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Keir Starmer's government has been told that securing a deeper trading relationship with the European Union is a "strategic necessity" for British firms, as an increasing proportion of exporters report greater difficulty to do business under the UK’s post-Brexit agreement.

Growing Business Dissatisfaction with Post-Brexit Arrangements

Urging the government to hasten its reset with Brussels, 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 SME companies – said the trade deal enacted in 2021 was failing to assist.

“Following a budget that did not to deliver meaningful growth 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 similar survey 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 Closer Partnership

This statement from the business group – which speaks for tens of thousands of companies – coincides with 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 interpreted as a suggestion that Britain could enter into a customs arrangement.

Such an arrangement would contradict Labour’s manifesto, which promised “no going back” to the EU internal market, customs bloc, or free movement. Starmer has also stated in the past he could not foresee a situation where the UK rejoined within 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 BCC said the government must focus its work to reduce barriers to trade for exporters to support growth in the UK economy. Citing comments from annoyed businesses, it said firms were finding it ever harder 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 zero effect in winning back any business into the EU,” said a manufacturer in the North West.

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

• A deal to reduce inspections on agri-food goods.
• Completing connections between the UK and EU’s emissions trading schemes.
• Establishing a scheme for young people to work and travel.
• Gaining British involvement in the EU’s defence fund.
• Enhancing cooperation on tax and border simplification.

An official representative said: “This government is removing red tape and obstacles to trade to boost employment, companies, and the economy. That’s exactly why we renewed our partnership with the EU and are making strong progress in negotiations.”