Asylum seekers who have waited more than six months for a decision on their claim would be given the right to work under a new bill brought forward in parliament.
The SNP's Carol Monaghan accused the government of "wasting the talents of thousands of people" as she launched a Commons bid to halve the wait for those seeking asylum to be allowed to work.
People seeking refugee status are currently prevented from working while their claim is being processed, leaving them to struggle to support their families on just £5.39 a day.
Asylum seekers can only apply for the right to work after they have been waiting for a decision on their claim for more than a year. Even then, they can only fill roles on the shortage occupation list, such as geophysicists and Mandarin teachers.
If the bill passed into law, asylum seekers would be able to work six months after lodging their claim.
Ms Monaghan, the MP for Glasgow North West, said: “Right now, the UK government is wasting the talents of thousands of people who could be, and want to be, contributing to their communities and the wider UK economy because of the isolationist approach to migration.
“It is high time the Tories took a leaf out of Scotland’s book when it comes to being an open and welcoming country.
"People seeking asylum are fleeing dangers we can’t even begin to imagine – they should be given the chance to start a new and good life by being granted the right to work.”
Her private member's bill, which is being tabled on Wednesday, is understood to have cross-party support. However it is unlikely to make it onto the statute books without government backing.
Stephen Hale, chief executive of Refugee Action, which is campaigning to lift the ban on allowing refugees to work, urged ministers to intervene.
“People seeking asylum are left to languish in limbo and in poverty because of this morally and economically shortsighted rule that stops them working," he said.
“There is strong public, business and cross-party support to give people seeking asylum the right to work. It’s high time the government acted now and lifted the ban.”
It comes as Boris Johnson prepares for a post-Brexit immigration shake-up, with a major new bill expected in the coming months to set out its plans for an Australian-style points system.
The prime minister has also been criticised for stripping protections for child refugees from his Brexit legislation, although No10 insists the government's commitment to vulnerable migrants has not changed.
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