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Rachel Reeves is advocating for an expansive youth migration deal with the EU in an effort to bolster the state of the public finances before the autumn Budget. The proposal, which included an exchange program for young workers, aims to benefit the economy, encourage growth, and support businesses, as reported by the Chancellor to The Times. The UK has commenced discussions with the EU regarding a “youth experience visa,” as agreed upon in May, although the specifics of the plan are still being ironed out.
Reeves is calling for the Office of Budget Responsibility (OBR) to consider the potential economic ramifications of such a scheme in its forecasts leading up to the Budget, with the hope of reducing the necessity for expenditure cuts or tax hikes. Despite receiving criticism from the Conservatives and Reform UK, who view it as a partial resurrection of freedom of movement post-Brexit, Reeves clarified to The Times that the youth visas would be limited in duration, with individuals aged 18 to 30 permitted to stay for two years without any entitlement to permanent residency.
The Chancellor refrained from disclosing the exact number of visas that could be granted annually through the program. Currently, the UK maintains comparable agreements with 11 other countries, such as Australia, New Zealand, and Japan, where individuals are allowed to reside for a maximum of three years based on their country of application. In 2024, the UK issued slightly above 24,000 youth mobility visas under these existing arrangements.
The OBR had previously downgraded UK growth by 4% following the original Brexit deal. Reeves is advocating for the incorporation of the anticipated economic benefits of a youth mobility scheme into the OBR’s upcoming forecasts. As the OBR prepares to submit its initial economic projections to the treasury this Friday, the Chancellor anticipates addressing the fiscal deficit in the upcoming November Budget, with estimates suggesting a gap of around £20 to £30 billion per year due to lower long-term economic performance
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