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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 a growing number of exporters report greater difficulty to do business under the UK’s post-Brexit agreement.

Growing Business Dissatisfaction 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 failing to help them grow their sales in the EU. Over 50% of exporters in a poll of nearly one thousand firms – the majority of which were small and medium-sized 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, 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 a tiny fraction of the businesses surveyed believed government support on trade policy changes was adequate.

Calls for Action for a Deeper Relationship

The intervention by the trade body – which speaks for tens of thousands of companies – comes amid increasing awareness within the government's senior ranks about the damage of Brexit. Recently, a senior Labour figure became the most recent cabinet minister 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 clash with 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.

However, several ministers favouring closer EU links 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 “corporate blueprint for the EU reset”, the business group said the government must prioritise its efforts 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 increasingly difficult 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 the North West.

The BCC outlined five key proposals for talks with Brussels in 2026, including:

• A deal to cut border checks on animal and plant products.
• 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 obstacles to trade to support jobs, business, and growth. That’s exactly why we renewed our partnership with the EU and are making strong progress in negotiations.”