A senior Midland Labour MP has urged his party to back stricter controls on immigration – and insisted a tough approach would have the backing of ethnic minority voters.

Liam Byrne (Lab Hodge Hill), the Shadow Education Minister, said colleagues should not “be afraid” of tackling the issue.

He said his experience representing a diverse area of Birmingham had taught him that people from every background had concerns about immigration, and Labour should put the topic higher up its list of priorities as it looked ahead to next year’s General Election.

In an interview with magazine The House, Mr Byrne said: “It’s an issue on which Labour can win and on which Labour needs to be self-confident, and it’s an issue which people expect political leaders to lead a conversation on.

“People want to hear more from Labour about issues like immigration. And our policy is actually in the right place on immigration, because it’s very easy to win an argument about immigration on the doorstep. I think we can quite safely put it higher up the list of things that we prioritise in some of our messaging.

“You need to talk about stronger controls, you need to talk about the obligations on people who want to make Britain their home, and third, you make a tougher argument about enforcing the rules on employers who try and use immigration to undercut British workers.”

The MP warned there was a “consensus” forming on immigration which demanded a tougher approach – but Labour was in danger of looking as if it was out of step with popular opinion.

“There’s a new consensus in Britain about immigration reform; Labour needs to be the standard-bearer for that consensus. What’s interesting is that this is not one group of voters who think this, but all voters.

“I serve one of the most diverse communities in Britain, and all of our work revealed how people from all backgrounds are basically in the same place on this. The Pakistani, Somali, Bangladeshi communities as well as the white working-class community basically all said the same thing. This is not an issue that Labour needs to be afraid of. This is not a divisive issue, this is an issue around which we can build common cause for the future.”

The MP also dropped a heavy hint that he would like Labour to impose a graduate tax to replace student fees – but he made it clear he had yet to win the argument in favour of the tax with Labour colleagues.

The National Union of Students has proposed a scheme in which graduates would pay an extra tax of between 0.3 per cent and 2.5 per cent of their income above £15,000, for a period of 20 years, with the highest earners paying the highest rates.

It would replace the existing system, in which students receive loans to pay tuition fees of up to £9,000 a year, and repay the money once they are in work.

Mr Byrne said: “We’re going to nail that down for the manifesto. But there are strong arguments for a long term shift to a graduate tax.”

Referring to his days as a student union activist, he said: “This is not widely known – but when I was leader of Manchester Union back in 1992, we become the first student union in the country to publish proposals and an argument for a graduate tax. So I’ve long been a supporter of the idea.

“Turning the idea into action is complex, especially when your debt to GDP ratio is nearly 80 per cent. So this is an idea with many virtues. But actually what people want is a plan.”

Introducing a new system could save Labour a major political headache after the party relentlessly criticised the Coalition Government for raising annual student fees from £3,000 to £9,000 – after Deputy Prime Minister Nick Clegg pledged in opposition to oppose fee increases.

The difficulty facing Labour now is that is unclear whether it could afford to cut fees, or even avoid further increases, if it wins the next election.

Mr Byrne said: “We’ve got to see the Chancellor’s figures. Osborne announced a big expansion of university places and said it would be paid for by selling the loan book. In July, Vince Cable then says he’s decided not to sell the loan book. So what on earth is going on?

“Nobody knows; it’s a mystery. That’s never going to be cleared up until the Autumn Statement.

“So we’re not going to play fantasy finances with Britain’s universities because that’s what this government gave us. And look where it’s got us.”

Asked if he could rule out any increase in fees, he said: “We’ll announce the policy when it’s good and ready.

“We’ve set out a direction of travel. We’d love to bring the cost down. But students, and their parents, as well as the university community, will ask us how we’re going to pay for it.”