Shabana Mahmood is still facing a Labour revolt today despite watering down tough immigration plans.
Almost 300,000 foreign care workers will be exempted from a crackdown which would have seen them waiting years longer to win permanent status in Britain.
A series of massive concessions unveiled last night mean that out of 1.9million foreign nationals due to become eligible for settlement by 2030, only 500,000 will end up waiting longer.
Critics said the climbdown could cost taxpayers £10billion in lifetime costs for welfare handouts and other public spending such as the NHS.
The initial proposals had run into fierce resistance from unions, as well as in Cabinet - where both Angela Rayner and Miatta Fahnbulleh voiced concerns.
Ms Mahmood repeatedly dodged on whether Andy Burnham had forced her into the retreat in interviews overnight.
But the Home Secretary might not be out of the woods, as Labour backbenchers are calling for more changes.
Shabana Mahmood is still facing a Labour revolt today despite watering down plans tough immigration plans
Former shadow chancellor John McDonnell highlighted a 30-year limit on Channel migrants getting settled status, cautioning that would create a 'generation of unsettled and insecure young people'.
Under the new measures, about three-quarters of foreign care workers who arrived here in the post-pandemic immigration wave – more than 282,000 people – will remain on a five-year qualification period for settlement, or 'indefinite leave to remain' (ILR), down from a proposed 15 years when the measures were unveiled 12 months ago.
Having ILR enables people to live, work and claim benefits for the rest of their life. Those who do not qualify for such status after living here for five years will instead be given a new five-year visa and a 'second chance' to meet the criteria for permanent residence.
The new package also lowers ILR waiting times for other types of workers, as well as some who arrived in Britain as asylum seekers. Ms Mahmood said: 'Settled status is one of the most valuable rights this country can offer.
'Until now it has been given almost automatically. From today it must be earned.
'Those who contribute most will settle fastest. Those who don't play by the rules will be refused or wait much longer.'
But Shadow Home Secretary Chris Philp accused her of 'a substantial climbdown on their previous ILR policy under pressure from the open-borders Left'.
He said: 'Over 250,000 low-wage care workers and dependants – even ones who came fraudulently – will now get to stay for at least ten years, and 75 per cent of them can now stay for ever.
'The Government's own figures show the cost of this to taxpayers is £10billion.
'This is completely unfair to hard-pressed taxpayers.'
He added: 'The Government also said that illegal immigrants will have a path to citizenship and full benefits.
'My view is that illegal immigrants should never get citizenship.'
Writing in today's Daily Mail, Tory leader Kemi Badenoch said Ms Mahmood had been 'humiliated'. She wrote: 'She wanted to make people wait longer before they could settle permanently in Britain and access benefits. A perfectly reasonable principle and one which we would have supported.
'But Angela Rayner and the Left flank of Labour backbenchers didn't like it, so they are preparing to exempt care workers already here.'
Reform UK leader Nigel Farage branded it 'the beginning of the capitulation', adding: 'That it is a very major U-turn in the position of the Home Secretary is clear. That it will cost this country a vast amount of money is clear.'
The existing five-year ILR route will remain available for other foreign nationals employed in public sector jobs that require lower qualifications, such as teaching assistants, podiatrists and nursing auxiliaries.
Other workers in lower-qualified jobs will no longer have to wait 15 years for ILR – as previously set out by Ms Mahmood – and could instead qualify in ten years.
It comes just months after Ms Mahmood warned that a failure to implement her original blueprint, published last November, would lead to a '£10billion drain on public finances'.
She had insisted that diluting the proposals would be 'an affront to the idea of fairness within our society', while putting 'further strain on public services like housing and healthcare'.
Last night officials said the £10billion referred to by Ms Mahmood was out of date, and 'a few billion' in welfare payments would be saved by yesterday's changes.
The leader of Britain's biggest trade union, Unison, crowed that it had 'led the charge' in forcing Ms Mahmood to cave in.
Mr McDonnell said the climbdown had prevented the 'collapse of social care in this country'.
But he added: 'Shabana Mahmood has just confirmed that if someone comes here via an ''illegal method such as by a small boat'' they will have to wait 30 years before they can apply for permanent settlement.
'Her argument is that these refugees must come by new, safe, legal routes. The problem is that these routes barely exist and as a result many desperate people are forced to resort to other routes.
'The new rules... mean that many people, including many children, will have to live with the insecurity of not having settled status for 30 years.
'We are in danger of witnessing the creation of a generation of unsettled and insecure young people.'
In the Commons, Labour MP Diane Abbott complained that those earning less than £50,000 would be placed on a 10-year settlement path, an increase to the current five years policy.
She said: 'You can come in legally, you can work legally and then have your residency rights turned upside down. How can that be fair?'
Ms Mahmood is 'in danger of finding herself in the same position as the home secretary who was in office at the time of the Windrush scandal', the Hackney North and Stoke Newington MP argued.
The Windrush scandal – which campaigners have since said should be known as the Home Office scandal – erupted in 2018 when British citizens were wrongly detained, deported or threatened with deportation despite having the right to live in Britain.
Labour MP Stella Creasy asked whether the increased wait time for those earning less than £50,000 would have a positive or negative impact on our economy.
The Walthamstow MP said: 'There are still around 200,000 people who do not earn more than £50,000 but are in work, who do not have a British spouse or connection and are not working in the care sector or public sector – for example, scientists, researchers, skilled technologists – who will now face a 10-year wait to get settlement in this country.'
Rachael Maskell, the Labour MP for York Central, warned that migrants are in the UK at a time when 'skills and contribution do not correlate with wages'.
Writing in today's Daily Mail, Tory leader Kemi Badenoch said Ms Mahmood had been 'humiliated' (file image)
Former shadow chancellor John McDonnell highlighted a 30-year limit on Channel migrants getting settled status, cautioning that would create a 'generation of unsettled and insecure young people'
She said: 'I am concerned about retrospective changes because our word should be our bond to people coming here.'
Backbencher Richard Burgon welcomed the change on care workers, but added: 'I'll keep pushing for the other changes needed, including on refugees.'
Labour MP Clive Lewis said the care sector decision had been 'soured by leaving many low paid workers facing a a harsh, retrospective tripling of their qualifying period'.
'This is wrong and we will continue to highlight their plight. As a party of workers we must stand for ALL of them,' he posted on X.
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