Ethnic minorities could face more discrimination as a result of Theresa May's immigration reforms, a Tory MP has warned.
Richard Fuller said the Home Secretary's efforts to crack down on illegal immigrants could lead to increased prejudice if they are pursued too aggressively.
The measures being introduced by Mrs May in the Immigration Bill include a controversial requirement for landlords to check the immigration status of tenants, and restrictions on access to bank accounts and driving licences.
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But Mr Fuller warned that it could lead to discrimination against all minorities.
During the Bill's second reading, the Bedford MP intervened: "The problem is, it is very difficult for someone to see if someone is an illegal immigrant, what they see is someone who is different.
"Do you not accept that within this law there is the potential for discrimination to be increased if this is pursued too aggressively?"
Mrs May replied: "I think it is only fair to people who are coming here, who are making their contribution to society, who have actually played by the rules, that we do take efforts to ensure that those who are here with no right to be here who are abusing our systems are actually dealt with appropriately.
"That's why on things like access to bank accounts and driving licences and other matters I think it is important that we have taken action."
Mrs May stressed that immigration "enriches" Britain but that when it is too high it puts pressure on public services and can drive down wages.
She insisted extreme views on immigration must be rejected but shadow home secretary Andy Burnham claimed Mrs May was speaking in a "markedly different tone" to her Tory conference speech last week in which she said high immigration damages social cohesion.
Introducing the Bill, the Home Secretary told the Commons: "If we are to continue building an immigration system which is fair to British citizens and people who come here legitimately to play by the rules and contribute to our society, we must ensure it is balanced, sustainable and net migration can be managed.
"When properly managed, immigration enriches this country as we benefit from the skills, talent and entrepreneurial flair people bring to our society.
"But as I said in my speech recently when net migration is too high and the pace of change is too fast, it puts pressure on schools, hospitals, accommodation, transport, social services and it can drive down wages for people on low incomes.
"So we must achieve the right balance, rejecting both extremes of the debate - from those who oppose immigration altogether to those who want entirely open borders."
Mr Burnham intervened and asked for evidence to back up her claim that the economic benefit of high immigration is "close to zero".
The Labour frontbencher said: "It will not have escaped the House's attention that you have struck a markedly different tone in your remarks this afternoon than you did to your own conference in Manchester.
"The change in tone is very welcome but you said at the conference, in contrast to what you said a moment ago, that the overall economic benefit of migration is 'close to zero'.
"Can you today give the House some evidence to back up that claim?"
Mrs May replied: "Nice try but actually perhaps you should read the speech I gave last week and then you will see actually I am saying exactly what I said last week."
Other powers include making illegal working a criminal offence and taking harder action against employers who hire illegal immigrants.
The Bill will create a new director of labour market enforcement and will create powers to close late-night takeaways and off-licences if they are caught employing workers with no legal right to be in the country.
But it is the requirement for landlords to check tenants' immigration status that has proved most controversial.
Labour has tabled a wrecking amendment to the Bill with Mr Burnham warning it could lead to the modern equivalent of the "no dogs, no blacks, no Irish" signs.
Mrs May insisted that landlords will not have to be "immigration experts" to comply with the rules.
Addressing MPs' concerns that landlords would be reluctant to take on tenants with foreign-sounding names, the Home Secretary said: "I'll be clear about this, it's not about asking landlords to become immigration experts, those who undertake simple steps will have nothing to fear and will not face prosecution or penalties."
The Bill will also extend "deport first, appeal later" measures introduced under the coalition government to ensure migrants are deported before any appeal on their immigration status is heard, and allow the satellite tagging of foreign criminals who are released on bail.
Support will be cut for destitute asylum seekers who refuse to return home despite their claim failing, although some maintain it is too dangerous to do so.
Destitute asylum seekers are currently given somewhere to live and £35.39 a week to spend on a payment card for food, clothing and toiletries.
Mrs May said: "When people have no right to be here in the UK we expect them to leave but some people are being sent the wrong message and this Bill reflects the Government's commitment to providing support for destitute asylum seekers in line with international obligations.
"However those with no right to be here are expected to return home and the Bill will restrict the support we give to people who are here illegally."
Mr Burnham attacked the Government's bill, saying it contained "half-baked, divisive measures".
"We won't support legislation in haste that is not backed by clear evidence and that is the problem with this bill," he said.
"Parts of it appear to have been drafted on the same beer mat, in the same pub as the Home Secretary's speech to Conservative party conference in Manchester.
"It is legislation driven by a desire to be seen to be doing something and a desire to get headlines."
Mr Burnham said the "evidence is clear" that immigration provides a "net benefit to our economy", however, the effect of immigration is "not uniform across the country".
"It has a differential impact in different areas," he said.
The MP for Leigh said Labour is "prepared to support practical, proportionate, evidence-based measures that achieve the stated aims of tackling illegal immigration and illegal working".
"That is what our reasoned amendment before the house makes clear," he said.
But Mr Burnham criticised plans to make renting a property to someone with no immigration status punishable by a jail sentence.
He said "landlords are not border or immigration experts" and they are "not experts in spotting forged documents".
"On what basis are we planning to outsource immigration control to them?" he asked.
He also said the rent plans could lead to "widespread discrimination".
Mr Burnham also said Labour has "major reservations" about the new offence of illegal working because it could deter vulnerable people who are working illegally from seeking protection and reporting rogue employers.
He said it could "strengthen the arm of unscrupulous employers and reduce the likelihood of any employee coming forward to report them".
"For that reason, rather than tackle illegal working, isn't this Bill likely to have the opposite effect and potentially increase the size of the black economy?" he said.
Meanwhile Mr Burnham also said the "deport first, appeal later" measure contained in the Bill "extends the power of the executive in a number of troubling ways".
The shadow home secretary did say he wanted measures to stop pay being undercut and also backed plans to require all frontline public service staff to speak fluent English.
"That of course is a sensible proposal," he said.
Stuart McDonald, the SNP's immigration, asylum and border control spokesman, accused the Government of "immigration theatre".
He said: "The Government wants to be seen to be doing something so it goes through the motions of yet another Immigration Bill and to hell with the consequences."
Mr McDonald added the proposed legislation relies on the public to help enforce the measures, including landlords.
He warned: "We are setting off down a road of amateur immigration control as if we're to become a nation of immigration officers.
"Yet again, anyone dealing regularly with immigration work - including honourable members - should be well aware what a complex issue this is. Not one where it is appropriate for amateurs to be involved in enforcement.
"As with decisions of the Home Office, we search in vain in this Bill for proper rights of appeal and redress against amateur enforcement decisions.
"Indeed judicial scrutiny of evictions is torn apart."
Mr McDonald went on: "In summary, this is a Bill which pursues the wrong goals by the wrong methods and at tremendous cost and we should decline to give it a second reading."
Tory former foreign minister Henry Bellingham insisted David Cameron must withdraw Britain from the European Union's freedom of movement rules so it can fully regain control of its borders, describing it as a "red line" in the upcoming referendum.
He said: "The current levels of migration are totally unsustainable and that is why the UK must address the challenge of completely regaining control of its borders.
"It does mean carrying on the policy of strict controls on non-EU migration, but it must be in the national interest ... also, in my judgement it must mean Britain looking again at the EU principle of freedom of movement of people across Europe.
"I feel that very strongly and in my mind it's one of the red lines that's going to be coming up in the future referendum."
Labour's Paul Blomfield (Sheffield Central) said making illegal working an offence would undermine the Government's Modern Slavery Act by making trafficking victims more reluctant to come forward.
He said: "All the evidence shows that the more vulnerable workers are, the stronger the hand of the gangmasters over them, the less likely that they are to come forward and report their abusers.
"So what does this Bill do? It increases their vulnerability and strengthens the hand of the gangmasters.
"And it does that by threatening exploited workers with 12 months in prison if they are deemed to have committed the offence of illegal working.
"Let's be in no doubt, many will think they have committed that offence even if they haven't."
Liberal Democrat former minister Alistair Carmichael opposed the Bill, adding: "Not one of the Bill's 56 clauses looks at finding a solution or easing the pressure on Europe's borders."
Joanna Cherry, SNP MP for Edinburgh South West, expressed concerns about the proposed extension of powers to immigration officers.
She said: "Immigration officers and also detainee custody officers, prison officers and prison custody officers, they are not part of the regular police force and they are not trained to the same degree or supervised in the same way.
"The power granted to immigration officers to enter and search premises without a search warrant solely because they have reasonable grounds to believe that a person in the premises is in possession of a driving licence and isn't lawfully resident in the UK is a significant and arguably disproportionate extension of their current powers."
She also expressed concerns that deportation measures contained within the Bill could lead to families being separated.
Richard Arkless, SNP MP for Dumfries and Galloway, said he was worried about the "unintended consequences" of the Bill.
He said: "I say that the nut that this sledgehammer of a Bill is designed to smash will pale into insignificance with the can of worms that it will open."