A leading Tory Brexiter on Sunday calls on ministers to reopen the UK’s borders to tens of thousands of young workers from EU nations in order to tackle acute post-Brexit labour shortages that he says are driving up inflation.

In an extraordinary admission of the failures of immigration policy since the UK left the EU, former Tory environment secretary George Eustice said Rishi Sunak’s government should begin bilateral negotiations with EU nations immediately, with a view to offering young Europeans under 35 the right to two- year visas to work in this country.

Eustice, who was secretary of state for the environment, food and rural affairs under Boris Johnson, said the deals should be reciprocal so that young UK citizens under 35 would be able to live and work for two years in the same EU member states with which deals were struck. This, he said, would be part of a much-needed “post-Brexit reconciliation” with our European neighbours.

Speaking exclusively to the Observer, Eustice, who is leaving parliament at the next election, was highly critical of the Home Office, saying its skills-based immigration rules were failing the country on many levels.

Referring to the list of professions allowed to work here, he said: “The flaws in our current so-called skills-based immigration system are becoming clearer by the day because we have got a policy that does not correspond to the needs of our economy.

“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.”

Asked if labour shortages and resulting inflationary pressures had been caused by Brexit, Eustice said: “I think we have to stop seeing everything through the prism of Brexit. This isn’t because of Brexit. But it is because of the failure of our post-Brexit immigration policy.”

His comments, which expose the deep splits within the Tory party over immigration, also show how determined some ardent Brexiters are becoming to shift Tory policy in order to try to limit the damage that leaving the EU is causing to the economy and labour market.

He blamed Theresa May when she was prime minister for failing to adopt bilateral visa schemes with EU countries after Brexit, which he said he had always supported.

“This idea of having no temporary visa schemes was not from the Vote Leave campaign,” Eustice said. “It came predominantly from Theresa May. It was a remainer’s interpretation of what Brexit was about. 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.”

In May the home secretary, Suella Braverman, told a National Conservatism conference that there was “no good reason why we can’t train up enough HGV drivers, butchers or fruit pickers” in this country to fill any labour shortages.

Eustice said the Home Office misunderstood the situation with seasonal workers, who did not count towards immigration figures as they were only here for six months. It was important that the Tory party separated the debates about legal and illegal immigration and stopped resorting to “profoundly unhelpful” rhetoric.

Eustice, who comes from a farming family in the West Country, added that Home Office policy was pushing up immigration numbers rather than controlling them, because those allowed in under the skills-based system were told they had to settle permanently, and as a result brought partners and children with them.

By contrast, his visa scheme would be for individuals alone and would last for only two years, after which people would have to return home.

When the UK was a member of the EU, all UK citizens were able to travel and work freely in the EU under freedom of movement rules. But those automatic rights were extinguished with Brexit.

UK citizens now trying to work in the EU face a range of bureaucratic requirements and different rules, with some countries demanding visas and others specific job offers.

Eustice, who started his political career as a member of Ukip, said his scheme, which he is planning to submit to government advisers, would mean many tens of thousands of young EU workers coming to this country to fill vacancies.

Labour shortages have affected mainly the food, restaurants, pubs and hospitality sectors, and are driving up wages and prices in the shops, accentuating the cost of living crisis.

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A new group of Conservative MPs are demanding fewer visas for care workers Photograph: Maureen McLean/REX/Shutterstock

Eustice said he was not calling for a return for the UK to EU freedom of movement but for a solution to benefit Britain and its neighbours. “It is really important as part of that reconciliation that we rekindle that post Brexit friendship with our European neighbours.”

Last week, in a sign of growing Tory turmoil over immigration, a new group of Conservative MPs called on the government to cut a special visa scheme for care workers as part of a plan to reduce net immigration by about 400,000 by the next general election.

The proposals, backed by 20 MPs, including allies of Braverman, were firmly rejected by Downing Street.

Most EU governments would actively welcome more cross-Channel mobility for young people, from school groups and university students to interns and first-jobbers.

Germany’s foreign minister, Annalena Baerbock, said on a visit to London in January that Berlin wanted “practical EU achievements” such as youth exchange programmes and mobility reflected in Germany’s new relationship with the UK. “This is about looking to the future after Brexit,” Baerbock said. Germany and the UK “need to build new bridges in youth exchange, worker mobility, university students and research – in short, in all the areas where people come together.”

Paris has been somewhat less forthcoming – notably on possible bilateral arrangements – but France’s consul general in London, Samer Melki, said last week he was “preoccupied” by the new relationship between the two nations. Non-tourist travel has become “much harder, especially for young people”, he said. “It is really very difficult now to come to the UK to do a work experience placement, to be an au pair or just to do casual work for a while.”

If young French and British people “cannot meet each other any more, cannot learn more about each other even during school visits, which have become much more difficult, it risks putting the two societies on diverging tracks”.

France’s Europe ministry said last month that talks on “bilateral mobility issues” had resumed after Sunak’s visit to Paris, but warned “balances must be maintained” and the Brexit TCA (trade and cooperation agreement) terms must be “properly implemented”.

A Home Office spokesperson 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 members.”

“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.”

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