Reeves pushes for EU youth migration scheme ahead of Budget

In an attempt to improve the public budget's forecast ahead of the fall Budget, Rachel Reeves has called for a ambitious youth migration agreement with the EU. The chancellor said the Timesan exchange scheme for young employees would be

good for the economy, profitable for growth, and beneficial for company. In May this year, the UK agreed to work on a

new experience visa" with the EU, but the scheme's specifics are still being worked out. Reeves have also asked for the Office of Budget Responsibility (OBR) to factor the potential economic consequences of such a program into its estimates ahead of the Budget, in the hopes of minimizing the need for spending reductions or tax increases.

The plan has been previously criticized by the Conservatives and Reform UK, who have said that it amounts to a partial return to freedom of movement, which began shortly after the UK left the EU. Such a scheme could mean that those aged 18-30 can live for two or three years, but the specifics are to be decided. In a talk with the Times this week, the chancellor refused to specify how many visas would be issued annually under the scheme. The United Kingdom already has similar programmes in 11 countries, including Australia, New Zealand, and Japan, with people able to stay for up to three years based on where they come from. In 2024, the United Kingdom issued just over 24,000 youth mobility visas under those conditions.

Prioritizing the original Brexit deal has seen UK growth slowing by 4%. The chancellor believes that has set a precedent and that the OBR should incorporate the anticipated economic benefits of a youth mobility initiative into its forthcoming forecast. Reeves said in the Times that referencing the deal between London and Brussels earlier this year:

We expect the economy to be stronger as a result of the reset in May. We also want the OBR to rank well.

The OBR will release its first economic forecast to the Treasury on Friday, which would include the gap that the chancellor will have to fill in her 26 November Budget. Much is dependent on the OBR's predicted downgrade to the economy's long-term results or productivity. The difference could be £20 or £30 billion per year. In response, the chancellor has outlined a sequence of steps aimed at boosting the economy, including further trade agreements. If accepted by the independent forecasters, the inclusion of the EU youth mobility scheme in the estimates would theoretically limit the number of new tax hikes. In recent years, the OBR has ranked policy changes on house construction and childcare as the most important to the economy. Despite Labour's pledge not to increase income tax, National Insurance, or VAT for working people, rumors have been rife that the chancellor will be forced to raise taxes or cut spending in order to fill the fiscal hole.