Parents living in England’s poverty capital have bemoaned the treatment of asylum seekers getting handouts while they struggle to survive on Universal Credit with the two-child benefit cap.

In Newport, Middlesbrough, six out of seven children are currently classed as living in poverty, meaning their households have an income that is 60 percent less than the national average.

Residents Lee Stevenson and Gemma Grafton, who welcomed their third child Ivie three months ago, said they struggle to afford to cover even the basics such as food and clothes each month.

Yet they have been left furious by what they see as free handouts to migrants and asylum seekers, many of whom arrive in the UK by small boat.

‘I think a lot of people’s backs are up because they get the food vouchers, they get the free mobile phones, free [school] uniforms, driving lessons, the houses,’ Ms Grafton said.

‘It’s sort of like a kick in the teeth to think well why do we get none of that, why are they getting it all?’

It comes as Nigel Farage’s Reform UK today accused Rachel Reeves of ‘treachery’ for spending ‘extortionate’ amounts on foreign nationals ahead of the Budget later this month.

At a press conference with Farage and policy chief Zia Yusuf, Reform set out proposals include slashing overseas aid, restricting benefits for migrants and deporting foreign criminals while accusing the Chancellor of planning de facto tax rises.

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Lee Stevenson and Gemma Grafton, who welcomed their third child Ivie three months ago, said they struggle to afford to cover even the basics such as food and raged at what they see as free handouts to asylum seekers

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Cash-strapped families in Britain’s poverty capital are frustrated at accommodation and other benefits given to asylum seekers who arrive in the UK on small boats

Ms Reeves is expected to use her Budget to freeze income tax thresholds, impose a new mansion tax on the most valuable properties and charge electric car owners for every mile they drive.

But Reform UK have called on the Chancellor to take extreme measures such as slashing the foreign aid budget from £13.7 billion earmarked for 2025-2026 to £1 billion, and accused her of ‘impoverishing its own citizens’.

The hardship is being felt acutely in Middlesbrough, where families are calling for the abolition of the two-child benefit cap.

Although Mr Stevenson is employed the family still receives Universal Credit and say that lifting the cap would make a real difference.

‘We don’t seem to have enough money some months to cover the basics that you need,’ Mr Stevenson told Sky News.

‘It would be nice to have a constant full fridge of everything that my kids want, full cupboards, all the snacks and just being able to say we’re going out for a day now. We’ll go out and have a fun day out.’

Ms Grafton added: ‘Having to tell the kids to take it easy, that’s not nice.

‘When the kids are just wanting to help themselves to get what they want and we have to say you know ‘try and calm down on what you’re eating because we haven’t got the money to go and get shopping in until we get paid’. That’s quite hard.’

Under current legislation, asylum seekers who arrive in the UK are given a basic weekly allowance and housing, typically in hotels or other temporary accommodation. Once they have been granted asylum, they must move out of their initial housing but can then apply to their local council for help.

Some councils allow them to apply for a school uniform grant, typically £100, for children as well as providing driving lessons for young people who arrive in the UK unaccompanied.

Mobile phones are not provided by the government but charities such as Screen Share do source devices for asylum seekers.

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Ms Grafton described funding spent on migrants and asylum seekers as a ‘kick in the teeth’ and said her family faced having to not pay rent in order to afford everything their new baby needed

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Home Secretary Shabana Mahmood set out her plans in the Commons on Monday and fiercely rejected claims from her own party that she was trying to ‘out-reform Reform’

Meanwhile Mr Stevenson and Ms Grafton say that their unexpected third pregnancy left them struggling to make ends meet.

They live in one of the most deprived areas of the country, with more than half of children across the whole of Middlesbrough growing up in poverty.

The two-child benefit cap meant that despite having an additional member of the family their universal credit payments did not increase, leaving them facing desperate choices.

Ms Grafton said: ‘Everything had to be bought all over again didn’t it because of such a huge age gap [to our other children], so you don’t realise that having to start from scratch, buying a baby everything that they need, it’s pricey.’

She continued: ‘Obviously we have to buy all of the stuff so we had to pay half of the rent one month, just to make sure we had the money to cover us.

‘It’s stressful because if you get into arrears with your rent, they’re on your case, threatening you with court, losing your house so there is the worry of that.’

It comes as the government yesterday set out a raft of new policies aimed at reducing the number of asylum seekers and migrants who come to the UK.

But with them yet to be implemented, for Mr Stevenson and Ms Grafton in Middlesburgh, the announcement does nothing to relieve their financial burden.

‘I dread to think of the future for my kids it’s gonna be a million times worse if the country keeps going the way it is now for my children, and also for me,’ Mr Stevenson said.

While struggling families are hitting out at the funds spent on asylum seekers, in government the pivot towards harsher immigration rules is already dividing the Labour Party from within.

The proposals include seizing the assets of asylum seekers and forcing people to wait 20 years before becoming eligible for permanent settlement.

They would also only guarantee asylum seekers residency in the UK for an initial 30 months, before their status and the safety level of their country of origin is reviewed.

There will be no automatic right for family reunion except in ‘exceptional’ circumstances and housing and weekly allowances will no longer be available for those able to work or with assets which could be used to fund their subsistence instead.

The government hopes these measures, as well as a rumoured increase in payouts to those leaving the UK, will see more asylum seekers return to their home countries rather than staying indefinitely in Britain.

The latest Home Office figures show 111,084 people applied for asylum in the UK in the year to June 2025. This is the highest number for any 12-month period since current records began in 2001.

Almost 40,000 people have arrived in the UK after making the dangerous journey across the Channel since the beginning of the year.

Home Secretary Shabana Mahmood set out her plans in the Commons on Monday and fiercely rejected claims from her own party that she was trying to ‘out-reform Reform’, telling visceral stories of her own experiences of racism.

‘I couldn’t care less what other parties are saying. There is a problem here that needs to be fixed,’ she added.

Defending the policy shift this morning, cabinet minister Steve Reed said that ‘every single’ Labour MP was elected on a manifesto commitment to secure the UK’s borders.

‘We can’t go on like this, it is tearing the country apart,’ he said.

Mr Reed backed a controversial element of the proposals that could see the deportation of families, including children, who have been denied asylum in the UK and refused payments to return to their home countries.

Stressing that families would not be separated, he told Times Radio: ‘We know that we need more safe and legal routes so that families who have the right to come here and seek asylum can get into the country, but we can’t continue to allow incentives to exist that result in children drowning in the Channel.’

Mr Reed would not say by how much the cash incentive encouraging them to leave might rise, noting it was subject to consultation. Currently, the payments are capped at £3,000.

He continued: ‘I think it’s perfectly reasonable to give people financial support to make the journey back to their home.

‘In the long run, it’s cheaper for the British taxpayer to do that.’

Party rebels challenged Ms Mahmood over the plans, with former Labour frontbencher Richard Burgon saying the policy ‘scrapes the bottom of the barrel’ and was ‘a desperate attempt to triangulate with Reform’.

Ian Lavery said that if the Tories and Reform are backing the new policies, ‘is it not time to question whether we’re [Labour] actually in the right place?’.

Stella Creasy said the plans would leave refugees in ‘a permanent sense of limbo’ and Nadia Whittome said it was ‘shameful that a Labour Government is ripping up the rights and protections of people who have endured unimaginable trauma’.

Simon Opher said Labour should ‘stop the scapegoating of immigrants because it’s wrong and cruel’, adding ‘we should push back on the racist agenda of Reform rather than echo it’.

But Ms Mahmood last night rejected criticism of her plans and, when asked about comments from Nigel Farage about whether she was ‘auditioning’ to be a member of Reform UK, she told Sky News he could ‘sod off’.

‘I’m not interested in anything he’s got to say,’ she added.

In better news for the Home Secretary she was backed by some Labour MPs from traditional Red Wall seats, such as North Durham MP Luke Akehurst.

He said his constituents were ‘worried and angry’ about the relocation of asylum seekers locally and said restoring control of the border was ‘one of the most basic and fundamental functions of government’.

Bassetlaw MP Jo White said ‘enforcing the immigration rules, including removals, is in the public interest’.

Ms Mahmood also won support on the Tory benches, with MP Sir Edward Leigh praising her ‘strong Conservative principles’.

And even Nigel Farage at a press conference in central London today said Reform UK would ‘rhetorically’ agree to ‘a lot of what the Home Secretary said’.

But former Labour leader Jeremy Corbyn accused Ms Mahmood of ‘trying to appease the most ghastly Right-wing forces’, while fellow Your Party founder Zarah Sultana said her comments were ‘straight out of the fascist playbook’.

It comes as new ONS data revealed on Tuesday that the record level of net migration was even high than previously thought at 944,000, but has since fallen sharply.

Revisions to ONS data showed net migration – the difference between the number of migrants coming to live long-term in Britain minus the number of people emigrating – was 944,000 in the year to March 2023.

Previous figures had indicated the highest point was 906,000 in the year ending June 2023.

At the same time hundreds of thousands more British citizens are leaving. Over a four year period from 2021 to 2024, 344,000 more British nationals emigrated than previously thought, in net terms.

Overall emigration by British nationals over the period was 650,000 higher, and immigration by returning Brits was 306,000 higher, meaning net emigration was 344,000 higher.

Last year alone the number of Brits leaving the country was 257,000, far above than the 77,000 the ONS had previously estimated.

‘Our new methods cause an upward revision in our British nationals emigration estimate over the past few years,’ an ONS spokesman said.

Statisticians also said there had been a ‘sharper fall’ in net migration since the peak was hit in 2023.

In May this year the ONS published estimates showing net migration was 431,000 in 2024 but today’s latest data revised that downwards to 345,000.