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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 greater difficulty to do business under the UK’s post-Brexit agreement.

Mounting Business Dissatisfaction with Post-Brexit Arrangements

Calling on Labour to accelerate its reset with Brussels, the leading business group stated that the UK’s existing trade and cooperation agreement was failing to help 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 not helping them.

“Following a budget that did not 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 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 a tiny fraction of the businesses surveyed believed government support on trade policy changes was adequate.

Calls for Action for a Closer Partnership

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 interpreted as a suggestion 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 rejoined within his lifetime.

Nevertheless, several ministers favouring closer EU links are thought to be part of a group who would prefer the administration to take more ambitious steps.

Key Recommendations for the 2026 Reset

In a report setting out a “corporate blueprint for the EU reset”, the BCC said the government must prioritise its efforts to minimise trade friction for exporters to help boost 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.

“Our overseas sales since leaving the EU have virtually stopped. The TCA has had no impact in recovering any sales into the EU,” said one small manufacturing firm in Greater Manchester.

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.
• Creating 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.

A government spokesperson said: “We are cutting bureaucracy and obstacles to trade to support jobs, business, and growth. This is precisely the reason we reset our relationship with the EU and are making significant headway in negotiations.”