Employers who hire illegal immigrants can be fined £10,000 per worker from today in cases involving negligence, compared with a previous figure of £5,000.

If the employer acts knowingly, the penalty could be an unlimited fine or jail. Jacqui Smith, the Home Secretary, described the moves, which include a points-based immigration system for people from outside the European Union, as “the biggest changes to British immigration policy in a generation”.

Highly skilled migrants who wish to extend their stay will have to have suitable employment. The points-based system, based on a system already in place in Australia, will be tested for highly skilled migrants applying from India in April, and extended to the rest of the world by the summer.

The system will then be extended to skilled workers with a job offer, students, and temporary workers. A tier for low-skilled workers is not planned while vacancies can be filled by migrants from Eastern Europe.

Jacqui Smith, the Home Secretary, said: “The introduction of our Australian-style points system will ensure that only those with skills the country needs can come to work and study.

“Today’s proposals are part of the biggest changes to British immigration policy in a generation, which include a new deal for those migrants seeking citizenship here, a new UK Border Agency to strengthen controls at the border and the introduction of ID cards for foreign nationals.”

The system puts in question the scheme under which Commonweatlh citizens with a British grandparent are allowed to settle in this country. The Labour MP Austin Mitchell said that any proposal to scrap “ancestral visas” would cause anger.

Ministers also revealed that businesses which want to sponsor and employ migrants must be licensed by the Border and Immigration Agency (BIA). A licence will be required from the autumn, when the second tier of the points-based system is due to come into effect. Employers can begin applying for licences from today.

Sponsors will be rated “A” or “B” according to criteria set by the Home Office. Their activities will be monitored, and poor performance could lead to them being downgraded or removed from the register.

The points-based system replaces 80 existing migration routes to the UK. Tier One requires highly skilled workers to achieve a total of 75 points, with various amounts awarded for education, age and their level of previous earnings. About 40,000 people applied under the previous scheme for highly-skilled migrants in 2006, with about 20,000 being successful. Separately, about 14,500 highly-skilled migrants applied to renew their stay in 2006, of whom about 14,000 were successful.

Net migration to the UK was 191,000 in 2006, the lowest level for three years and more than 50,000 down on the 2004 record.

A record number of people came to live in the UK for at least a year - 591,000, up slightly on the previous record set in 2004.

The number of people leaving Britain for 12 months or more also reached a record high of 400,000.

Just over half (207,000) of emigrants were UK citizens - the first time the annual number of British emigrants had exceeded 200,000.

Net immigration of people from New Commonwealth countries was the highest of all foreign groups - and of the 115,000 net inflow in 2006, 80 percent came from the Indian subcontinent.

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