Immigration should be capped, according to a parliamentary report published today which concludes that record numbers of new immigrants have had “little or no impact” on economic well being.

Some groups, including the low-paid, young people seeking jobs and some ethnic minorities, may have suffered because of competition for work from immigrants willing to accept low wages and poor working conditions.

Today’s report, from the Lords Economic Affairs Committee, whose members include two former Conservative Chancellors of the Exchequer, seeks to undermine the Government’s claim that record levels of immigration have boosted the economy.

It also sets out to demolish a range of arguments in favour of immigration, including the one that foreigners are needed to prevent labour shortages and also to help to support an increasingly ageing population.

The report endorses the Conservative policy of capping immigration by urging ministers to set an “explicit target range” for numbers entering the country. Controversially, it also raises the prospect of cutting the number of partners and other family members allowed to settle in Britain because a relative is already here.

And it suggests that, if the predicted 190,000-a-year net migration rate continues, house prices would be 10 per cent higher in 2028 than they would have been if there was zero net immigration.

Lord Wakeham, the former Conservative Cabinet minister who chaired the Lords inquiry, said: “The argument put forward by the Government that large-scale net immigration brings significant economic benefits for the UK is unconvincing. We have found no evidence to support their position.”

The Government has said that immigrants are boosting the overall economy by £6 billion a year, but the committee said that this was a misleading measure and a better one would be the impact on income per head of the resident population. “On this measure, immigration has had a largely neutral effect on economic wellbeing, with the income of some groups of low-paid workers actually falling,” it said.

It added that the available evidence suggested immigration had had a small negative impact on the lowest-paid workers and a small positive impact on the earnings of hgher-paid workers. “Resident workers whose wages have been adversely affected by immigrations are likely to include a significant proportion of previous immigrants and workers from ethnic minority groups,” the report added.

Lord Layard, an economist and Labour member of the committee, gave warning that Britain would face significant pressure from immigration for years. “We will have a permanent pressure of people to move in our direction. Britain has an extra resource, the English language, for attracting people here. There is no doubt whatever that the pressure will remain for half a century or more,” he said.

The findings of the 82-page report were seized on by the Conservatives and Migrationwatch, the organisation that campaigns against mass immigration. David Davis, the Shadow Home Secretary, said: “This cross-party committee of distinguished peers has demolished the Government’s case on several fronts. They show unequivocally that the benefits of the current immigration policy to ordinary UK citizens are largely non-existent.”

Sir Andrew Green, chairman of Migrationwatch, said that the report was a watershed. “A heavyweight committee of Parliament has torn to shreds the Government’s economic case for the massive levels of immigration which they have actively encouraged.

“Having lost their smokescreen of dodgy economic arguments, they now have no alternative but to implement a sharp reduction in numbers. The public will accept nothing less.”

But Neil Carberry, head of employment at the CBI, said: “In the global economy, businesses need a flexible immigration system that allows them to source the skills they need when appropriate UK-born staff cannot be found.”

He said that businesses were daily filling jobs which, without migration, would have been left empty.

Liam Byrne, the Immigration Minister, welcomed the report and insisted it proved that the Government was right to ask the independent Migration Advisory Committee to tell ministers which workers the new Australian-style points system should keep out or let in. He added: “What’s more, our plan for earned citizenship will mean that only those who can speak English, pay taxes and obey Parliament’s law will be able to earn the right to stay.”

The Lords committee comprised five Labour and five Conservative peers, including Lord Lamont of Lerwick and Lord Lawson of Blaby, both former Tory Chancellors, two Liberal Democrats and four crossbenchers.

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