Rachel Reeves has advocated for a significant youth migration agreement with the EU as a measure to improve public finances ahead of the upcoming autumn Budget. In her comments to the Times, she suggested that an exchange scheme for young workers could benefit the economy and support growth and business.
In May, the UK had committed to negotiating a “youth experience visa” with the EU, although the specific details of this scheme are still being discussed. Reeves also urged the Office of Budget Responsibility (OBR) to incorporate the potential economic benefits of this initiative into its forecasts. She aims for this inclusion to help mitigate the need for spending cuts or tax increases.
The proposal has faced criticism from the Conservative Party and Reform UK, who argue that it resembles a return to the free movement of people that was in place before the UK exited the EU. The proposed scheme may allow individuals aged 18-30 to remain in the UK for two to three years, but the particulars remain uncertain.
In her interview, Reeves did not disclose how many visas might be issued annually under the new scheme. Similar youth mobility arrangements exist with 11 countries, including Australia, New Zealand, and Japan, permitting stays of up to three years based on the applicant’s origin. For instance, the UK issued just over 24,000 youth mobility visas in 2024.
The OBR had previously projected a 4% reduction in UK growth linked to the original Brexit agreement. Reeves noted that this establishes a precedent for considering the positive impacts of a youth mobility scheme in economic forecasts. The OBR’s forthcoming forecast, due to be submitted on Friday, will inform the fiscal plans that Chancellor Reeves must address in her Budget on November 26. Current estimates suggest a gap of £20 to £30 billion annually that may need to be bridged, and potential tax increases or spending cuts are being speculated upon, despite Labour’s pledge to avoid raising income tax, National Insurance, or VAT for working individuals.
Source: https://www.bbc.com/news/articles/c179z10vy28o?at_medium=RSS&at_campaign=rss