Businesses will be penalised for employing foreign staff under a Reform government, in order to put British workers first.

Bosses would have to pay a new Migrant Worker Levy costing up to £3,750 for each overseas employee on the minimum wage if Nigel Farage’s party wins the election.

They would also have to keep paying the higher rate of National Insurance Contributions introduced by Rachel Reeves for their migrant workforce – but would pay lower rates for their British employees.

Reform’s pick for Chancellor Robert Jenrick claimed the billions raised by the new levy would pay for the tax cut.

He said: ‘For more than 20 years now, we’ve had British workers coming second - undercut by cheap migrant labour, which drives down wages and our people’s quality of life.

‘The experiment of letting in millions of low-wage migrants — as millions of Brits languish on benefits — has failed catastrophically. Reform will end it.’

Mr Jenrick went on: ‘It is high time the British Government put British workers first. And migrant labour second.

‘Right now, if you’re running a care home, it makes no difference to you whether you hire a British citizen or a foreign worker. But it makes a huge difference to our country.’

Setting out the policy at Reform’s HQ in Westminster on Monday morning, Mr Jenrick said that 7million working-age British people are now on out-of-work benefits yet 5m migrants have been allowed in to work in recent years.

He said it has led to towns and cities being blighted by mass worklessness with children growing up in households where neither parent works, while the benefits bill has exploded.

Mr Jenrick said he would not set out exact details of the new Migrant Worker Levy today, up to three years before the election.

But he said by way of illustration that it could be set at £3,750 for each foreign employee earning the National Living Wage, in order to deter employers from hiring cheap overseas labour.

It would taper down to £1,500 for someone on £50,000 and just £500 for a high-skilled worker paid £100,000.

Mr Jenrick said it would raise £10billion from non-EU migrants on PAYE contracts alone, paying for his planned reduction in employer National Insurance Contributions for British staff.

And he said the Treasury will still benefit when migrants who lose their jobs start to leave the country, as Britons start to come off benefits and start paying income tax.

But the Tories claimed that reversing Labour’s increase in employer NICs – from 13.8 per cent to 15 per cent – would cost as much as £26bn.

Shadow Chancellor Sir Mel Stride said: ‘In their desperation to try to win Makerfield, Reform are running the most reckless and expensive by-election campaign in history - throwing out a litany of policies in the hope something sticks.’

A Labour spokesman said: ‘Nigel Farage’s latest half-baked plan would leave British businesses and British people worse off.

‘Their proposals threaten to hike bills and leave working families paying the price.’