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Keir Starmer's government has been told that securing a deeper trading relationship with the European Union is a "critical imperative" for British firms, as a growing number of exporters report finding it tougher to operate under the existing post-Brexit trade deal.

Growing 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 failing to help them grow their sales in the EU. More than half of exporters in a poll of nearly one thousand firms – most of whom were small and medium-sized companies – said the trade deal negotiated by Boris Johnson’s government 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 Steve Lynch.

Highlighting an ongoing economic hit from Brexit, the trade body noted this figure represented a significant rise from the proportion of unhappy firms 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.

Calls for Action for a Deeper Relationship

This statement from the business group – which represents more than 50,000 firms – coincides with growing recognition within Labour’s frontbench about the economic impact of leaving the EU. Recently, a senior Labour figure became the latest top Labour politician to call for a deeper trading relationship with the EU, in remarks interpreted as a suggestion that Britain could enter into a customs arrangement.

Such an arrangement would contradict Labour’s manifesto, which promised “no going back” 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 ministers favouring closer EU links are believed to be among those who would like to see the government go further.

Business Proposals for the EU Negotiations

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 help boost the UK economy. Quoting frustrated survey respondents, it said firms were finding it increasingly difficult to navigate changes in EU and UK laws since Brexit.

“Our overseas sales since leaving the EU have virtually stopped. The TCA has had zero effect in winning back any business into the EU,” said one small manufacturing firm in the North West.

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

• A deal to cut border checks on animal and plant products.
• Completing connections between the UK and EU’s emissions trading schemes.
• Creating a youth mobility scheme.
• Securing full UK participation in the EU’s defence fund.
• Enhancing cooperation on tax and border simplification.

A government spokesperson said: “This government is removing red tape and trade barriers to boost employment, companies, and the economy. That’s exactly why we renewed our partnership with the EU and are making significant headway in negotiations.”