Migrants from the European Union (EU) should be stripped of the right to take welfare cash from the UK taxpayer as soon as they arrive to help deter unskilled workers coming en masse, a major report has said.

Right-wingers including the leading Brexiteer Jacob Rees-Mogg have backed the document, written by former Tory leader Iain Duncan Smith.

It calls for controls on EU migrants in the form of a system of work permits as well as a cap on numbers in different sectors of the economy after Brexit.

Migrants would also need to pay into the British system for five years before they can claim welfare cash, it demands.

Government figures show that taxpayers in the UK paid out £4.7 billion to EU migrants in the last year for which records are available, the report claims.

Meanwhile, the report says highly skilled migrants, which are relatively few in number, should face fewer restrictions on entry to the UK.

The document highlights the rapid growth of the UK foreign-born population and argues it is unsustainable.

“People allowed into the UK for work should have no access to income-related, family or housing benefits for a set period,” the report states.

“This paper proposes five years, although an alternative could be to require a four-year record of NI contributions.”

It adds, however: “Free movement for EU tourists, students and the self-sufficient (e.g.: many pensioners) should continue in both directions as they are not competing for work, and have little impact on the permanent population.”

Writing for the Brexit Central blog, Mr Duncan Smith said: “Someone in a country with much lower welfare benefits could make much lower contributions in their home country whilst then coming to the UK and claiming much larger work and family benefits as is the case now.

“This has been one of the problems in the present system which has cost UK taxpayers considerable sums of money.

“It has also led to some companies paying very low salaries, knowing recent arrivals can claim full benefits.

“The inescapable conclusion from this section is that the Government is ready to make major concessions on EU migrants’ access to benefits in an effort to seek a deal, which would make a mockery of their statement that they were ending freedom of movement.”