Leading article: The worst of all worlds

It was a capitulation long expected. Yesterday the Home Secretary, John Reid, announced immigration controls to be imposed on Bulgaria and Romania when they join the European Union next year. The fear whipped up by the populist press has brought us to this. After screaming for years that we are being "swamped" by immigrants from eastern Europe, a weakened Government is bowing to their will.

It is worth restating that the reason we attract so many immigrants is that our economy is growing. It is a pity the Government shows so little understanding of this. Mr Reid talks about "managing immigration" and "meeting the needs of the UK labour market" as if the economy can be controlled by levers pulled in Whitehall. The free market, for all its failings, is the only realistic way to decide how much labour our economy needs.

Yet the truth is that economic reality has very little to do with this move. The give-away lies in the emphasis in Mr Reid's plans on keeping down the numbers of low-skilled immigrants. This is pure prejudice. The majority of immigrant workers do the jobs that native Britons turn down, such as monotonous factory work, low-level catering and fruit picking. Without such unskilled workers the economy would be in serious difficulties.

This discrimination against the unskilled also betrays a failure of imagination. The history of immigration to this country shows it is often those who come with nothing who contribute the most. Michael Marks, the founder of Marks & Spencer, arrived unskilled and penniless from Russia more than a century ago. It is dangerous and patronising to assume only qualified immigrants have something to offer.

This decision also risks damaging the UK's reputation in Europe. Quite rightly, Britain has been a driving force behind European enlargement. But now we are refusing to live up to our commitment to open markets. And the way the Government has gone about executing this U-turn is highly embarrassing: Mr Reid seems to be indicating that Poles and Latvians are somehow acceptable to us, while Bulgarians and Romanians are not.

We are ending up with the worst of all worlds. Bulgarians and Romanians will still have freedom to travel to Britain from next year. Only their ability to work will be curtailed. The most likely outcome is that those who come will end up working in the black economy, where they will be at risk of exploitation and pay no tax. This is what has happened in those EU countries that closed their doors to migrant workers in 2004. The Government is stoking hysteria on immigration, weakening our economy and needlessly insulting our newest European neighbours. It seems a high price to pay for a handful of favourable headlines.