The planned UK-EU youth migration deal is at risk of collapsing over demands for the British government to offer discounted university fees to European students.
Sir Keir Starmer and Ursula Von der Leyen agreed to pursue a deal to allow young people to work and live between the UK and EU with hopes it will be signed off at a joint summit this summer.
The UK has been pushing for a cap on the number of young Europeans able to be in the UK, it is understood.
Sources hinted that the UK favours a programme that is closer to existing young “working holiday” visa schemes, such as with New Zealand.
But EU member states are reluctant to agree to any caps without a concession to allow their students to pay lower fees than currently offered to foreign pupils studying at UK universities.
Some EU nations believe any such discount must be available to all European students, not just those covered under a capped youth mobility scheme, The i Paper understands.
But offering subsidised fees could come at a financial and political cost to the UK Government. British sources indicated there was no appetite to roll over on this without a significant concession from the EU.
As the second EU-UK summit nears, with the meeting expected to be held in Brussels in June or July, the need to unblock the stalled negotiations is becoming increasingly urgent.
Both sides acknowledge that there is a significant challenge in finding a compromise agreement.
The so-called youth mobility scheme is one of three key policy areas Starmer and European Commission President Von der Leyen agreed to work towards after May’s “reset” summit.
Details of any such policy were very vague, aside from stipulations that it would help young people from both the UK and the EU work, study, travel, or volunteer between the two.
University fees were not specifically mentioned in the common understanding that was reached between the two but are understood to be in the council’s negotiating mandate.
Freer movement for young people is a key priority of European states concerned by the significant fall in the number of their young people able to live, study and work in the UK.
It is considered a key bargaining chip that could be used to secure the other agreements – such as on defence, food and drink and energy – over the line and force concessions from either side.
From the UK perspective, the lack of prior agreement that any youth deal would include home fees means any suggestion of a concession would require a big trade-off from the EU.
Even then, the suggestion of equalising fees to make them the same as for UK-born students – which would require significant funding to plug the gap in university finances – has been dismissed by British sources.
There may, however, be scope for a compromise arrangement of discounted fees that are not as low as those for UK students.
The i Paper revealed last year that some EU officials were discussing a compromise European-only fee set between domestic and international charges.
This would mean European students stop having to pay international fees of up to £38,000 but would not pay domestic fees, which are capped at £9,535.
But this compromise, sources said, would be expensive for the Government because it would leave a financial hole for cash-strapped universities.
And it would be a significant win for the EU, which the UK would expect to see as a return concession.
The UK Government wants any scheme to be similar to existing youth travel deals with countries like Australia and New Zealand.
These allow a certain number of people, generally aged 35 or under, to be in the UK for a limited period, with the flexibility to switch between work, study, or travel.
A European diplomatic source told The i Paper that the UK should see the soft-power value of making its world-class universities accessible to more EU students, as they could go on to become senior political or other figures who will have a favourable view of Britain if they studied here.
The source suggested that the UK Government could subsidise lower university fees for EU students based on this rationale, as it would bring longer-term benefits.
A Government spokesperson said: “We will not give a running commentary on ongoing talks.
“We are working together with the EU to create a balanced youth experience scheme which will create new opportunities for young people to live, work, study and travel.
“Any final scheme must be time-limited, capped and will be based on our existing youth mobility schemes, which do not include access to home tuition fee status.
A European Commission spokesperson said negotiations were ongoing and would be concluded by the time of the next summit, but would not comment on what is being discussed.
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