Home Secretary unable to put a price on her immigration U-turn as hundreds of thousands of foreign care workers retain faster access to permanent settlement and the British benefits system.
Labour’s latest immigration climbdown has raised fresh questions about the Government’s grip on public spending after Home Secretary Shabana Mahmood admitted that watering down her own proposals would reduce the savings originally expected for British taxpayers.
In an embarrassing admission on Tuesday, the Home Secretary acknowledged that allowing potentially hundreds of thousands of foreign care workers to obtain permanent settlement after just five years would have financial consequences, despite previously warning of a multibillion-pound burden on the public purse.
The concession follows a backlash from Labour’s Left, including senior figures such as Angela Rayner, trade unions and backbench MPs, who opposed plans to make lower-paid migrant workers wait considerably longer before qualifying for indefinite leave to remain.
Under Mahmood’s original proposals, foreign care workers could have faced a 15-year wait before obtaining permanent settlement in Britain.
However, following months of internal Labour opposition, the Home Secretary announced on Monday that care workers already in the country who fulfil their visa conditions and earn at least £25,000 annually will be permitted to settle after five years.
The decision could allow up to 300,000 people to benefit from the exemption, according to reports.
Indefinite leave to remain gives migrants the right to live and work permanently in the United Kingdom and, subject to eligibility requirements, access the British welfare system.
That makes the financial implications particularly significant.
The Home Office had previously warned that allowing a large cohort of lower-paid migrant workers and their dependants to obtain settlement could impose a lifetime cost approaching £10 billion through additional benefits, public services and reduced net tax contributions.
Yet, despite abandoning a central element of her proposed restrictions, Mahmood was unable to provide an updated figure when questioned about the consequences.
Speaking to BBC Radio 4’s Today programme on Tuesday, she insisted the revised policy would still deliver savings running into billions of pounds.
However, she conceded that retaining the five-year settlement route for qualifying care workers would affect the financial calculations.
The Government will not publish its full assessment of the revised policy until the immigration rules are brought before Parliament, expected in the new year.
For taxpayers, that means Labour has announced a substantial concession without providing a definitive estimate of what it will cost.
The timing could scarcely be worse.
Britain’s welfare spending is already under enormous pressure, with the Office for Budget Responsibility forecasting a substantial increase in the coming years.
Total welfare spending was projected at approximately £353 billion for 2026–27, with longer-term forecasts pointing towards annual expenditure exceeding £400 billion.
These figures include pensions as well as working-age benefits, but they demonstrate the scale of the challenge facing a Government supposedly committed to restoring discipline to the public finances.
Against that backdrop, Labour’s willingness to retreat from proposed savings following pressure from its own MPs raises serious questions about who is actually controlling government policy.
The Home Secretary insists the revised package remains tough.
Approximately 500,000 migrants who would previously have qualified for settlement after five years are now expected to wait longer under the wider reforms.
The standard qualifying period will increase to ten years for many migrants, while those earning more than £50,271 and workers in certain public services, including doctors, nurses and teachers, will retain a five-year route.
Care workers who have failed to meet their original visa conditions will also face an extended path to settlement.
However, rather than being permanently excluded, they will be offered the opportunity to apply for another five-year care visa, giving them a second chance to qualify.
Mahmood has defended this arrangement by pointing to exploitation within the care sector, including cases involving employers who sponsored overseas workers for jobs that did not exist.
The Government says approximately 1,800 employers have lost their sponsorship licences as part of efforts to tackle abuse.
There is a legitimate distinction between workers who have fulfilled their obligations and those who have been exploited by unscrupulous employers.
But that does not answer the central financial question: how much will the Government’s decision to abandon its tougher proposals ultimately cost the taxpayer?
Shadow Home Secretary Chris Philp has described the retreat as a U-turn and warned about the potential £10 billion burden highlighted in earlier Home Office analysis.
The Government disputes suggestions that the entire projected saving has been lost, arguing that its remaining restrictions will still reduce future welfare expenditure substantially.
Nevertheless, ministers have yet to produce the figures needed to establish exactly how much of the original saving survives.
The political implications are equally troubling for Labour.
A Home Secretary who had presented tougher settlement rules as essential to protecting public finances has now been forced to defend significant exemptions following opposition from within her own party.
The episode exposes the divisions between those in Labour who recognise the need to control immigration-related expenditure and those who regard tighter restrictions as unacceptable.
It also raises questions about the authority of Prime Minister Andy Burnham, whose own position on immigration has attracted scrutiny after he declined to say whether current levels of legal migration were too high or too low.
Mahmood, by contrast, has explicitly acknowledged that immigration levels have been too high.
For a Government seeking to convince the public it has a coherent immigration strategy, such differences are hardly reassuring.
The wider settlement reforms will also introduce tougher requirements concerning criminal records, English-language proficiency, outstanding debts to the taxpayer and evidence of National Insurance contributions.
Those measures may prove significant if implemented effectively.
But their existence does not erase the fundamental contradiction at the heart of Labour’s latest announcement.
The Government originally argued that extending settlement waiting periods was necessary to prevent substantial future costs to the British taxpayer. It has now softened those restrictions while admitting that the decision will reduce the savings.
At a time when households face considerable financial pressures and public services remain stretched, ministers must explain precisely how much their compromise will cost.
Until the full figures are published, British taxpayers are being asked to accept another Labour policy reversal without knowing its financial consequences.
The question is no longer simply whether Shabana Mahmood can persuade her own party to support tougher immigration controls.
It is whether this Labour Government has the political will to deliver them.
