Shabana Mahmood should be moved out of the Home Office and her asylum policies of “performative cruelty” ripped up by Andy Burnham’s administration, Alf Dubs has said.

The veteran Labour peer, who came to the UK aged six in 1939 fleeing the persecution of Jews in Nazi-occupied Czechoslovakia, said the home secretary’s talents “would be better used elsewhere in the cabinet”.

Instead, an expected Burnham-led government could champion “human rights, compassion, fairness and equality” while advocating control of UK borders, Dubs said.

Mahmood has been attempting to soften some of her hardline plans. She has been involved in talks to exempt care workers from the proposed changes to “indefinite leave to remain”. She is now embroiled in a standoff with Keir Starmer over the future of the immigration minister Mike Tapp, who is accused of passing off the plans as his own.

Burnham is widely expected to become the prime minister as soon as 17 July after Starmer resigned from office this week.

Asked if Mahmood should remain in post, Dubs told the Guardian: “I think her talents would be better used elsewhere in cabinet to allow the new PM free rein to put his own stamp on asylum and immigration policy.

“At a time when the party needs unity, I do not believe that Shabana Mahmood’s policies represent the right approach.”

Dubs, who has been described as “the conscience of the Labour movement”, said: “This is Andy Burnham’s opportunity to correct some of the mistakes that the Starmer government made as regards asylum seekers and refugees.

“The proposed changes to indefinite leave to remain, for instance, which would apply retrospectively to people who came here in good faith and according to the rules, are simply unjust and should be reconsidered.

“We must stand firmly by our commitments under the 1951 refugee convention and the ECHR and not attempt to water them down which is what the current proposals threaten to do.”

A former Northern Ireland minister who helped draw up the Good Friday agreement, Dubs criticised Mahmood’s decision to suspend family reunion visas. She is expected to unveil an asylum and immigration bill on Tuesday that will make it easier to place children in handcuffs prior to deportation, or to remove sick children.

Dubs, 93, was transported to the UK through the Kindertransport train, which he subsequently discovered had been organised by the London-based stockbroker Sir Nicholas Winton.

He said the proposed changes would leave children in his position “out in the cold” and unable to seek sanctuary in the UK.

“As these proposals stand children like me arriving in the UK seeking sanctuary would be left out in the cold. Worse, they could be handcuffed and deported, even if they have family here ready and willing to care for them. Those are not British values and they are certainly not Labour values.

“We should be giving a high priority to family reunion to allow asylum-seeking children to join their families here. I believe the public would accept this and see it as a fair and compassionate approach,” he said.

Burnham’s campaign in Makerfield was “positive, community-focused and unifying”, Dubs said. “To squander that optimism now would be a political mistake.”

He urged Burnham to support children and reassure the party’s “core vote”.

“This is Labour’s reset moment when we can consign to the past some of the appalling language used by politicians to describe refugees: ‘invaders’, ‘an island of strangers’, ‘tearing our country apart’. We can’t reset by bringing with us policies that many in the PLP do not support, spearheaded by a home secretary who divides opinion,” he said.

Labour should seek to control the UK’s borders, but do so “without cruelty”, Dubs said.

“This control should also come with our commitment to basic rights, and compassion for those who are in time of greatest need. Not performative cruelty – like briefing the Home Office would start seizing refugees’ jewellery at the border. Or using incendiary language to blame refugees for ‘tearing our country apart’.

“We must redouble our efforts to establish Europe-wide cooperation on asylum seekers and refugees. It is only by working with our partners that we can achieve an effective human-rights based policy.”

Sources close to Mahmood said her policies were necessary to restore order and control at the UK’s borders, which was consistent with Labour values. She has previously claimed that the UK risks losing popular consent for its asylum system without tough policies.