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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 companies in Britain, as a growing number of exporters report greater difficulty to operate under the UK’s post-Brexit agreement.

Mounting 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 existing trade and cooperation agreement was not supporting them grow their sales in the EU. Over 50% of exporters in a poll of nearly one thousand firms – the majority of which were SME companies – said the trade deal enacted in 2021 was failing to assist.

“Following a budget that did not 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.

Pointing to a continuing economic cost from Brexit, the business group noted this figure represented a significant rise from the proportion of dissatisfied companies in a comparable poll a year earlier. It added that just a tiny fraction of the businesses surveyed believed government support on navigating new trade rules was adequate.

Calls for Action for a Closer Partnership

The intervention by the trade body – which represents more than 50,000 firms – coincides with growing recognition within Labour’s frontbench about the economic impact of leaving the EU. Recently, a senior Labour figure became the latest top Labour politician to call for a deeper trading relationship with the EU, in remarks interpreted as a suggestion that Britain could join a customs union.

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 previously insisted he could not foresee any circumstances where the UK rejoined within his lifetime.

However, several ministers favouring closer EU links are believed to be among those who would like to see the government go further.

Business Proposals for the 2026 Reset

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. Quoting frustrated survey respondents, 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 zero effect in winning back any business into the EU,” said a manufacturer in Greater Manchester.

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

• An agreement to cut border checks on animal and plant products.
• Finalising linkages between the UK and EU’s emissions trading schemes.
• Establishing a scheme for young people to work and travel.
• Securing full UK participation in the EU’s security and defence fund.
• Enhancing cooperation on VAT and customs simplification.

A government spokesperson said: “We are cutting bureaucracy and trade barriers to support jobs, business, and growth. That’s exactly why we reset our relationship with the EU and are making strong progress in negotiations.”