Straw pressured into review of asylum vouchers

The government will today try to head off a conference revolt over its controversial voucher scheme for asylum-seekers by promising an urgent review of the system.

The government will today try to head off a conference revolt over its controversial voucher scheme for asylum-seekers by promising an urgent review of the system.

After intense discussions with union leaders, Jack Straw, the Home Secretary, has indicated he will conduct a wide-ranging "social evaluation" of the policy to check its impact on the dignity and possible harassment of foreign nationals.

Under a last-minute deal struck yesterday, Mr Straw will also promise immediate moves to tackle the problem caused by rules that ban shopkeepers from giving change in cash when they use their vouchers.

The "no change" rule was introduced to ensure asylum-seekers could not hand over vouchers to buy items for small amounts simply to pocket the difference in cash. But critics say the policy means supermarkets and other traders profit if a refugee cannot match his purchases exactly to the value of vouchers handed over. The Home Office said last night it will reduce the smallest denomination of vouchers from 50p to 10p. It will also look at allowing even smaller amounts of change to be paid in cash.

The compromise, and the promise of a review, is likely to mean the Transport and General Workers Union (TGWU) will not pursue its conference motion attacking the Government today. But Bill Morris, the union's general secretary, will still launch a bitter attack on the "degrading and inhuman" vouchers introduced by the Home Office in April to deter bogus claimants.

Mr Morris, who led the criticism of the Government on asylum with an article in The Independent in April, will say the system "stigmatises the victims and creates new targets for racist attacks". He has also privately told Tony Blairthat it will be a "terrible irony" if the conference has to defeat the leadership on the asylum issue on the same day Nelson Mandela addresses to the party.

Mr Morris will also say the no-change rule has led to a "grotesque situation of taxpayers and asylum-seekers subsidising Sainsbury's and Tesco". Adult asylum-seekers are given £36.43 a week in vouchers of various denominations but can exchange only £10-worth for cash.

Pressure on the Government to scrap the rule intensified yesterday when a leaked memo showed civil servants had warned ministers that supermarkets would profit from asylum-seekers and conflict with retailers was likely. Advice to ministers before the Asylum Bill was pushed through Parliament last year stated: "Refusal to give change will ... [and] present retailers with the opportunity for profit at the expense of the destitute."

Last night, a senior Home Office source said there was no objection to a "fundamental review" of the system, which will start this year and will be measured against a series of social objectives. Barbara Roche, the Immigration minister, confirmed there would be a detailed review of the system to meet the concerns of its critics, but she said the system was already operating successfully.

In a separate leak, a paper drawn up by Sodexho, the Belgian firm hired to run the system, advised retailers: "Don't miss this revenue-making opportunity. Vouchers will be the beneficiaries' only method of buying essential living products. No change is given, but you will receive the full value of the voucher."