Chancellor Rachel Reeves is pressing ahead with efforts to secure a youth migration agreement with the European Union, signalling that such a deal could play a crucial role in supporting growth and stabilising the public finances ahead of November’s Budget.
In comments to The Times before Labour’s annual conference in Liverpool, Ms Reeves described the proposal for a “youth experience visa” as an ambitious but necessary step. She argued that enabling young people to work and travel across the UK and EU would benefit the economy, stimulate business and strengthen long-term growth.
Negotiations Still Underway
Talks between London and Brussels on the framework for the scheme began in May, following a political “reset” in relations. While broad principles have been established, the detailed terms such as length of stay and annual visa quotas remain subject to negotiation. Early suggestions point to eligibility for those aged 18 to 30, with potential stays of up to two or three years.
UK already operates similar mobility arrangements with 11 other countries, including Australia, New Zealand and Japan. In 2024, more than 24,000 visas were issued under these programmes, which typically allow stays of between two and three years. Extending such access to EU nationals, Ms Reeves has argued, could deliver significant economic gains.
OBR’s Role in the Forecast
Central to the chancellor’s case is her call for the Office for Budget Responsibility (OBR) to account for the potential fiscal impact of the scheme in its forthcoming forecast. The OBR’s assessment, due later this week, will provide the Treasury with the scale of the financial challenge ahead of the 26 November Budget.
Ms Reeves has pointed to the precedent set when the OBR downgraded growth by 4% following the post-Brexit settlement, arguing that equivalent recognition should now be given to policies that can enhance productivity and revenue.
Political Reactions
The proposal has attracted criticism from both the Conservative Party and Reform UK, who contend that it would represent a step back towards freedom of movement, one of the most contentious issues of the Brexit debate.
The Liberal Democrats, meanwhile, have accused the government of moving too slowly, with Europe spokesperson James MacCleary urging swift action to secure the benefits of such an agreement for the public purse.
Budgetary Pressures
The chancellor faces a potentially severe fiscal gap, with forecasts suggesting a shortfall of between £20 billion and £30 billion a year as underlying productivity growth is revised down. Alongside the youth mobility scheme, Ms Reeves has indicated that trade expansion and other pro-growth measures will be central to her Budget strategy.
Whether the OBR incorporates the scheme’s potential economic advantages into its forecast could prove decisive. A positive scoring could ease pressure for additional revenue-raising measures, while exclusion may increase the likelihood of difficult fiscal decisions, despite Labour’s pledge not to raise income tax, National Insurance or VAT for working households.
With over 20 years of experience and a commitment to excellence, Morgan Smith Immigration is your trusted partner for all your immigration needs. Contact us today to learn more about how we can assist you with UK Visa Applications. For any enquiries or assistance, call us at 0203 959 3335 or email [email protected].
