A leading Tory Brexiteer has admitted the UK needs more workers from the EU to ease labour shortages and tackle inflation.
Former environment secretary George Eustice called on Rishi Sunak to negotiate bilateral deals with European countries offering work visas for young people.
He hit out at the prime minister over labour shortages and the resulting inflationary pressures, claiming they were not caused by Brexit, but by “the failure of our post-Brexit immigration policy”.
And Mr Eustice challenged Mr Sunak over “flaws” in the current “so-called skills-based immigration system”, adding that the policy does not correspond to the needs of the economy.
While he did not call for a return to freedom of movement between the UK and EU, Mr Eustice urged Mr Sunak to “rekindle that post-Brexit friendship with our European neighbours”.
The former minister’s comments will be seen as an admission of the failings of the government’s post-Brexit immigration policy. They come amid growing unease among Conservative MPs about the failings of Brexit, and as senior Tory Tobias Ellwood has called for Britain to rejoin the single market.
Mr Eustice told The Observer: “We are allowing in people who are deemed skilled such as lawyers, insolvency practitioners, museum officers, even disc jockeys, when we have no shortages whatsoever in those sectors.
“But we are not allowing people to come here to work in sectors like the food industry, even though there are acute labour shortages in these sectors, and that is contributing to inflation.
“So that is the big problem. My proposal is that we commence bilateral negotiations with EU member states, starting with countries like Bulgaria, Romania and the Baltic states, and widen it to the whole of the EU eventually, to establish a reciprocal youth-mobility visa scheme.”
Mr Eustice said the agreements should see EU citizens under 35 allowed to live and work in the UK for two years, while UK citizens would be allowed to do the same in EU member states with which deals were struck.
His intervention is the latest sign of a split within the Conservative Party on immigration, coming just days after a group of right-wing MPs launched the so-called New Conservatives.
The group is calling for Mr Sunak to crack down on foreign social care workers and overseas students to bring net migration down from 606,000 to below 226,000 before the next election.
The New Conservatives group was slapped down by No10 and branded “populist and isolationist” by fellow Tory MPs.
Mr Eustice also attacked Theresa May’s post-Brexit immigration policy, calling it “a remainer’s interpretation of what Brexit was about”.
“This idea of having no temporary visa schemes was not from the Vote Leave campaign,” he said.
Mr Eustice added: “That was not what Brexit was about. People wanted controlled immigration and not to pull up the drawbridge and allow no one in at all.”
Industries including hospitality, retail, construction and transport have been blighted by the loss of EU workers post-Brexit.
The British Retail Consortium has blamed Brexit for “exacerbating Labour shortages” facing the sector.
A home office spokesman said: “We already have successful Youth Mobility Schemes with 10 countries, including Australia and New Zealand, and remain open to agreeing them with our international partners, including EU member states.
“We work closely with the Migration Advisory Committee to ensure our points-based system delivers for the UK and works in the best interests of the economy, including reviewing the Shortage Occupation List to ensure it reflects the current labour market.”
