UK (Parliament Politics Magazine) – Chancellor Rachel Reeves’ EU youth mobility plan may deliver little, with economists warning it cannot fill the £30bn fiscal shortfall.
As reported by The Telegraph, economists warn that Rachel Reeves’s proposed EU youth migration deal will deliver limited revenue for the Treasury.
Rachel Reeves confirmed on Saturday her plans for an “ambitious” scheme allowing 18-30-year-olds to study, work, and live abroad, while EU youths could come to the UK.
What did Julian Jessop say about Rachel Reeves’ EU youth scheme?
Experts raise concerns that the Chancellor’s youth migration scheme offers limited economic benefit and fails to close the £30bn public finance gap, while pressuring housing and services.
Julian Jessop, economics fellow at the Institute of Economic Affairs, stated,
“Any fiscal boost from a new UK-EU youth mobility scheme is likely to be very small. For a start, the numbers coming here would be limited, perhaps to 50,000. Even if each made a net contribution of £10,000, that would only fill £500m of a black hole which could easily be as large as £30 bn.”
He said the plan “is supposed to be reciprocal”, with any gains partly offset by young Britons leaving for the EU.
Mr Jessop warned of an “additional influx of EU migrants” which
“might also displace UK workers and add to pressures on housing and public services”.
What did Sir Mel Stride say about Rachel Reeves’ youth scheme?
The shadow chancellor, Mel Stride, said Ms Reeves had been
“reduced to begging the OBR to score a yet-to-be-clarified youth mobility scheme, to scrabble together a few hundred million at best. It shows just how desperate things have become.”
He added,
“Britain faces a massive fiscal black hole of Rachel Reeves’s own making. No amount of creative accounting can cover for the fact that her reckless borrowing has put us in this position.”
What did Rachel Reeves say about her EU youth migration deal?
Rachel Reeves confirmed an “ambitious” EU deal, saying it would boost growth and ease pressure for tax rises this November.
She said ministers want the Office for Budget Responsibility to include the EU youth migration scheme in upcoming financial forecasts.
The chancellor explained the deal would boost the economy, business, and give young Britons EU study and work opportunities like her generation had pre-Brexit.
Under the scheme, youth visas may more than double. In 2024, Britain granted over 24,000 visas to countries like Canada, Japan, and Australia.
According to insiders, the EU youth arrangement might allow 50,000 extra visas each year, say sources.
She gave no exact figure, adding,
“We have agreed as a Government that we want to have an ambitious youth-experience scheme to allow young people in Britain to be able to go and work, to travel, to volunteer, to gain experience, to learn languages in European countries.”
The chancellor said,
“And we want young people from those European countries to also be able to come to the UK and have the same opportunities that my generation had to travel and work and study in Europe.”
Ms Reeves warned of a tough Budget after the OBR cut productivity, pledging to follow fiscal rules and avoid tax rises.
What did Kemi Badenoch say about youth mobility schemes?
Tory leader Kemi Badenoch posted on X,
“We’re not against youth mobility schemes. We’re against uncapped migration schemes. Keir Starmer knows it is free movement through the back door just as he knows dynamic alignment is rule-taking.”
She added,
“This is not a reset, its a surrender. When Labour negotiates, Britain loses.”
We're not against youth mobility schemes. We're against uncapped migration schemes.
— Kemi Badenoch (@KemiBadenoch) May 16, 2025
Keir Starmer knows it is free movement through the back door just as he knows dynamic alignment is rule-taking.
This is not a reset, its a surrender.
When Labour negotiates, Britain loses. https://t.co/RaQkWM9Mil
What did Andy Burnham say about bond markets and public finances?
Andy Burnham, the Mayor of Greater Manchester, warned that Britain should not be “in hock” to bond markets. He urged a Labour government to boost council housing, nationalise utilities, tax the wealthy, and borrow £40 billion.
He said in the Financial Times interview that his remarks about bond markets were “deliberately misinterpreted.”
Mr Burnham added,
“This is about a long-term approach to regaining stronger public control of essential services, re-establishing a tighter grip on the public finances and reassuring the markets.”