Video: Our ethical approach to immigration - Farage pledges Australian ‘points’ system

The Ukip leader said he would restore “sanity” by introducing an Australian-style points-based system to control who would be allowed to settle in the country and taking back control of the borders by leaving the European Union.

Under the plan, Mr Farage has claimed 27,000 people would have been granted entry to Britain last year and it was “very unlikely that we would need 50,000 people”.

The policy shift came after David Cameron was heavily criticised for failing to hit his goal of cutting net annual immigration below 100,000 - with the latest figures showing the actual level was 298,000.

Current levels of immigration had led to wages being squeezed, Mr Farage said, and he blamed the winter crisis in accident and emergency departments on the increase in population.

He claimed the winners from the “open door” immigration policy had been big businesses which had seen their profits grow as a result of depressed wages and the rich who had benefited from cheaper domestic staff.

In a speech in central London, Mr Farage said: “Last year, over 600,000 people settled in this country.

“We as a party hold no prejudice against anyone on the grounds of their nationality, their religion or their race.

“But we are calling for a return to sanity.

“Britain needs to take back control of her borders, control of her immigration policy and let us turn what has become a negative in our society into a positive.”

Ukip would create a migration control commission, and abolish rules discriminating between EU and non-EU nationals, with those workers who qualified under the old system issued with visas valid for five years.

During that time, they would not be entitled to claim UK benefits and would be expected to take out health insurance.

After five years they would be entitled to apply for permanent leave to remain, provided they had not broken the law.

Mr Farage said: “The fact is we cannot have a managed immigration policy and continue to be members of the European Union, where we have an open door to half a billion people.

“What we want to do is to change our relationship with the European Union, take back control of our borders and put in place a positive immigration policy, one that the people of Britain would overwhelmingly support and by that I mean we want an Australian-style points system to decide who comes to live, work and settle in this country.”

He said the UK had gone from being a country where net migration was around 30,000 a year to the most recent figures showing it had reached almost 300,000.

“There are very good reasons why the people of this country are now deeply unhappy with that situation: the impact on schools, the current accident and emergency crisis we have seen this winter in our hospitals, the changes that have happened within our communities,” he said.

“And also just think on this: in what is already the most crowded country in Europe, the fact that we have to build one new dwelling every seven minutes just to cope with current rates of immigration.

“And above all, I think what’s been felt by millions of ordinary, decent working families, is wage compression.

“An unlimited supply of unskilled labour that has made, for many people, the minimum wage in effect the maximum wage.”

He said “many big businesses had increased their profits by keeping wages artificially low” and it had been a “boon for the rich, because if you are very wealthy, open-door immigration means cheaper nannies, cheaper chauffeurs and cheaper gardeners”.

“But the vast majority of British people want change,” he said.

“They want us to control not just the quantity but also, crucially, the quality of who comes into this country.”

That meant “people that have got skills and trades that will benefit this nation” and “have not got a criminal record, people who have not got a life-threatening illness and people who, when they come, bring with them medical insurance and do not qualify for state benefits until they have been in the country for five years and contributed to the system”.

Mr Farage said Ukip’s policy would be “fairer” and “more ethical” by abolishing rules that favoured EU nationals over people from other countries.

In an interview with the BBC, Mr Farage denied that he had performed a U-turn by abandoning the cap, just days after immigration spokesman Steve Woolfe had reiterated the party’s commitment to it, insisting that the policy had merely “evolved”.

“It isn’t a U-turn ... we’ve looked at the figures very closely - 27,000 people would have qualified under the Australian-style points system to come into this country,” the party leader said.

“I can’t see us getting anywhere near 50,000.”

Asked whether voters should believe him or Mr Woolfe, Mr Farage replied: “I sat with him yesterday.

“Policies evolve, they develop, they move on.

“I don’t want the emphasis from today to be what our cap is.

“What I want it to be from today is the fact that Ukip is putting forward a policy that will take immigration into Britain back to normal.”

Mr Farage insisted “normal” levels meant what was seen “from 1950 until the year 2000”.

And he said a mooted £27,000 lower limit on earnings to gain access to the UK was “not absolute” and there could be exemptions for some skills, such as nurses.

Chancellor George Osborne told BBC Radio 4’s Today programme: “Nigel Farage seems to be making it up as he goes along ... one moment he is talking about a cap and then he ditches it live on air, which is a novel approach to policy-making.”

Answering questions after his speech, Mr Farage admitted he was “concerned” that Ukip was being perceived as prejudiced.

“I don’t want this party to be perceived as anything other than an open, inclusive political party, which without doubt it is,” he said.

Asked whether immigration could reach the point where he was uncomfortable living in Britain, Mr Farage said: “I want to live in a country that is at ease with itself, where we speak the same language ... where our kids can play football with each other, and we all get on.”

The leader said he thought London was “very close” to having a non-white majority.

“But I am hoping as the years go by that ever more of them will not just be voting, but standing for Ukip as candidates,” he added.

He insisted there had been “no softening” of Ukip’s approach on immigration, and it was “firm but fair”.

Mr Woolfe also denied he had ever proposed a cap on net immigration.

“That was not necessarily a cap that we were looking at,” he said.

“We always said ‘up to’.”