Good afternoon. There was an interesting and encouraging little flutter in Brexitland this week when the Sunday Times published a front-page story about the UK government seeking youth mobility deals with EU member states.
Encouraging because it shows that Rishi Sunak’s government is moving away from the blinkered approaches under Boris Johnson and David Frost that led to a Trade and Cooperation Agreement that contained such weak mobility provisions.
Interesting because even the UK acknowledges these deals look unlikely to happen in the immediate future, despite the headline on the story “how European baristas and au pairs could return to Britain under government scheme” putting a rather romantic gloss on a Treasury-driven push to get more labour into the UK.
(The mention of “au pairs” seemed particularly pointed since the Johnson government looked to be perfectly content to destroy that business, as I reported here, with the then immigration minister Kevin Foster making no apology for how the childcare system was hit by post-Brexit rules.)
But times are changing under the Sunak-Hunt administration, driven by industry lobbying over tight labour markets and a desperate need for economic growth without adding inflationary pressures.
We’ve seen in recent weeks construction jobs being added to the Shortage Occupations List and also a widening of some existing Youth Mobility Schemes, for example with New Zealand where the age limit has been increased from 30 to 35 and the stay limit increased from two years to three.
I’m told to expect more of this. There are other countries, such as Japan and South Korea, that have caps and a lottery scheme to get youth mobility visas to the UK that are heavily oversubscribed. These too could be expanded and relaxed.
There is also hope, according to Huan Japes of English UK, the lobby group for the language school industry, that the UK will this autumn follow through on a pledge to make it easier for French school trips to come to the UK — with the hope that such a deal can act as a pilot for other EU countries.
I’ve written on the “Kafkaesque” nightmare of school trips here. It will be critical, however, that any “fix” applies to non-EU kids as well as EU citizens. We’ll see if the Home Office can manage this.
But what about signing broader youth mobility schemes with EU countries? It’s something that Labour has promised and many UK industries have lobbied for — and even David Frost, without apparent irony, has recognised they could be improved in the TCA.
But it isn’t as simple as just inking deals with receptive EU member states. As UK officials acknowledge, although such youth mobility schemes are in the gift of individual member states (Germany has one with Canada, Spain has deals with South American countries) it is a little bit different with the UK.
Not legally. Asking around, I understand the EU Commission accepts this is, of course, an EU member state competence and internally is being careful not to overplay its hand, but politically the UK does come with unique Brexit baggage.
During the 2020 negotiations the EU had initially sought quite broad mobility provisions but, in the EU’s memory at least, these were shut down by Johnson, who pulled out of the Erasmus student exchange scheme and then made insultingly unrealistic offers on mobility.
This is why the European Commission is cautioning EU member states against signing mobility deals with London which look, to them, like a UK dash to access cheap foreign labour with few strings attached, rather than a deeper attempt to reset neighbourhood relations and re-engage with “people to people” contacts.
As one EU official put it:
What it looks like is EU youth being brought in to get paid minimum wage rates, without the in-work benefits. It’s not clear that young Europeans will be treated like young Brits.
Given the demand from elsewhere in the world noted above, you could argue that EU countries will be cutting off their noses to spite their faces by refusing to do deals with London, but — for now at least — it does seem that EU member states will hold the line, despite their individual keenness.
And that “keenness” is important to note, because it speaks to an appetite to re-engage with the UK in countries such as Spain, and points clearly to something the UK has to “offer” if it wants to reset relations with Brussels.
For all the bitterness over Brexit, there is plenty of anglophilia among European elites who want easier access to the UK for their children, students and their business people — but only on the right terms.
A Labour government would not come with the same political baggage as the current Conservative administration, but will still need to think very carefully about what the UK “offer” should be — on youth mobility, but also in other areas like rejoining Erasmus and accepting postdoctoral students.
It might be infuriating, but the asymmetry in the negotiating dynamics between the two sides means the UK will need to bait the hook.
This won’t be easy, not least because it may require the UK to take a more “reciprocal” and less “bean-countery” approach than the current government. But politically, that opens a Labour government to accusations of being supine and doing bad deals with Brussels.
This is why the Horizon Association agreement is blocked — because the Treasury isn’t prepared to pay-to-play (or at least overpay-to-play), which is very likely to be the outcome of reassociating on current terms.
The vast majority of industry, science and academia reckon it is worth it, but Sunak apparently isn’t so sure. If Keir Starmer was prime minister, would he do a deal in which the UK knows it will get less cash out than it puts in? Or would the EU give him a better deal? All to be seen.
Johnson ditched Erasmus — a reciprocal exchange programme for school children and students — because the UK took many more EU youngsters than it sent back to the Continent.
That was replaced with the Turing Scheme, which only funds outbound UK students and — according to the guidance — merely “encourages” colleges that use the scheme to try to make them reciprocal. But the UK funding only goes one way, which the EU sees as symptomatic of UK small-mindedness under the Brexiters.
There is clearly a deal to be done on improved mobility — perhaps bilateral deals but done under some kind of EU-wide umbrella — but we shouldn’t expect that a fiscally hard-pressed Labour government will necessarily find domestic politics of such deals easy.
The risk is that if Labour cannot think a little bigger than the current government it’ll get bogged down in the same rather bitter, iterative negotiations that we’re seeing frustrating the current government, despite the diplomatic reset following the post-Windsor framework.
Brexit by numbers
One of the things that is not intuitively understood about Brexit is the persistent and ongoing nature of the challenges it presents to businesses that export to Europe — or rely on imports from Europe and access to EU supply chains, directly or indirectly via their suppliers.
Today’s chart from an annual survey by the Institute for Directors (IoD) illustrates the point rather nicely, showing that between June 2022 and June 2023 the number of members surveyed who found trading with the EU challenging has remained unchanged at 47 per cent.
Strip out those businesses that don’t trade with the EU (a cohort that has grown this last year) and the figure rises to 59 per cent. So nearly two-thirds of businesses that trade with the EU find it “challenging”.
Interestingly, the survey does show some businesses getting better at more fixed processes, like customs and labelling, but struggling with “non-tariff barriers” on both services and goods, including visa processes.
When asked, business leaders citied “the lack of a level playing field, regulatory divergence, exclusion from EU research funds and political instability” among their top bugbears.
Emma Rowland, the IoD’s trade policy adviser, said the responses reflected the fact that trade between the EU and UK is no longer completely seamless. “The review of the TCA, which is due to take place in 2026, should provide an opportunity to address some of these pain points, depending on how much the EU is willing to negotiate,” she added.
Rowland is right to add that cautionary “depending” kicker to her quote on the possibility of the TCA implementation review. But she might have equally said, “depending on how much the UK is willing to do to get the EU to negotiate”.
Britain after Brexit is edited by Georgina Quach today. Premium subscribers can sign up here to have it delivered straight to their inbox every Thursday afternoon. Or you can take out a Premium subscription here. Read earlier editions of the newsletter here.