The government should scrap its immigration targets because the current policy inflicts “enormous economic self-harm”, according to a right-wing think tank.

A report from the free-market Institute of Economic Affairs (IEA) said it was wrong to focus on overall numbers, as the public are concerned about types of immigration rather than volumes.

The IEA also called for the abolition of the cap on work visas for highly skilled migrants and the “working limits” on foreign student visas, saying the current policy discriminates against students from less wealthy backgrounds.

Instead it proposes a “two lane” visa system in which free movement with some countries is maintained, while an uncapped version of the current system is introduced for the rest of the world after Brexit.

Author Dr Kristian Niemietz, head of political economy at the IEA, said the current immigration policy represents the “worst of all worlds” in some ways.

“It inflicts enormous economic self-harm, because it is needlessly restrictive and bureaucratic in some respects – but at the same time, it fails to genuinely address the public’s concerns and anxieties.

“The main reason for this is that in debating immigration, we are not being honest with ourselves.”

The report found that many types of immigration are “widely accepted or even popular” among “left-wingers and economic liberals” and conservatives and ‘nativists”’.

“But mentioning the word ‘immigration’ immediately triggers a culture war, where one side sees bigots and racists everywhere, while the other side feels sneered at by an arrogant metropolitan elite,” added Dr Niemietz.

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He continued: “A close look at the survey data shows that when people claim to oppose ‘immigration’, it is really only specific types of immigration that they have in mind.

“They do not really care all that much about how many people come here. They care a lot more about who comes here, and why.

“It is therefore possible to liberalise immigration rules substantially in some respects, whilst also accepting the public’s concerns and objections.”

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Home secretary Sajid Javid announced last month that his new post-Brexit migration plan would attempt to reduce net migration to “sustainable levels”, apparently marking the end of the “tens of thousands” target championed by Theresa May.

The Independent has run the Drop the Target campaign for over two years.