Claude Moraes: Parochial racism has made the dispersal policy a terrible failure

'I know that "Paki" is the generic term of abuse because I am an Asian who grew up in Scotland'

Before he was stabbed on Glasgow's Sighthill estate, Devoud, an Iranian asylum-seeker, heard his three Scottish attackers shouting "black bastard". As the media descended on the estate, other residents used the generic and still much-used term of racial abuse in Scotland, "Paki", when talking about Kurdish asylum-seekers in the ugly vox-pops that followed the murder of Firsat Yildiz.

I know that "Paki" is the generic term of abuse because I am an Asian who grew up in Scotland – on council estates first in Dundee then in central Scotland. I remember every incident of being called a "Paki" as though it was yesterday. In the seven years I spent working with asylum-seekers in London, I heard many sickening stories of racial abuse in the capital. Yet Sighthill has raised real anger in me because it is being played out in a country which has for too long had a distorted view of its attitudes towards asylum-seekers and minorities.

Scots are at last growing up when it comes to acknowledging racism in their midst. The Chokar case – a young Asian waiter stabbed to death whose killers were not brought to justice, often called "Scotland's Stephen Lawrence" – was a watershed for many Scots who felt that racism was just an English disease. Faced for many years with low profile, hard working, non-complaining Asians like my own family, it is only recently that younger Scottish Asians have spoke out about a racism which, if you could possibly measure these things, is much rawer and deeper than that felt by confident, economically growing Asian communities in more cosmopolitan areas of the UK. It could be called "parochial racism".

Parochial racism causes feelings of isolation, emptiness and self-consciousness. There is a higher likelihood of petty racial abuse, name calling – and physical attack. And it is often compounded by Islamophobia.

In Scotland, the Asian community is mainly from Pakistan. London has its race problems – but it is cosmopolitan and more at ease with its many cultures. This doesn't make Glaswegians more racist than Londoners. Such generalisations are crass and lead nowhere – but it does suggest that there is raw form of racism in less cosmopolitan areas of the UK where the communities are segregated and suspicious of each other. These are the areas to which asylum-seekers have been sent. As the number "dispersed" to Glasgow has increased from 100 warmly welcomed Kosovan refugees two years ago to 5,000 this month, the city's mask has slipped. Parochial racism has hit the asylum-seekers on the Sighthill estate with full force.

I hope that the murder on Sighthill will shake the complacency of the Scottish institutions on race. In a country with the oldest Asian community outside London, the Scottish Parliament is entirely white. Strenuous efforts are being made by some leading politicians to dilute the racist sentiments of Sighthill residents, but the harassment is simply a repetition of what has happened on a smaller scale in other dispersal areas of the UK.

The Home Secretary has now announced a review into dispersal as a policy. As with the review into the discredited asylum voucher scheme, it has only come about through pressure. It is important that the Government understand how flawed the dispersal scheme has been since its inception.

I know from personal experience that voluntary organisations and agencies on the ground can be highly committed to making dispersal work. But, as a recent Rowntree report showed, concerns were voiced from the outset by the Refugee Council and the groups that represent asylum-seeker communities. These were that inadequate resourcing by government departments, lack of capacity in public services, and weak funding for community and other support groups – in short, dispersal on the cheap – would have serious consequences. That has now happened.

Dispersed asylum-seekers were at risk of receiving poorer legal representation than if they had stayed in London and the South-east. Add to this the mental and physical health problems, language difficulties and racial abuse suffered by often well-qualified asylum-seekers with no work and nearly no income, and we are a million miles from the "fridges and hi-fi" jibes of Sighthill residents.

So what is to be done? First, the Government must, following its year-long review of asylum vouchers, dismantle the discredited voucher scheme. A single adult over 24 living in Sighthill will be getting £10 a week in cash to live on – and £14 in vouchers. Chronic problems with the scheme mean that it is highly likely that some of Sighthill's asylum-seekers will have been weeks without vouchers, having to rely on Glasgow City Council for food. The way that vouchers humiliate asylum-seekers is well known. The stated aim was that they would deter illegal immigrants who come to the UK for our "generous benefits". Government now accepts that this thinking was flawed from the beginning.

And what of dispersal? I believe there will more violence against dispersed asylum-seekers. But there are solutions in sight which the Home Office must consider. They must resource the dispersal scheme properly, and stop parachuting asylum-seekers to sink estates where racists will do their work. The review will have to grasp the issue of whether you go on with compulsory dispersal of families, with the threat of loss of accommodation if they don't move.

Asylum-seekers are not stupid – they may be leaving poverty in London, but that is a city where their communities are established and support one another in a cosmopolitan atmosphere. I've never spoken to an asylum-seeker who thinks differently. Dispersal can only work if some incentive is built in. You cannot imprison people on estates like Sighthill. Like the asylum-seekers who ended up back in London, they will chose to risk destitution over the inhospitality of their estate in Glasgow.

There is another way. The Home Office must understand what parochial racism is all about – few if any in the Home Office or Whitehall have ever experienced it. Then it can take the initiative – otherwise, as with the discredited voucher scheme, it will almost certainly have to do so later.

The writer is a Labour MEP and former director of the asylum and immigration charity JCWI