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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 companies in Britain, as a growing number of exporters report greater difficulty to operate under the UK’s post-Brexit agreement.

Mounting Exporter Frustration with Current Deal

Calling on Labour to accelerate its reset with Brussels, the leading business group stated that the UK’s current TCA was not supporting them grow their sales in the EU. Over 50% 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.

“Following a budget that did not to deliver meaningful growth or trade support, getting the EU reset right is now a strategic necessity, not a political choice,” said Steve Lynch.

Pointing to a continuing economic cost from Brexit, the business group noted this figure represented a significant rise from the proportion of unhappy firms in a comparable poll 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 Deeper Relationship

This statement from the business group – which represents more than 50,000 firms – coincides with increasing awareness within the government's senior ranks about the damage of Brexit. Recently, Wes Streeting 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 going back” to the EU single market, customs union, or freedom of movement. Starmer has also previously insisted he could not foresee a situation 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 like to see the government go further.

Key Recommendations for the 2026 Reset

In a report setting out a “corporate blueprint for the EU reset”, the business group said the government must prioritise its efforts to minimise trade friction 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 all but ceased. The TCA has had zero effect in recovering any sales into the EU,” said a manufacturer in Greater Manchester.

The BCC outlined five key proposals for negotiations with the EU in 2026, including:

• An agreement to reduce inspections on agri-food goods.
• Completing connections between the UK and EU’s emissions trading schemes.
• Establishing a youth mobility scheme.
• Securing full UK participation in the EU’s security and defence fund.
• Improving collaboration on VAT and customs simplification.

A government spokesperson said: “We are cutting bureaucracy and trade barriers to support jobs, business, and growth. That’s exactly why we reset our relationship with the EU and are making strong progress in negotiations.”