Chancellor Rachel Reeves has signalled strong support for a UK-EU youth migration deal, arguing it could strengthen the economy and ease pressure on the public finances as she prepares for her first Budget in November.
Exchange visas on the table
In an interview with The Times, Reeves described the proposed scheme as “good for the economy, good for growth and good for business”. The plan, first floated in May during talks with Brussels, would allow young people aged 18–30 to live and work across the Channel for up to three years.
While the details are still under negotiation, the chancellor has urged the Office for Budget Responsibility (OBR) to reflect the potential gains in its economic forecasts — a move that could soften the scale of tax rises or spending cuts expected in her 26 November Budget.
Conservative backlash
The proposal has already drawn sharp criticism from the Conservatives and Reform UK, who claim it represents a partial return to freedom of movement, one of the key points of contention during Brexit. Reeves, however, insists the scheme is about boosting trade, skills and opportunity, rather than unpicking the UK’s departure from the EU.
Building on existing models
Britain already runs similar “youth mobility” visa programmes with 11 countries, including Australia, New Zealand and Japan. These allow applicants to stay in the UK for up to three years. Just over 24,000 such visas were issued in 2024.
The chancellor sees a deal with the EU as a natural extension of these agreements, with the added advantage of strengthening ties with Britain’s largest trading partner.
Fiscal pressures mounting
The OBR previously estimated that Brexit had cut long-term UK growth by 4%. Reeves argues the same body should now acknowledge that improved cooperation with the EU, including youth mobility, would provide a measurable economic boost.
The watchdog’s first forecast is due to be delivered to the Treasury on Friday, setting out the size of the fiscal gap Reeves must bridge in her Budget. Some estimates suggest the shortfall could be as high as £30bn a year, raising the prospect of politically difficult tax rises or spending cuts.
Looking to growth, not cuts
Reeves has repeatedly stressed that her focus is on stimulating growth rather than imposing austerity. She has pointed to further trade agreements, investment in childcare, and expanding housebuilding as measures that could improve Britain’s long-term prospects.
If the OBR agrees to factor in the potential benefits of a youth migration scheme, it could narrow the Budget shortfall — and allow the chancellor to stick to Labour’s election pledge not to raise income tax, National Insurance or VAT for working people.
