🔗 Share this article

Keir Starmer's government has been told that forging a closer trade deal with the European Union is a "strategic necessity" for British firms, as an increasing proportion of exporters report finding it tougher to operate under the existing post-Brexit trade deal.

Growing Exporter Frustration with Current Deal

Calling on Labour to accelerate its EU relationship reset, the British Chambers of Commerce stated that the UK’s current TCA was not supporting them grow their sales in the EU. More than half of exporters in a survey of almost 1,000 businesses – most of whom were small and medium-sized companies – said the trade deal enacted in 2021 was not helping them.

“Following a budget that did not to deliver meaningful growth or trade support, getting the EU reset right is now a business-critical need, not a political choice,” said Steve Lynch.

Pointing to a continuing economic cost from Brexit, the business group noted this figure represented a 13 percentage point increase from the proportion of unhappy firms 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.

Calls for Action for a Deeper Relationship

The intervention by the trade body – which represents more than 50,000 firms – 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 seen as hinting that Britain could join a customs union.

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 a situation 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.

Business Proposals for the EU Negotiations

According to a document setting out a “business manifesto for the EU reset”, the business group said the government must prioritise its efforts to reduce barriers to trade 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.

“Since Brexit our export sales have virtually stopped. The TCA has had no impact in winning back any business into the EU,” said one small manufacturing firm in Greater Manchester.

The BCC outlined several main recommendations for talks with Brussels in 2026, including:

• A deal to reduce inspections on agri-food goods.
• Completing connections between the UK and EU’s carbon markets.
• Establishing a scheme for young people to work and travel.
• Securing full UK participation in the EU’s defence fund.
• Enhancing cooperation on VAT and customs simplification.

An official representative said: “This government is cutting bureaucracy and trade barriers to boost employment, companies, and the economy. That’s exactly why we reset our relationship with the EU and are making strong progress in negotiations.”