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Keir Starmer's government has been told that forging a closer trade deal with the European Union is a "strategic necessity" for companies in Britain, as an increasing proportion of exporters report greater difficulty to operate under the UK’s post-Brexit agreement.

Growing Exporter Frustration 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 failing to help them increase exports in the EU. Over 50% of exporters in a survey of almost 1,000 businesses – most of whom were SME companies – said the trade deal negotiated by Boris Johnson’s government was failing to assist.

“With a budget that failed to deliver substantial economic expansion or trade support, getting the EU reset right is now a strategic necessity, not a political choice,” said Steve Lynch.

Highlighting an ongoing economic hit 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 a tiny fraction of the businesses surveyed believed government support on trade policy changes was adequate.

Calls for Action for a Closer Partnership

This statement from the business group – which represents more than 50,000 firms – coincides with increasing awareness within Labour’s frontbench about the damage of Brexit. Recently, a senior Labour figure became the latest top Labour politician to call for a deeper trading relationship with the EU, in remarks seen as hinting that Britain could enter into a customs arrangement.

Such an arrangement would contradict Labour’s manifesto, which promised “no going back” to the EU single market, customs union, or freedom of 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 ministers favouring closer EU links are believed to be among those who would prefer the administration to take more ambitious steps.

Key Recommendations for the 2026 Reset

According to a document setting out a “corporate blueprint for the EU reset”, the business group said the government must prioritise its efforts to minimise trade friction 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 all but ceased. The TCA has had no impact in recovering any sales into the EU,” said one small manufacturing firm in the North West.

The BCC outlined several main recommendations for negotiations with the EU in 2026, including:

• A deal to reduce inspections on animal and plant products.
• Completing connections 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.
• Improving collaboration on tax and border simplification.

An official representative said: “We are removing red tape and obstacles to trade to support jobs, business, and growth. This is precisely the reason we reset our relationship with the EU and are making significant headway in negotiations.”