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

Mounting Exporter Frustration with Post-Brexit Arrangements

Calling on Labour to accelerate its reset with Brussels, the leading business group stated that the UK’s current TCA was failing to help them grow their sales in the EU. More than half of exporters in a poll of nearly one thousand firms – the majority of which were small and medium-sized 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, securing a successful EU reset is now a strategic necessity, not a political choice,” said the BCC’s director of international trade.

Highlighting an ongoing economic hit 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 four out of the 946 firms surveyed believed government support on trade policy changes was adequate.

Political Pressure 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 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 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. The Prime Minister has previously insisted he could not foresee a situation where the UK rejoined within his lifetime.

Nevertheless, several pro-European ministers are thought to be part of a group who would like to see the government go further.

Key Recommendations for the 2026 Reset

In a report setting out a “business manifesto for the EU reset”, the BCC said the government must prioritise its efforts to minimise trade friction for exporters to support growth in the UK economy. Citing comments from annoyed businesses, it said firms were finding it ever harder to adapt to new rules in EU and UK laws since Brexit.

“Since Brexit our export sales have virtually stopped. The TCA has had no impact in recovering any sales into the EU,” said a manufacturer in Greater Manchester.

The BCC outlined several main recommendations for negotiations with the EU in 2026, including:

• A deal to reduce inspections on agri-food goods.
• Finalising linkages between the UK and EU’s carbon markets.
• 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 tax and border simplification.

An official representative said: “We are removing red tape and trade barriers to support jobs, business, and growth. This is precisely the reason we reset our relationship with the EU and are making strong progress in negotiations.”