is an interesting one. I would welcome clarification on how such a loan scheme would operate alongside or instead of the current system, and the details of any assessment of the practical or economic benefit of such a scheme. Further scoping would be necessary in order to establish whether it is a feasible option. As such, its inclusion in this Bill is premature.

We are exploring a wide range of options to support ending the use of hotels for asylum seekers and reducing the significant cost to the taxpayer. We are open to interesting ideas, but it is far too early in the approach for us to have a new clause setting it out in this way in the Bill at this time.

The big question is “Who pays?”. There is a huge cost here. I would never seek to get political about the political choices made with funding in recent times—I would not go into the winter fuel payment, or the increase in tuition fees. Tuition fees is an interesting comparator, though, because we ask those who are able to do so to contribute to the costs incurred in delivering them their education. We should be asking people who arrive in this country, who could go on to become very successful, to contribute to some of those costs.

I welcome the Minister’s response. Might she please commit today to a date by which the Home Office at least aims for all migrant hotels to be closed, as per her party’s manifesto commitments? I also welcome what she had to say about bringing down costs. She is right to say that the best way to minimise the Home Office’s bill for asylum accommodation is to process applications as quickly as possible. Where asylum applications are approved, though, most of those costs transfer to the welfare system, so I would be interested to hear her response on who in Government is currently responsible for tracking and understanding that cost.

We inherited a system that was very siloed, where work was not really cross-departmental at all. One example that occurs to me is that the system dealing with all the legacy applications, which the previous Government embarked on dealing with at first-tier tribunal in 2023 and then boasted about having achieved. However, that was only the initial decision in the system; if it was granted, I suppose people felt lucky, but those who were not granted appealed the decision. While the Home Office, under the previous Government, congratulated itself publicly on dealing with that legacy system, many people were actually still in the system.

One important thing we have done since coming into government has been to begin working cross-departmentally to develop metrics on how to deal with an end-to-end system. We are not there yet, and we understand that costs can sometimes be transferred to other areas; that is why I am working closely with the Local Government Association, the Ministry of Housing, Communities and Local Government and the MOJ to try to get the system working more effectively end to end.

I cannot give the hon. Member for Weald of Kent a date on when hotels will close, but I can say that we are doing our best. Given the huge cost and the fact that the contracts for providing them that we inherited from the Conservative party are so expensive, it will certainly be in the interests of saving a lot of money to close them as soon as we can, and we certainly aim to do so.

Again, rightly and reasonably, the Minister talks about lowering costs, but might she say a few words about fairness and the principle that this new clause seeks to speak to: should those who have lived in that accommodation, who have benefited from that provision by the state, ultimately pay it back, if they can afford to?

The hon. Lady will have noticed that I have not dismissed the idea completely, but I do not think the idea is anywhere near a position where one could talk about how it might be practicable, and certainly it is not at a stage where one could consider putting it into primary legislation.

State support is not a right and, if a person is able later to contribute by paying some of it back, we believe it is right for them to do so. We wish to press the new clause to a Division.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 2, Noes 14.

Question accordingly negatived.