Chancellor Rachel Reeves has finally admitted that Labour is planning to “betray” Brexit by agreeing to a new youth mobility scheme with the European Union. Speaking in Washington DC, Ms Reeves openly admitted that the Government wants “to enable young people from Europe and the UK to be able to work and travel overseas”.

The new policy ambition is a major U-turn from Sir Keir Starmer’s ministers after the Government previously flatly rejected calls for such a scheme. The Conservatives said the Government’s new negotiating ambition is a betrayal of the 2016 referendum vote. Shadow Home Secretary Chris Philp blasted: “Rachel Reeves’s choices have damaged the economy, meaning borrowing is up significantly, inflation is rising, and economic growth forecasts have been cut.”

“That’s why the Treasury has forced her to do what it always does: import cheap foreign labour to make up for the damage she has inflicted on the economy.

“Be in no doubt, this is just another attempt by Labour to betray Brexit and reopen the door to uncontrolled and unlimited immigration. Every time Labour negotiates, Britain loses.”

Meanwhile, former home secretary Suella Braverman, an ardent Brexiteer, told the Express the planned sell-out is merely the “thin end of the wedge”.

She warned: “The British people voted to take back control and end free movement of people. This agreement is the thin end of the wedge and the continuation of the Brexit betrayal.

“Labour never accepted the result of the referendum and are determined to see us return into the clutches of the European Union by stealth.”

Former business secretary Sir Jacob Rees-Mogg added: “This is part of Labour’s attempt to get the UK back into the EU, but it is giving free movement a different name in an attempt to con British voters.”

He warned: “The Conservatives must promise to annul any deal of this kind and control migration regardless of where it is coming from.”

Ms Reeves insisted the new position is compatible with Labour’s pledge to bring down migration, and continued to claim the Government remains opposed to freedom of movement.

She said: “We’re going to bring down net migration and we aren’t going to return to freedom of movement.

“But we are hosting the summit next month. We do want to see better trading relationships between our countries and we do want to enable young people from Europe and the UK to be able to work and travel overseas.

“But we’ve got to get the balance right, because I do not want to see net migration increasing. I want to see net migration falling.”

However, Labour sources have previously described the EU’s proposals as precisely that.

A year ago, while courting votes ahead of their landslide election win, a Labour Party official slapped down Brussels’ proposal as “synonymous with freedom of movement”, something the party told voters was completely off the table.

Last August, Sir Keir’s official spokesman maintained: “We are not considering an EU-wide youth mobility scheme and there will be no return to freedom of movement.”

The European Commission has been pushing for a UK-EU youth mobility scheme for the past year, which would enable citizens between 18 and 30 to live and work in their chosen destination for up to four years.

Sir Keir is under pressure from anti-Brexit Labour MP backbenchers to cave into the EU as part of his wider reset of relations with the continent.

More than 60 of his MPs signed a letter to the PM’s minister for EU negotiations, Nick Thomas-Symonds, demanding he agree to a capped youth visa scheme with Brussels.

The letter read: “We want to see a new and bespoke youth visa scheme for UK and EU citizens aged under 30.

“As with all of the UK’s existing schemes, we believe this should be time-limited and subject to a cap on numbers.”

This week a source with knowledge of the ongoing talks suggested the youth mobility scheme could be capped as high as 70,000 people per year.

This is leading to a split in government, as Home Secretary Yvette Cooper attempts to stick to her party’s manifesto pledge of bringing down net migration.

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Ms Cooper is reportedly insisting on both a cap on numbers, and a time limit for those participating of just one year – a quarter of what the EU has called for.

The EU is reportedly receptive to the Home Secretary’s demands, and could be willing to concede on the shorter time length.

An EU source said: “Everyone is being cautious but there is a desire to find a way that removes any suggestion that this is going to increase migration. It could come in many forms and quotas is just one.”

Brussels may also rebrand the scheme as a “youth experience” programme in order to mitigate anger among Brexiteers.

The Cabinet Office declined to comment on Ms Reeves’ latest intervention, saying London and Brussels are “discussing a wide range of issues”.