High levels of immigration over the past 10 years have been beneficial for the British economy by lowering both inflation and interest rates, according to a new report by a city-based think tank.
The report published by The Work Foundation said on Thursday skills and labour shortages have been avoided and the economy has been kept on a stable growth path by immigration.
The British government should embrace the case for free movement across the European Union and enable citizens of Bulgaria and Romania to work in the UK even if the move allow for a more uncertain economic outlook, it suggested.
The Foundation's report contradicted a recent analysis of the House of Lords Economic Affairs Committee, which said competition from immigrants had a damaging impact on the low-paid employees and on training for British workers.
The report also debunked myths about the impact of migration on employment and wages. It said wages had not fallen because migrants are willing to work for less, including in key sectors such as construction work and hotels.
"The government has had a hard time over immigration not because it has 'lost control' of the issue, but because it has failed to tell a compelling story based on consistent high-quality information, " said David Coats, the foundation's associate director of policy and author of the report.
"On the available evidence, the best judgment is that the economic case for free movement in the EU is strong and the UK's ageing population, with fewer young people entering the job market, means that a fair and flexible policy of managed migration is essential if the economy is to continue to grow," he added.
Fewer people came from central and eastern Europe to work in the UK in 2007 than in either 2006 or 2005, the report pointed out.
"The high water mark may have been passed and employers cannot rely on a continued supply of Polish workers to fill labour shortages in the UK. As the economies of central and eastern Europe grow and unemployment falls, the pressure to migrate will lessen," it added.