Labour is planning to offer asylum seekers £100 a week to move out of the migrant hotels as the Government grapples with soaring accommodation costs. Ministers are reportedly considering a new scheme where migrants would use the additional money to live with someone they know, rather than in a taxpayer-funded hotel. The allowance would be given in addition to the £49.18 a week that they already receive.

The current total bill for migrant hotels stands at £5.5m a day, and the scheme - to be trialled next year - aims to reduce this figure to a seventh. The programme hopes to accelerate Sir Keir Starmer's promise to stop the use of asylum hotels by the end of this Parliament in 2029. As of June 2025, more than 32,000 migrants were housed in 200 hotels, according to official data, at a cost of £145 per night, or £1,015 per week.

Official sources indicate that any migrants would be required to provide proof of suitable accommodation and would still be obligated to regularly report to the Home Office.

A source told The Telegraph: "It's important that officials provide advice to ministers that sets out a range of options but it doesn't mean ministers will pursue every option. Nothing is off the table."

The Home Office is also considering offering up to £3,000 to asylum seekers in hotels who are from countries where applications are rejected, the paper has also revealed. The financial aid aims to help migrants "find somewhere to live, find a job or start a business" in their home country through a voluntary returns scheme.

The nationalities who are said to qualify for this payment include Albanians, Bangladeshis, Brazilians, Chinese, Indians, Nigerians and Pakistanis.

Responding to the proposed scheme, shadow home secretary Chris Philp branded the idea as a "disgrace".

He said: "The idea of handing out taxpayers' hard-earned money to people who illegally entered the country is morally repugnant. We should leave the European Convention on Human Rights, which will enable all illegal immigrants to be deported within a week of arrival."

A Home Office spokesman said: "The Government is furious about the number of illegal migrants in this country and in hotels. That is why we will close every single asylum hotel.

"We make no apology for saving taxpayers millions of pounds by removing individuals who have no legal right to remain in the United Kingdom, or who are seeking to leave voluntarily."