British business leaders are calling on the government to open the doors for young EU workers, warning that restrictions are holding back economic growth.

The Institute of Directors (IoD) has urged ministers to negotiate a Youth Mobility Scheme with the EU, allowing 18 to 30-year-olds to live and work in the UK for up to two years.

The scheme, which would also let young Brits work in the EU under the same terms, could help ease skills shortages and strengthen business ties between the UK and its largest trading partner.

However, any such plan would be highly controversial and is likely to face opposition from both the Conservatives and Nigel Farage’s Reform who argue any move in this direction would be a betrayal of the Brexit vote.

According to an IoD survey conducted in May 2024, 50% of business leaders believe such a scheme would benefit their organisation, with just 2% seeing any drawbacks.

There is particularly strong support for youth mobility in research, internships, and student exchange programmes, with nearly 90% of respondents backing these initiatives.

Emma Rowland, Trade Policy Advisor at the IoD, stressed the urgency of repairing relations with the EU, saying: “The UK’s trading relationship with the EU remains one of the biggest barriers to business growth.

“The EU has put youth mobility on the table, and while the UK government has so far resisted, our members strongly support a fair and reciprocal scheme.”

Business leaders argue that sectors like hospitality and retail, which typically rely on young workers, have been hit hard since the end of free movement. An agreement could ease recruitment struggles and improve the UK’s competitiveness.

There is also growing appetite for closer collaboration with Europe in education and research, including participation in the Erasmus exchange programme. Greater cross-border cooperation, they argue, would boost innovation, productivity, and cultural ties.

Meanwhile, 35% of business leaders believe securing an improved UK-EU trade deal would be a major confidence boost for businesses in 2025.

Labour has said there will be no return to free movement within the EU, however there have been reports that officials are working on some sort of scheme specifically for young adults.