🔗 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 companies in Britain, as an increasing proportion of exporters report greater difficulty to do business under the UK’s post-Brexit agreement.

Mounting Exporter Frustration with Current Deal

Urging the government to hasten its reset with Brussels, the British Chambers of Commerce stated that the UK’s existing trade and cooperation agreement was failing to help them grow their sales in the EU. Over 50% of exporters in a survey of almost 1,000 businesses – 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 matter of political preference,” said the BCC’s director of international trade.

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 trade policy changes was comprehensive.

Calls for Action for a Deeper Relationship

The intervention by the trade body – which represents more than 50,000 firms – comes amid growing recognition within the government's senior ranks about the damage of Brexit. Recently, a senior Labour figure became the most recent cabinet minister to advocate for closer economic ties with the EU, in remarks seen as hinting that Britain could enter into a customs arrangement.

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. The Prime Minister has previously insisted he could not foresee a situation where the UK rejoined within his lifetime.

However, 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 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 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 navigate changes 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 talks with Brussels in 2026, including:

• An agreement to reduce inspections on animal and plant products.
• Completing connections between the UK and EU’s carbon markets.
• Creating a scheme for young people to work and travel.
• Gaining British involvement in the EU’s security and defence fund.
• Enhancing cooperation on tax and border simplification.

An official representative said: “We are removing red tape and trade barriers to support jobs, business, and growth. That’s exactly why we renewed our partnership with the EU and are making significant headway in negotiations.”