This article focuses on recent policy in relation to asylum which has created a new social category of asylum seeker, increasingly portrayed as 'undeserving' in contrast to the 'deserving' refugee. Asylum policy in Britain is preoccupied with control, with no national system for the settlement of refugees. The new social support system for asylum seekers, particularly the voucher system and compulsory dispersal, serve to isolate them from society and promote intense social exclusion. Policies to promote the social inclusion of recognized refugees are limited, uneven and dependent on voluntary initiative. They are also harmed by the punitive system of social support for asylum seekers. Acute recent labour shortages, which have forced employers to recruit overseas, have opened up the debate on immigration, and present the possibility of developing a more progressive agenda based on a commitment to human rights.