Sir Keir Starmer has confirmed Labour would resume processing asylum applications for people who have previously arrived in the UK illegally.
Under a law passed in July last year, tens of thousands of such people, including those who arrived on small boats, are effectively blocked from gaining refugee status.
Conservative ministers say they plan to remove them from the UK, either under the Rwanda scheme or to other countries.
The Labour leader said this was not happening, and the policy had proven to be the “absolute opposite of a deterrent”.
The Conservatives have branded Labour’s stance an “amnesty” for illegal migrants.
But Sir Keir argued: “At the moment, 100% of those arriving in this country are staying for life at the taxpayer’s expense”.
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The government’s Illegal Migration Act prevented an estimated 50,000 arrivals to the UK since last year from being granted refugee status.
In theory, they are supposed to be removed from the UK when certain parts of the act are brought into force.
But critics say the legislation has left them “in limbo” because many cannot be legally returned to their country of origin, whilst the government’s scheme to send asylum seekers to Rwanda is not up and running.
Speaking to BBC Breakfast, Sir Keir said that if elected at next week’s general election, Labour would allow illegal arrivals to have asylum claims considered.
“For years, the system in this country has operated on the basis that if someone claims asylum, they are processed,” he said.
“Does anybody seriously think that not processing the claims, when now record numbers are coming across the Channel, is operating as a deterrent?”
Labour plans to scrap the government’s Rwanda scheme, arguing it would only ever account for a fraction of illegal arrivals and would fail in its aim of deterring people from crossing the English Channel in small boats.
Instead, it argues it could do more to tackle the gangs smuggling people across by giving police greater powers and hiring specialist investigators.
Sir Keir added: “I don’t accept that the only answer to this conundrum is what we do when people have arrived.
“Just because the government has lost control of the borders at the Channel, I’m not prepared to take the same route”.
‘Perma-backlog’
Labour is yet to set out in detail how it would resume applications for those who have previously arrived illegally.
Its election manifesto did not commit explicitly to repealing the Illegal Migration Act, but said “unworkable laws” enacted by the Tories had left thousands of people in taxpayer-funded hotels in a “perma-backlog” of claims.
Party figures have previously suggested that claims made before the election would be processed, with a new framework governing those arriving afterwards.
When pressed on the issue, the Labour leader said claims would be processed “though the system that’s been in place for years”.
According to the Daily Telegraph, the party believes it might be able to resume processing asylum applications immediately under one section of the act.
The Refugee Council, a charity representing refugees, has estimated that 73% of people crossing the Channel last year would be recognised as refugees if their claims were processed.
But it has warned that under the government’s current arrangements, the number stuck in asylum “limbo” could rise to over 100,000 people by the end of this year.