Asylum seekers who break the law or work illegally are to be thrown out of Government-funded accommodation and lose their support payments.
The rule change means only those with legitimate asylum claims who follow the rules will get taxpayer-funded support, Home Secretary Shabana Mahmood said.
The measures, coming into force in June, will remove support payments and accommodation to asylum seekers who illegally work, have the ability to support themselves, have the right to work or have broken the law, the Home Office said.
The statutory legal duty under EU law to provide asylum seekers with support and accommodation will be replaced with a conditional approach.
The Government is determined to make the UK a less attractive destination for illegal migrants.
Ms Mahmood said: “Britain will always provide refuge to people fleeing war and persecution.
“But taxpayers cannot be expected to fund the lives of those who exploit the system or break our laws.
“Asylum support and accommodation will now become conditional – reserved only to those who play by our rules.”
Last year a total of £4bn was spent on asylum support in the UK, and as of December there were 107,003 people in receipt of asylum support with 30,657 in around 200 asylum hotels, the Home Office said.
The issue of people being housed in hotels rose to prominence last year with protests outside some sites.
Labour has pledged to no longer be using asylum hotels by the end of this Parliament, which would be 2029, if not earlier.
In October, the Government announced that barracks in Scotland and southern England would be used to house around 900 men temporarily, as part of Government efforts to stop using hotels to temporarily house asylum seekers.
A charity boss said the Home Secretary was looking for “a bump in the polls” with the move.
Tim Naor Hilton, chief executive of Refugee Action, said: “The Home Secretary already has the power to deny support and accommodation to people seeking asylum who are not destitute or who have broken the rules.
“This is the latest in a long line of announcements from successive governments that bullies refugees for a bump in the polls rather than try to solve the real problems faced by people and communities – poverty, homelessness, and the rise of the far right.
“Ministers must end this dangerous race to the bottom and make the case for a UK that welcomes people fleeing war and torture and supports them to rebuild their lives here.”
Amnesty International UK’s Naomi McAuliffe said: “This proposal is scapegoating and cruelty masquerading as strength.
“It is the latest punitive blow being dealt to some of the most vulnerable people in our society.
“People seeking asylum are often fleeing conflict, persecution and grave human rights abuses.
“Removing access to basic support and accommodation risks forcing people into destitution, homelessness and exploitation while they wait for their claims to be decided.
“The UK has clear obligations under international human rights and refugee law to ensure that people seeking protection are treated with dignity and are not left without the means to survive.
“Punitive policies that strip away basic support do nothing to fix delays in the asylum system or create fairness.”
Responding to the announcement, shadow home secretary Chris Philp said: “Labour should put foreign criminals on a plane home, not onto British streets.ill
“If Labour had a backbone and deported all illegal immigrants, there would not be the need for asylum accommodation. Foreign nationals who commit crimes should be deported anyway.
“Labour have deported only 6% of illegal arrivals since coming to office, so rolling out another gimmick will not change a thing.”
Reform UK’s home affairs spokesman Zia Yusuf said: “This Labour Government is taking the British people for mugs.
“Thousands more have crossed the channel illegally already this year and will get free hotel accommodation at taxpayer expense.
“All Labour are doing with this announcement is doubling down on that.
“Reform will deport every single migrant here illegally.”
Ms Mahmood will lay out further measures to toughen up the UK asylum system in a speech on Thursday.
Under the widely trailed plans, asylum seekers in the UK will have their refugee status reviewed every 30 months in an effort to make the UK less attractive for illegal immigrants.
Refugees whose countries are deemed safe will be expected to return home.
The Home Secretary believes the Government must cut migration or risk opening the door to the right who would divide communities with the kind of anti-immigration raids seen in the US.
The policy shift is modelled on Denmark’s system, a firm approach admired by Ms Mahmood.
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