Anger after Blunkett says refugees must carry ID cards

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Asylum-seekers are to be forced to carry identity cards bearing their photographs and fingerprints under an overhaul of immigration policy announced yesterday by the Home Secretary.

Refugee support groups immediately attacked David Blunkett for introducing a measure that they said would "stigmatise" asylum-seekers even more than the hated voucher system, which the Government announced it would phase out.

Home Office sources denied last night that the new "smart" identity cards, that will incorporate the latest security features, were a forerunner for a national ID card programme.

Among other changes, the Home Secretary will spend £250m in two years on building four "accommodation centres" that will provide full board, education, health care and legal advice for up to 8,000 asylum-seekers a year. Residents will be free to leave the centres – likely to be former military camps outside of major areas of population – but will be required to spend the night at the sites.

The food and clothing voucher system will be phased out by autumn next year. Officials are looking at giving asylum-seekers bank accounts and paying them a small allowance by automated credit transfer.

A further £111m is to be spent over two years in speeding up the asylum adjudication process and an extra 1,200 detention places are to be created to increase removals of those whose claims have failed.

Mr Blunkett told MPs: "I believe it will send a message to the rest of the world that the UK is not open to abuse but nor is it a fortress Britain."

The Home Secretary published a damning review of policies introduced three years ago by his predecessor Jack Straw to overhaul the asylum system. The review concluded that the voucher scheme had been "vulnerable to fraud... [and] black market activity". The system was also "stigmatising" to those issued with the vouchers.

It concluded that the dispersal system, by which asylum-seekers were moved out of London and the South-east mainly to accommodation in the north of England and Scotland, could "exacerbate racial tensions". A Kurdish man housed on Glasgow's deprived Sighthill estate was stabbed to death earlier this year.

But, contrary to some earlier reports, the Government is not planning to abandon the principle of dispersal and will continue to place asylum-seekers around the country in "clusters" of common language.

Under a new three-tier system, all asylum-seekers will initially be required to report to new "induction centres", where they will be given health checks and informed in their own language of their rights.

They will then be dispersed to the 750-bed accommodation centres – which will not open until 2003 and will only cater for a minority of the 70,000-plus annual asylum applicants – or allowed to find their own housing, whereby they will forgo benefits and will be required to maintain contact with new Home Office "reporting centres".

Where applicants have failed in their claims they will be liable for placement in a secure "removal centre" so that they can be deported more easily.

Refugee groups yesterday welcomed the phasing out of the voucher system.

But Bill Morris, general secretary of the Transport and General Workers' Union, warned against introducing a "plastic voucher system" in the form of the smart cards.

Mr Morris, who persuaded the Government to review the voucher scheme after a threatened revolt at last year's Labour party conference, said a plastic card "would retain all stigmatisation and division of the present system".

Robina Qureshi, director of Positive Action on Housing, said: "The 'smart cards' are not better than vouchers, they are worse and will criminalise and stigmatise asylum-seekers even more with the use of fingerprints and photographs."

The Joint Council for the Welfare of Immigrants warned that the accommodation centres could be "susceptible" to racist attacks. The Refugee Council said the centres, where people may live for six months or more, risked "institutionalising those placed there".

Alisdair McKenzie, director of Asylum Aid, said: "The only workable option is for people to live in the community and have access to proper advice and support services."

Mr Blunkett also promised to introduce a new programme for migrants with "exceptional skills" to apply to come to Britain, and to allow more foreign graduates from British universities to stay and work.