Reeves pushes for EU youth migration scheme ahead of Budget

LONDON — Chancellor Rachel Reeves is pressing for an ambitious EU youth migration deal ahead of the autumn Budget, arguing that a time-limited youth mobility exchange would be good for the economy, growth and business. In an interview with The Times, Reeves said such a scheme would be “good for the economy, good for growth and good for business.”

The parties have been negotiating what Reeves described as an exchange program for young workers, with the UK agreeing in May to work toward a “youth experience visa” with the European Union. The specifics of the proposal are still being negotiated, and Reeves urged the Office for Budget Responsibility (OBR) to factor the potential upside of the scheme into its forecasts ahead of the Budget, warning that doing so could reduce the need for spending cuts or tax rises.

The proposal has drawn criticism from Conservative and Reform UK colleagues, who say it amounts to a partial return to freedom of movement that ended when the UK left the bloc. Speaking to The Times ahead of Labour’s conference in Liverpool this week, Reeves said the youth visas would be time-limited: those aged 18 to 30 would be allowed to stay for two years and would not have a path to settlement. She did not specify how many visas would be issued annually.

Britain already operates similar youth-mobility schemes with 11 countries, including Australia, New Zealand and Japan, under which participants can stay up to three years depending on the country. In 2024, the UK issued just over 24,000 youth mobility visas under those programs.

The OBR has previously scored UK growth down by about 4% as a result of the original Brexit deal, a precedent Reeves says should inform forecasts if the EU youth mobility scheme is included. She noted that the May reset in London-Brussels relations has the potential to strengthen the economy and urged the OBR to reflect that in its calculations.

The OBR is due to deliver its first economic forecast to the Treasury on Friday, a document that will outline the gap Reeves will need to address in the 26 November Budget. Much depends on the OBR’s view of the underlying long‑term productivity trajectory; analysts estimate the gap could be between £20 billion and £30 billion per year depending on the productivity outlook.

To bolster growth, Reeves has highlighted a slate of measures, including pursuing additional trade deals. If the proposed EU youth mobility scheme is incorporated into the OBR’s forecast, it could theoretically limit the scale of any new tax rises. The OBR has previously credited enhancements in housing and childcare policy as factors favorable to the economy, underscoring how policy choices in those areas can influence the fiscal outlook.

Despite Labour’s vow not to raise income tax, National Insurance or VAT for working people, observers caution that ministers could still face pressure to close any remaining fiscal gap through tax or spending adjustments depending on the OBR’s forecast and the trajectory of productivity. The coming weeks will reveal how the Government balances growth-focused reforms with the need to meet budget targets in a difficult fiscal environment.