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Keir Starmer's government has been told that forging a closer trade deal with the European Union is a "critical imperative" for British firms, as a growing number of exporters report finding it tougher to operate under the existing post-Brexit trade deal.

Mounting Exporter Frustration with Current Deal

Urging the government to hasten its reset with Brussels, the leading business group stated that the UK’s existing trade and cooperation agreement was not supporting them increase exports in the EU. More than half of exporters in a poll of nearly one thousand firms – most of whom were SME 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 business-critical need, not a political choice,” said the BCC’s director of international trade.

Pointing to a continuing economic cost from Brexit, the trade body noted this figure represented a 13 percentage point increase from the proportion of dissatisfied companies in a similar survey a year earlier. It added that just a tiny fraction of the businesses surveyed believed government support on trade policy changes was adequate.

Political Pressure for a Closer Partnership

This statement from the business group – which represents more than 50,000 firms – coincides with growing recognition within Labour’s frontbench about the damage of Brexit. Recently, Wes Streeting became the most recent cabinet minister to call for a deeper trading relationship with the EU, in remarks interpreted as a suggestion that Britain could join a customs union.

This kind of proposal would contradict Labour’s manifesto, which promised “no return” to the EU single market, customs union, or freedom of 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 like to see the government go further.

Key Recommendations for the 2026 Reset

According to a document setting out a “corporate blueprint 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 virtually stopped. The TCA has had zero effect in recovering any sales into the EU,” said a manufacturer in the North West.

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

• A deal to cut border checks on agri-food goods.
• Completing connections between the UK and EU’s carbon markets.
• Establishing a youth mobility scheme.
• Gaining British involvement in the EU’s security and defence fund.
• Improving collaboration on VAT and customs simplification.

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