My understanding is that Britain's opposition to joining the
Schengen Agreement was due to its desire to maintain complete sovereignty over its
borders.
Under the agreement, as you have noted, there are no border
controls for people moving between countries in the Schengen Area. Britain was worried about
this largely because of worries about unlimited immigration from other countries in the Area.
They were also worried about the idea that other countries might let in large numbers of
immigrants or asylum seekers from outside the Area. Once in, the immigrants, it was thought,
would come to Brtiain.
So the overall idea here is that the British
wanted to retain the ability to have more of a say over who could and could not enter their
country.
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