John Swinney has been urged to stop ignoring the asylum hotel crisis and to address the ‘open-door policy’ that attracts illegal immigrants.

In anticipation of a heated debate in Holyrood, the Scottish Conservatives accused the First Minister of being ‘in denial’ about the problem’s gravity in the north.

MSP Craig Hoy claimed the SNP’s approach was ‘helping criminal gangs’ find customers.

The Conservative party’s debate on Wednesday is set to call for ‘the immediate closure of all asylum hotels in Scotland’ and caution that the SNP’s pursuit of increased immigration will result in ‘even more asylum seekers arriving in Scotland’.

The party will also admit the Conservative-era policy of asylum hotels was ‘a mistake’.

It follows weeks of demonstrations outside hotels in Perth, Aberdeenshire and Falkirk.

Saltire flags have been hung on lampposts across Glasgow and Aberdeen in protest.

The SNP leader of Glasgow, which has the most asylum seekers of any UK council, last week warned the growing demand was financially ‘unsustainable’.

Susan Aitken highlighted that the city is facing a £90 million ‘budget gap’ for the next year, with £66 million stemming from a homelessness overspend. This is exacerbated by asylum seekers being granted refugee status while in Glasgow, alongside additional refugees coming from other parts of the UK.

Under Scotland’s accommodating housing policies, single men and ‘priority need’ families are eligible for council-funded homeless accommodation, regardless of local ties.

But last week, Mr Swinney said he wanted more migration, proclaiming: ‘Our saltire is a flag of welcome – and refugees are welcome here.’

Mr Hoy said: ‘The current system of housing asylum seekers in Scotland can’t continue because it’s financially unsustainable.

‘The SNP council leader in Glasgow, who is presiding over a housing emergency in the city, has admitted as much.

The situation where illegal immigrants get prioritized for housing can understandably lead to resentment among long-standing Glasgow residents and legal migrants who are waiting for social housing.

‘We need to close hotels housing asylum seekers in Scotland. This practice, which increased under the last UK Conservative government, is not working and was a mistake.’

Calling on the Scottish and UK Governments to work together, he said: ‘The SNP’s open-door attitude towards illegal immigrants is only helping criminal gangs who make their fortune by preying on desperate individuals.

‘John Swinney is in denial about the scale of this crisis. He is burying his head in the sand.

‘As the number of illegal immigrants coming to the UK and Scotland continues to grow under Labour, he and the Starmer government must act decisively to impose effective deterrents.

‘Britain should be a place for people to live, not a hotel for those seeking to come illegally.’

New Home Secretary Shabana Mahmood yesterday said the UK could suspend visas for countries that refuse to take back migrants as she vowed to do ‘whatever it takes’ to stop small boat crossings.

Although immigration is a UK issue, many services for refugees and asylum seekers are devolved, including health, education, care of children, social care, legal aid and homeless accommodation

As of June 30, Glasgow was housing 3,844 asylum seekers, around 90 per cent of the Scottish total, and almost 40 per cent more than next highest UK council, Birmingham.

London has the most of any city, but they are spread over more than a dozen councils.

There are no asylum seeker hotels in Glasgow, as other types of housing are used under a deal between the Home Office – which disperses asylum seekers – and the Mears Group.

But if asylum seekers are granted refugee status, they often become homeless, and the council has to house them – frequently in hotels and B&Bs.

Glasgow is a magnet for refugees from England because of liberal housing rules.

The SNP ended the ‘priority need’ test for homelessness in 2012 and in 2022 axed the ‘local connection’ rule, that let councils turn away people without a link to the area.

The Government’s ‘New Scots’ strategy in 2018 boasted Scotland had ‘among the strongest rights in Europe for people facing homelessness’.

The end of the local connection rule ‘makes it easier for newly recognised refugees in Scotland to seek homelessness assistance’ from any Scots council, it said.

While abolishing priority need meant ‘a new refugee, if homeless, can access assistance without having to demonstrate that they are particularly vulnerable’.

An updated strategy last year admitted recent ‘challenges’, include foreign wars, had ‘significantly stretched resources and capacity to support refugee integration’.

In a submission to the Commons Home Affairs Committee in the spring, Glasgow health officials warned the Home Office-Mears Group deal was affecting local services.

Despite the Home Office’s plan saying need would be around 1,000 bed spaces, it was actually around 4,000 out of a capacity of 6,700.

‘Given the disproportionate number of asylum seekers in the city, Mears require a large property portfolio in Glasgow, in both the social housing and private rented sector. This, consequentially, limits the ability of the local authority to access this accommodation for homeless households.’

It said 1,500 private properties leased by Mears ‘could be used to accommodate homeless households’.

The Scottish Refugee Council also warned MPs that ‘differential Scottish policy’ had ‘led to unprecedented pressure on the city’s housing stock’.

Cllr Aitken last week told ITN the city was facing a ‘perfect storm’.

She blamed pressure from ‘the mass processing of people who are refugees already in the city’ which was ‘exacerbated by people traveling from other parts of the UK’.

Asked if Glasgow could still afford its slogan of ‘Refugees are welcome here’, she said the ‘incredibly difficult’ truth was the position was ‘fast becoming unsustainable’.

She told the Mail yesterday: ‘Vulnerable people who have been granted refuge in the UK or who are seeking asylum in this country are not to blame for the homelessness crisis.

‘Rather, there has been a failure of policy – starting with the last UK Government and continuing today.

‘This is an area of public discourse that is already bedevilled by misinformation, half-truths and outright lies. Witnessing an allegedly mainstream political party gleefully launch itself, headlong, into that swamp is profoundly depressing.’

SNP equalities minister Kaukab Stewart said: ‘Asylum and immigration are reserved and UK Government decisions about management of the asylum system are creating significant pressures across the UK, including in Glasgow.

‘We support the call from Glasgow City Council that UK Government must provide adequate funding to support newly recognised refugees and communities.

‘I am deeply concerned about some of the rhetoric we are seeing in the UK, which should have no place in our society. No one should have to fear they will be targeted for who they are and it is critical that everyone feels safe.’