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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 an increasing proportion of exporters report greater difficulty to do business under the UK’s post-Brexit agreement.

Mounting 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 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 not helping them.

“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.

Highlighting an ongoing economic hit from Brexit, the trade body noted this figure represented a significant rise from the proportion of dissatisfied companies in a similar survey a year earlier. It added that just four out of the 946 firms surveyed believed government support on navigating new trade rules was comprehensive.

Political Pressure for a Closer Partnership

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, a senior Labour figure became the latest top Labour politician 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 internal market, customs bloc, or free movement. The Prime Minister has stated in the past he could not foresee any circumstances where the UK re-entered the EU in his lifetime.

However, several pro-European ministers are thought to be part of a group who would prefer the administration to take more ambitious steps.

Business Proposals for the EU Negotiations

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 ever harder to navigate changes in EU and UK laws since Brexit.

“Since Brexit our export sales have all but ceased. The TCA has had no impact in winning back any business into the EU,” said a manufacturer in Greater Manchester.

The BCC outlined several main recommendations for talks with Brussels in 2026, including:

• An agreement to cut border checks on animal and plant products.
• Completing connections 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.
• Improving collaboration on VAT and customs 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 renewed our partnership with the EU and are making strong progress in negotiations.”