Polls show two-thirds, or 67 per cent, of the public believe that it is a good thing when migrants settled in the UK long-term decide to take citizenship. Just 8 per cent disagree.
The report says unnecessary barriers include how expensive it is to become British, a cost they say is out of the reach of frontline key workers.
A family of four has to spend up to £5,000 to all become British citizens.
For the price of just UK citizenship, the report states, someone could become a citizen of Australia, Canada, France and the United States.
The report also said ministers should allow children born in the UK to be automatically British by birth, a return to the policy in place before Britain joined the precursor to the EU.
Such a change in the law would have the backing of 61 per cent of the public, polling for the inquiry found.
It also recommends citizenship ceremonies become more high-profile and be held in locations like Wembley Stadium or Edinburgh Castle.
MP Alberto Costa, who chaired the inquiry, said: “For too long it’s been hard to tell if UK citizenship policy was trying to encourage people to become British or put them off.
“Our starting point should be that it’s great when people become citizens and we should celebrate it when they do.”
Dr Alexandra Bulat, who recently became a British citizen, said: “It is great to see that the British public is so supportive of citizenship reform, especially at a time when many EU citizens chose to become British.
“Successive governments have made this process extremely costly and bureaucratic - and the high fees and obscure requirements are hard to find and even harder to understand.
“The UK Government has a huge opportunity to build a positive vision for citizenship. A global Britain needs global Brits.”
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