Allow asylum seekers to work

Policy baseline

Party costings claim GBP 4.29bn savings from backlog reduction and work rights. That requires large administrative delivery gains.

• Targets asylum seekers awaiting decisions.
• Savings come from accommodation and support costs.
• Work rights add tax receipts.

Core trade-offs

The direct beneficiaries are asylum seekers and taxpayers if costs fall. The costs fall mainly on some local services and low-wage labour markets. The main economic question is backlog savings may be slower than claimed.

• Asylum seekers and taxpayers if costs fall gain most directly.
• Costs fall mainly on some local services and low-wage labour markets.
• Key risk: backlog savings may be slower than claimed.

Fiscal impact by 2028-29

-GBP 4.5bn to +GBP 0.5bn. Central estimate: -GBP 2.0bn.

• Positive numbers mean net fiscal cost; negative numbers mean Exchequer savings.
• Main channel is the scored tax, spending or delivery change.
• Offsets depend on tax receipts, behaviour and pass-through.
• Range reflects uncertain implementation and economic response.
• This is not an official costing.

Economic impact by 2028-29

• Jobs: More legal work may raise labour supply; enforcement costs depend on capacity.
• Wages: Eligible asylum seekers gain wages; some local low-wage competition may rise.
• Prices: Lower accommodation costs may reduce public procurement pressure.
• GDP / productivity: Likely positive if work rights replace enforced inactivity and costly support.

Assessment

This is a real trade-off, not a free gain. Asylum seekers and taxpayers if costs fall benefit, while some local services and low-wage labour markets bear most costs. Overall output depends on behaviour, capacity and pass-through.

Confidence: Medium-low. Higher on the policy target and fiscal channel; lower on behaviour, pass-through and economy-wide effects.

Main risks

• Capacity risk: Backlog, processing and enforcement constraints may limit savings.
• Local pressure: Short-run housing and services pressure may remain.
• Wage effects: Low-wage labour supply can affect some local workers.

Safeguards

• Grant work rights with rapid processing.
• Track support-cost and tax changes.
• Coordinate local housing and services.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology for allow asylum seekers to work Internal - PolicyLens, 2026
• The Fiscal Effects of Immigration to the UK Academic article - Dustmann and Frattini, Economic Journal, 2014
• Funding a Fair Deal: Liberal Democrat Manifesto Costings Party costing - Liberal Democrats, 2024
• The Impact of Immigration on Wages Academic article - Manacorda, Manning and Wadsworth, Economic Journal, 2012
• For a Fair Deal: Liberal Democrat Manifesto 2024 Party policy source - Liberal Democrats, 2024

Other Liberal Democrats policies

• Introduce free personal care
• Raise Carer’s Allowance by GBP 20
• Create a Carer’s Minimum Wage
• Scrap two-child and benefit caps
• Recruit 8,000 more GPs
• Guarantee urgent NHS dentist access
• Put counsellors in schools
• Extend free school meals