Shabana Mahmood outlines 'firm but fair' asylum system overhaul as 100 Labour MPs rebel against Home Secretary

In a keynote speech at the Institute for Public Policy Research in London, the Home Secretary revealed Labour will end permanent refugee status.

Ms Mahmood also launched a pilot project to pay 150 families whose asylum claims had been rejected up to £40,000 each to leave the country voluntarily or face forcible removal.

She said: “The generosity of the British people will become conditional on those seeking asylum following the law, living by our rules and not working.

“Taxpayer-funded accommodation will be received in reserve for those who have no right to work and will otherwise be destitute, such as for any British citizen.

"Rights must come with responsibilities, and British taxpayers cannot be expected to fund the lives of those who refuse.”

However, Ms Mahmood also swiped at Reform UK's plan to deport around 288,000 illegal immigrants a year.

She warned: "If the left does not secure our borders, the hard right will be given the chance to try, and they will not be restrained by values like ours."

Despite issuing a dire warning to Labour MPs, left-wing rebels spoke out against the Home Secretary's migration crackdown.

Folkestone MP Tony Vaughan organised a letter signed by 100 Labour colleagues claiming the proposal undermined Sir Keir Starmer's commitment to integration and social cohesion.

He said: “We can change our immigration system for the better without forgetting who we are as a Labour party.

“You don’t win back public confidence in the asylum system by threatening to forcibly remove refugees who have lived here lawfully for 15 or 20 years. That just breeds insecurity and fractured communities.”

Walthamstow MP Stella Creasy added: “There’s no ‘fairness’ in repeatedly spending money on asking victims of trafficking and civil war if they are still in that category – especially when we have already given them refugee status so confirmed they are at risk of harm.

“Ukrainians, Iranians [and] Afghans alike will all now live in a perpetual state of limbo, not able to plan any kind of life either here or in their home nation because they can’t guarantee their status, making them easier to exploit too.

"I look forward to reading the NAO [National Audit Office] report and the inevitable Windrush-style scandal coming that none of us stood on a manifesto to implement.”

Meanwhile, Sarah Owen, who leads the centre-left Tribune Group, warned: "This, and the language it’s being delivered with, will only have negative implications on our economy, integration and social cohesion, at a time when communities are already stretched to breaking point.

"This is the wrong direction politically and morally – as a party and as a country.”

Ms Mahmood's backbench critics have sparked alarm bells about a potential revolt in the House of Commons.

Left-wing MPs had already warned that migration played a significant role in Labour's defeat in last week's Gorton & Denton by-election.

Ms Mahmood is also under pressure from Reform UK over the pilot scheme to hand £40,000 to asylum seekers.

Reform UK's home affairs spokesman Zia Yusuf said: "Shabana Mahmood has just delivered a kick in the teeth for hardworking British taxpayers.

"Almost 200,000 people have turned up on our beaches illegally over the last eight years.

"The vast majority are men. They are not fleeing conflict, they are coming from France.

"They come because Tory and now Labour Governments lay on a food bank for the world at British taxpayers' expense.

"Free accommodation, free meals, free healthcare. The only way to stop this is to detain all of them and deport them.

"Unbelievably, Labour is increasing the incentive, by offering a staggering £40,000 package to illegals to leave voluntarily.

"That’s more than the median salary in Britain. As a prize for breaking in illegally. It’s a disgrace."