The Compassion Trap

Why You’ll Be Paying £10 Extra Council Tax for Labour’s 56-Day Asylum Illusion

In a Britain groaning under the heaviest tax burden since 1945, where households have seen energy bills leap 54 per cent since 2021 and real wages still shrinking, one might forgive the public for expecting Parliament to tread carefully with the nation’s wallet. Instead, a quiet little bill is gliding through the House of Lords that will, with the stroke of a pen, add between £5 and £10 to every single council-tax demand in the land. Not for filling potholes, not for keeping the libraries open, but to give asylum seekers an extra 28 days of Home Office support before the bill is handed, unceremoniously, to you.

The Asylum Support (Prescribed Period) Bill [HL] — introduced by the Liberal Democrat peer Lord Thomas of Gresford in October 2024 and now approaching Third Reading — doubles the “move-on” grace period from 28 days to 56 for anyone whose asylum claim has been decided, whether granted or refused. Labour peers and crossbench bishops speak of it in the warmest terms, ending the “cruel cliff-edge”, preventing destitution, a small act of elementary decency. The Home Office pilot launched in December 2024 proudly reported a 40 per cent fall in immediate homelessness referrals. Charities queue up to applaud. What could possibly be wrong with a little more time?

Everything. Because day 57 is when the conjuring trick is revealed. The extra 28 days do not avert the crisis, they merely postpone it, shifting the cost from Whitehall’s balance sheet to the bankrupt ledgers of local government — and, ultimately, to the 28 million chargeable dwellings whose owners are already paying through the nose.

The mechanics are brutally simple. When an asylum claim is resolved, Section 95 support — currently £49.18 a week plus free accommodation — ceases. The bill extends that to 56 days. For the 10–15,000 people each year who do not appeal (roughly 35 per cent of refusals), the Home Office will spend an extra £25–40 million. So far, so transparent. What ministers never mention is what happens next.

Local council data for 2024–25, including a study of 77 refugees in Oxford, shows that only around 12 per cent moved directly into stable private rented housing within the original 28 days, with many more experiencing homelessness. The average delay in issuing Biometric Residence Permits and activating Universal Credit is 35–56 days — exactly the length of the new grace period. By early 2025, some 15,200–18,000 former asylum seekers had sought council homelessness aid—a sixfold rise since 2020—driving local costs up to over £2 billion annually for temporary accommodation alone, more than double 2009 levels. The No Accommodation Network reports that 85 per cent still fall into destitution within three months of support ending. The pilot’s much-vaunted 40 per cent drop in immediate rough sleeping? A statistical mirage. Compassion on the never-never.

And who picks up the tab when the 56 days expire? Not the Home Office. Local councils, bound by the Housing Act 1996 to prevent homelessness, must provide emergency accommodation — typically £80–£120 a night in a budget hotel or B&B. The Home Office dispersal grant is a derisory £1,200 per person — enough for ten to fifteen nights at best. The rest falls on councils already staring into the abyss.

Take Hillingdon, the west London borough that contains Heathrow. It is burning through £5 million a year on asylum evictions alone — a sum equal to its entire libraries and cultural-services budget. The council is now openly threatening a judicial review against the Home Office for dumping newly-granted refugees on its doorstep without a penny of extra funding. Kent County Council, the traditional front line for Channel arrivals, faces an £81 million budget gap and its leader has warned that a Section 114 bankruptcy notice is becoming “increasingly likely” without a rewrite of the funding formula. Bradford, another dispersal hotspot, has just imposed a 9.99 per cent council-tax rise and is reviewing youth services that will almost certainly mean more centre closures — while hotels in the city fill with people the Home Office supported for 56 days and then forgot.

London Councils reported a £330 million overspend on homelessness in 2024/25 — 60 per cent above budget — with asylum-related cases a fast-growing component. Seven London boroughs have applied for over £400 million in Exceptional Financial Support for 2025/26, a six-fold increase in twelve months. The national average Band D council-tax bill rose 4.99 per cent last April — the legal maximum without a referendum — adding £109 to the annual demand. Of that, £5–£10 per household can be traced directly to the deferred costs of this bill.

The sting is not merely financial, it is exquisitely regressive. Council tax is still based on 1991 property values — a valuation exercise carried out when the internet was a novelty and Tony Blair was an unknown backbencher. A semi-detached house in Slough valued at £80,000 in 1991 (now worth approximately £450,000) sits in Band D and pays £2,280 a year. A Kensington townhouse valued at over £320,000 in 1991 (now approximately £5 million-plus) is in Band H and pays £3,138.92 — less than one-tenth of one per cent of its current worth. The Institute for Fiscal Studies calculates that revaluing properties and adding higher bands would raise £9–12 billion a year with minimal administrative difficulty. Instead, we have a system in which the bottom half of households by income pay an effective council-tax rate two to three times higher than the top decile.

So the working families of outer London and the provincial cities — the very places absorbing most dispersed asylum seekers — are subsidising a policy that allows ministers to pose as compassionate while protecting the Chelsea basements and Kensington piles that vote Labour in ever greater numbers.

Europe, meanwhile, manages the same challenge with more sustainable funding for municipalities, avoiding the UK’s acute local strains. Germany ties asylum support cessation to mainstream benefits activation—no arbitrary cliff-edge—and channels €3–3.5 billion annually to states and municipalities for integration, equivalent to ~€300–500 per refugee per month for up to three years. The result? Around 50–60 per cent employment within two years and destitution risks of 15–20 per cent. The Netherlands incentivizes local housing with up to €30,000 per status holder, aiding ~60 per cent to achieve stable accommodation within six to twelve months amid shortages. Sweden’s state-municipal partnership provides ~€6,000–9,000 per refugee annually for two to three years, yielding 50–60 per cent employment after three years. Britain, by contrast, opts for a more punitive model—temporary status and deferred local costs—that burdens the poorest taxpayers disproportionately.

The political choreography is almost admirable in its cynicism. Labour peers preen about “ending the cliff-edge” while rejecting an amendment that would have fixed the entire problem for £50–100 million a year: simply keep support running until the Biometric Residence Permit is issued and Universal Credit is activated. Ministers waved it away as “administratively complex”. Translation: it would have kept the cost on the Home Office balance sheet where the public could see it, rather than quietly shunting it down to council tax.

And let us not forget the Home Office’s recent form. Under the previous Conservative government it squandered £700 million on a Rwanda scheme that managed precisely four voluntary deportations, while writing off another £48.5 million on the empty RAF Scampton site. Competence, it seems, has long been optional when the bill lands elsewhere.

Next April, when your council-tax demand lands with its inevitable £100-plus increase, pause for a moment and ask yourself a simple question. Will you still believe that adding another 28 days to the asylum grace period was an act of mercy — or will you recognise it for what it is, the moment the British state decided that the easiest wallet to pick belonged to you, the ordinary council-tax payer, while protecting the wealthy and pretending the problem had been solved?

Because when the trapdoor finally opens on day 57, it is not the Home Office that falls through. It is your library, your youth club, your park — and, soon enough, your faith that anyone in Westminster is on your side.

#CouncilTax#Asylum#Immigration#CostOfLiving#Tax

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