🔗 Share this article

Keir Starmer's government has been told that forging a closer trade deal with the European Union is a "critical imperative" for British firms, as an increasing proportion of exporters report greater difficulty to do business under the existing post-Brexit trade deal.

Mounting Exporter Frustration with Current Deal

Calling on Labour to accelerate its EU relationship reset, the British Chambers of Commerce stated that the UK’s existing trade and cooperation agreement was failing to help them increase exports in the EU. Over 50% of exporters in a poll of nearly one thousand firms – the majority of which 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 political choice,” said the BCC’s director of international trade.

Pointing to a continuing economic cost from Brexit, the business group noted this figure represented a significant rise from the proportion of dissatisfied companies in a comparable poll a year earlier. It added that just four out of the 946 firms surveyed believed government support on navigating new trade rules was adequate.

Political Pressure for a Deeper Relationship

This statement from the business group – which represents more than 50,000 firms – comes amid increasing awareness within Labour’s frontbench about the damage of Brexit. Recently, a senior Labour figure became the most recent cabinet minister to call for a deeper trading relationship 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 internal market, customs bloc, or free movement. The Prime Minister has previously insisted he could not foresee any circumstances where the UK re-entered the EU in his lifetime.

Nevertheless, several pro-European ministers are thought to be part of a group who would like to see the government go further.

Key Recommendations for the 2026 Reset

In a report setting out a “corporate blueprint for the EU reset”, the BCC said the government must focus its work to minimise trade friction for exporters to help boost 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.

“Our overseas sales since leaving the EU have virtually stopped. The TCA has had zero effect in recovering any sales into the EU,” said a manufacturer in the North West.

The BCC outlined five key proposals for talks with Brussels in 2026, including:

• A deal to cut border checks on agri-food goods.
• Finalising linkages between the UK and EU’s emissions trading schemes.
• Creating a scheme for young people to work and travel.
• Securing full UK participation in the EU’s security and defence fund.
• Enhancing cooperation on tax and border simplification.

An official representative said: “This government is cutting bureaucracy and trade barriers to support jobs, business, and growth. This is precisely the reason we renewed our partnership with the EU and are making strong progress in negotiations.”