Today’s announcement has long been viewed in government as a potential political banana skin.
When the home secretary announced her first version of changes to the settlement system last year, many Labour MPs, including the housing secretary Angela Rayner, voiced their concerns about the plans.
But there was a feeling that Sir Keir Starmer’s government was determined to plough on regardless. Shabana Mahmood herself repeatedly expressed how important she believed the reforms were.
But the change of prime minister over the summer gave renewed hope to those unhappy Labour MPs that they could force the Home Office into two changes.
Firstly, social care workers – under the original plans many social care workers would have had to wait 15 years before becoming eligible for settlement.
Secondly, the retrospective nature of the plans – some MPs were uncomfortable at the idea of someone coming to the UK and expecting to be eligible for settlement after five years, but then having to wait longer.
Angela Rayner described that as “un-British” and said the government shouldn’t be shifting “the goalposts”.
She returned to the cabinet under Andy Burnham as housing secretary and chose to repeat those criticisms in an interview during the Labour Party conference in September.
That was seen as evidence that a debate inside the top levels of government about whether to water down the plans was well and truly rumbling on.
For all the Labour MPs who wanted a change, there were others, particularly those in Brexit-supporting areas, who wanted the home secretary to stick the course.
Some inside government felt nervous about providing what they saw as catnip to Reform and the Conservatives.
All of that added up to one of the more difficult decisions that has had to be taken since Burnham walked through the doors of Number 10.
In the end ministers chose to water down the proposals for care workers – those who arrived before May 2025 and earn at least £25,000 a year will qualify for settlement in five years.
But the retrospective nature of the plans, the thing Rayner described as shifting “the goalposts”, hasn’t changed.
Despite that, the majority of Labour MPs pulled their punches when Mahmood made a statement in the House of Commons earlier.
Perhaps the strongest pushback came from Rachael Maskell, who is no fan of the retrospective element – but others on the left of the party, including John McDonnel and Diane Abbott, were critical without being scathing.
