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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 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 British Chambers of Commerce stated that the UK’s current TCA was not supporting them increase exports in the EU. More than half of exporters in a survey of almost 1,000 businesses – 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 meaningful growth or trade support, securing a successful EU reset is now a business-critical need, not a matter of political preference,” said the BCC’s director of international trade.

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 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.

Political Pressure for a Deeper Relationship

The intervention by the trade body – which represents more than 50,000 firms – comes amid increasing awareness within Labour’s frontbench 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 seen as hinting that Britain could join a customs union.

This kind of proposal would clash with Labour’s manifesto, which promised “no return” to the EU single market, customs union, or freedom of movement. The Prime Minister has stated in the past he could not foresee a situation where the UK rejoined within his lifetime.

However, several pro-European ministers are believed to be among those who would prefer the administration to take more ambitious steps.

Key Recommendations for the EU Negotiations

According to a document setting out a “business manifesto for the EU reset”, the business group said the government must prioritise its efforts to reduce barriers to trade 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 all but ceased. The TCA has had zero effect in winning back any business 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 reduce inspections on animal and plant products.
• Completing connections between the UK and EU’s carbon markets.
• Creating a scheme for young people to work and travel.
• Securing full UK participation in the EU’s defence fund.
• Improving collaboration on tax and border simplification.

An official representative said: “This government is cutting bureaucracy and obstacles to trade 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.”