A Scottish work visa scheme would create an “economic migration border” between Scotland and the rest of the UK, according to Alister Jack.
The Scottish Secretary made the claim in the Commons as he rejected calls from SNP MPs to devolve the power to introduce such a system to Holyrood.
Conservative former Home Office minister Kevin Foster said some people want to use immigration policy to enforce a “hard border” between England and Scotland.
SNP MPs highlighted concerns from businesses about a lack of people to do “vital” jobs, including in hospitality and food production.
Mr Jack told Scotland questions: “The United Kingdom Government has introduced a single, flexible immigration system which works in the interest of the whole United Kingdom.
“A separate visa system would create an economic migration border between Scotland and the rest of the UK, which would be harmful for employers and far less attractive for workers.”
SNP MP Douglas Chapman (Dunfermline and West Fife) said: “Both the Fraser of Allander Institute and the Highlands MSP Kate Forbes have suggested localised worker visa solutions to boost the economy.
“Why is the Secretary of State not listening to those smart voices, and why is he not acting in the best interests of the Scottish economy?”
Mr Jack replied: “Because we have a specific Scottish occupation list for shortages, which gives us flexibility.
“The salary rate is set at £20,960 and we believe that the best way is for stakeholder bodies to make representations to the Home Office to add to the shortage occupation list.”
SNP MP Brendan O’Hara (Argyll and Bute) criticised the UK Government for insisting a “one-size-fits-all” policy is best and questioned how this would deliver equally for both densely populated urban areas and more remote communities.
Deidre Brock, SNP MP for Edinburgh North and Leith, also asked: “When will this Government accept reality and stop destroying Scotland’s economy in the name of a purist Brexit ideology?
Mr Jack replied: “I think (Ms Brock) lives in a parallel universe.
“We have the highest net migration to the UK since records began, far higher than when we were in the EU.
“As I say, if we want to attract people to Scotland, we must stop making it the highest-taxed part of the United Kingdom.”
Tory former UK immigration minister Mr Foster added: “The Secretary of State has correctly identified that there are some who want to use immigration policy to enforce a hard border between England and Scotland as part of their aim to break up the Union.”
The session also saw SNP MPs accuse the Westminster Government of being “intent on limiting” the Scottish Government’s international engagement.
Dundee West MP Chris Law asked: “Can the Secretary of State tell me why he wants to silence Scotland’s voice and prevent us from providing this global leadership?”
Mr Jack replied: “It is very straightforward. We understand there will be environmental engagement overseas from the Scottish Government and that is a devolved matter.
“But what we have tried to get a grip on is the Scottish Government travelling overseas, meeting ministers, discussing reserved areas, constitutional affairs, discussing foreign affairs and straying away from the portfolio of matters that are devolved to them.
“That is our position.”