In politics, optics trump metrics. Tuesday’s leak of a Home Office draft on post-EU migration policy indicates the hardest face of Brexit. Its language is Home Office repressive. It reads like a prison governor’s report, less concerned with the inmates than with the height of the perimeter fence. What with the border computer fiasco, the detention violence scandal, and the erratic “go home” letters to foreigners, if the Home Office were a local council it would be in special measures. Whatever spin may be applied to the leak, the idea that Theresa May seeks an emollient and “frictionless” approach to Brexit is laughable.

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The document is economically illiterate. This may be because a report on Brexit’s costs by home secretary Amber Rudd’s migration advisory committee will not appear until next year. The proposed bureaucracy, the burrowing down into the records of every employer and every landlord, is gargantuan. It recalls the regulatory chaos of state incomes control in the 1970s. It would need an inspector in every building.

The labour costs the policy would impose on one of Britain’s largest industries, leisure and tourism, on the health and welfare state and on the construction industry are incalculable. The stifling of foreign access to the labour market is old-fashioned syndicalism. It mocks the leavers’ claim that blocking borders somehow raises Britain’s role in a booming global economy.

To be generous, departments are entitled to prepare private options for ministers to consider – though it would be reassuring if they embraced alternatives. The proposals do not alter safeguards for EU nationals currently working in Britain. They suggest a continuance of visa-free access for a transitional period, with possible residency afterwards. This is similar to worker regulations in other EU countries.

The proposals also reflect existing controls on non-EU citizens, though these are starkly ineffective. Non-EU migrants actually outnumber EU migrants by about 18,000 a year. In a London cafe you are as likely to be served by a Canadian, a Colombian or an Eritrean as by a Pole or a Portuguese. It is therefore unlikely that “taking back control”, in the manner proposed, would make much difference. May must know this. She glaringly failed to curb non-EU migration when at the Home Office.

The deafness of the establishment to the cries of non-metropolitan England is what got us to the present pass

Indeed Britain’s border controls are so permeable as to be more a nudge than a curb. Migrant labour flows have long reflected not public policy but economic growth and exchange rates. That is why net EU migration slowed dramatically after the 2008 collapse and again with the slump in the pound after the Brexit vote. London’s Battersea power station development, one of Britain’s largest, has already complained of losing workers, and one housebuilder was reported to have lost 4,000 EU workers, or 20% of its workforce, over Christmas. Is this really what the Brexiters want? It would probably be just an open invitation to labour agents and gangmasters to game the system.

If the metrics are mad, what about the optics? Here we go carefully. The deafness of the British establishment to the cries of non-metropolitan England over immigration is what got us to the present pass. This is best shown in the agonies of Jeremy Corbyn’s Labour party since Brexit. On Wednesday in parliament, Corbyn was reluctant to raise the immigration document at all, while his home affairs shadow, Diane Abbott, and the chair of the home affairs committee, Yvette Cooper, were equally equivocal in their responses. Suddenly, the pleas of the business community are so much blowing in the wind, while the silence of the provinces speaks volumes.

Hovering over Brexit are the two crunch issues: the divorce bill and immigration. To the “hard” leavers both are intolerable; to everyone else they seem inevitable. Yes, the referendum result was for leave, but the subsequent polling consensus is that a majority want soft Brexit rather than hard. That applies even to immigration. Take back control, but then decide what control really means.

Europe’s diplomats must surely be able to agree some sort of arbitration on the divorce bill. There must be experts who can find a sum on which compromise is possible, away from the grandstanding. I say £50bn over 10 years. Nor should it be beyond diplomatic wit to negotiate the details of work permits and residence rights for workers, to keep them if not within “one union” at least within “one economic space”. Being in control implies the freedom not to control, the freedom to welcome and to employ.

There is a crude chauvinist appeal in “British jobs for British workers”, as there is in the plea to avoid “community swamping”. But the regions voting most strongly for Brexit were those with least immigrants. Britain’s prosperous southern cities seem able to absorb large numbers of new arrivals – domestic and foreign – without soaring unemployment. Have Whitehall economists not noticed that joblessness is far higher in low-immigrant areas, such as the north-east?

The most serious damage to British community identity, other than in small pockets, comes not from immigration but from social deterioration. Brexit was a cry not of xenophobia but of neglect. If May really wanted to respond to the anti-migrant sentiment of the referendum, she would do everything to encourage economic growth away from the south-east and towards the Midlands and the north.

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She would move government departments and universities out of the capital. She would answer the concerns of the left-behinds, the emptying neighbourhoods and vulnerable communities in those parts of the British Isles not luxuriating in the benefits of cheap foreign labour. She would put her border guards on the M1, and give a £10,000 bonus to anyone migrating north. She would declare the Don Valley an enterprise zone and the Farne Islands a tax haven. As it is, her immigration measures will just mean London sucking ever more skilled labour from the provinces and widening the geographical wealth gap.

The approach to freedom of movement should not be a throwback to the “hostile environment” May aimed to create as home secretary – clearly the subtext of the Home Office document. An “emergency brake” on immigrants is already allowed under EU single market regulations. That should cover any immigration crisis that may erupt in the future. The rest is just politics, nasty politics.

• Simon Jenkins is a Guardian columnist