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Keir Starmer's government has been told that securing a deeper trading relationship with the European Union is a "critical imperative" for companies in Britain, as a growing number of exporters report finding it tougher to operate under the existing post-Brexit trade deal.

Growing Business Dissatisfaction with Post-Brexit Arrangements

Calling on Labour to accelerate its reset with Brussels, the leading business group stated that the UK’s current TCA was not supporting them increase exports in the EU. Over 50% of exporters in a poll of nearly one thousand firms – most of whom were small and medium-sized companies – said the trade deal enacted in 2021 was failing to assist.

“With a budget that failed to deliver substantial economic expansion or trade support, securing a successful EU reset is now a strategic necessity, not a matter of political preference,” said the BCC’s director of international trade.

Highlighting an ongoing economic hit from Brexit, the trade body noted this figure represented a significant rise from the proportion of unhappy firms in a similar survey a year earlier. It added that just a tiny fraction of the businesses surveyed believed government support on trade policy changes was adequate.

Calls for Action for a Deeper Relationship

The intervention by the trade body – which speaks for tens of thousands of companies – coincides with increasing awareness within the government's senior ranks about the damage of Brexit. Recently, a senior Labour figure became the latest top Labour politician to advocate for closer economic ties with the EU, in remarks interpreted as a suggestion that Britain could enter into a customs arrangement.

This kind of proposal would clash with Labour’s manifesto, which promised “no return” to the EU single market, customs union, or freedom of movement. The Prime Minister has stated in the past he could not foresee any circumstances where the UK rejoined within his lifetime.

Nevertheless, several ministers favouring closer EU links are thought to be part of a group who would like to see the government go further.

Business Proposals for the EU Negotiations

In a report setting out a “business manifesto for the EU reset”, the business group said the government must focus its work to reduce barriers to trade for exporters to support growth in the UK economy. Citing comments from annoyed businesses, it said firms were finding it increasingly difficult to adapt to new rules in EU and UK laws since Brexit.

“Since Brexit our export sales have virtually stopped. The TCA has had zero effect in recovering any sales into the EU,” said a manufacturer in Greater Manchester.

The BCC outlined five key proposals for negotiations with the EU in 2026, including:

• An agreement to reduce inspections on animal and plant products.
• Finalising linkages between the UK and EU’s emissions trading schemes.
• Creating a scheme for young people to work and travel.
• Gaining British involvement in the EU’s defence fund.
• Enhancing cooperation on tax and border simplification.

A government spokesperson said: “We are cutting bureaucracy and trade barriers to support jobs, business, and growth. That’s exactly why we reset our relationship with the EU and are making strong progress in negotiations.”