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 a growing number of exporters report finding it tougher to do business under the existing post-Brexit trade deal.
Mounting Exporter Frustration with Current Deal
Calling on Labour to accelerate its reset with Brussels, the leading business group stated that the UK’s existing trade and cooperation agreement was not supporting them increase exports in the EU. More than half of exporters in a poll of nearly one thousand firms – the majority of which were SME companies – said the trade deal negotiated by Boris Johnson’s government was not helping them.
“Following a budget that did not to deliver substantial economic expansion or trade support, securing a successful EU reset is now a business-critical need, not a political choice,” 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 comparable poll a year earlier. It added that just four out of the 946 firms surveyed believed government support on trade policy changes was comprehensive.
Calls for Action for a Deeper Relationship
This statement from the business group – which represents more than 50,000 firms – comes amid increasing awareness within the government's senior ranks about the economic impact of leaving the EU. Recently, Wes Streeting became the most recent cabinet minister 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 going back” to the EU internal market, customs bloc, or free movement. Starmer has also previously insisted he could not foresee a situation where the UK rejoined within his lifetime.
Nevertheless, several pro-European ministers are believed to be among those who would prefer the administration to take more ambitious steps.
Key Recommendations for the EU Negotiations
In a report setting out a “corporate blueprint 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. Quoting frustrated survey respondents, it said firms were finding it ever harder to navigate changes in EU and UK laws since Brexit.
“Our overseas sales since leaving the EU have all but ceased. The TCA has had no impact in recovering any sales into the EU,” said one small manufacturing firm in Greater Manchester.
The BCC outlined several main recommendations for talks with Brussels in 2026, including:
- An agreement to reduce inspections on agri-food goods.
- Finalising linkages between the UK and EU’s emissions trading schemes.
- Establishing a youth mobility scheme.
- Gaining British involvement in the EU’s security and 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. This is precisely the reason we renewed our partnership with the EU and are making significant headway in negotiations.”
