Current handout levels leave little incentive for British families living on benefits to find a job, according to analysis by think tank Migrationwatch.

This, it says, is one of the reasons why 1.3 million immigrants have come to work in Britain n the past 10 years – while 3.5 million people are on Jobseekers Allowance or Incapacity Benefit.

Migrationwatch UK chairman Sir Andrew Green said: "We keep hearing that we need immigrants to do the jobs that the British won't do. It has been suspected for some time that benefit levels are a real disincentive to take work that is on offer and our research spells out why this may be so."

The study, published today, found a family with two children was only £30 a week better off on the minimum wage than not working.

If they are living in rented accommodation and receiving housing benefit, the worker keeps only between 4p and 10p in the pound of extra wages until his gross pay reaches £507 a week.

A single person under 25 has more incentive to work but, on the minimum wage of £193 per week, is still only £50 a week or £10 a day better off than a non- working person. If he is over 25 the difference is only £43 per week.

"There would be considerable benefits in getting our own population into work rather than encouraging immigration," the reports says.

The benefits include huge savings on the social security budget, less pressure on our infrastructure, less downward pressure on wages and a reduction in the non-working underclass it suggests.

Sir Andrew said there were several other factors. For example, British workers who have accommodation and perhaps children at school cannot be as mobile in search of work as immigrants. He added: "However, an
important factor is that wages are now so close to benefits that there is very little financial incentive for unskilled British workers to find a job.