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Keir Starmer's government has been told that forging a closer trade deal with the European Union is a "strategic necessity" for British firms, as an increasing proportion of exporters report finding it tougher to do business under the existing post-Brexit trade deal.

Mounting Business Dissatisfaction with Post-Brexit Arrangements

Urging the government to hasten its EU relationship reset, the British Chambers of Commerce stated that the UK’s existing trade and cooperation agreement was not supporting them grow their sales in the EU. More than half of exporters in a survey of almost 1,000 businesses – the majority of which were SME 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, getting the EU reset right 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 similar survey a year earlier. It added that just four out of the 946 firms surveyed believed government support on trade policy changes was comprehensive.

Calls for Action for a Deeper Relationship

The intervention by the trade body – which speaks for tens of thousands of companies – coincides with growing recognition within the government's senior ranks about the damage of Brexit. Recently, a senior Labour figure became the most recent cabinet minister 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 clash with Labour’s manifesto, which promised “no return” 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 re-entered the EU in his lifetime.

However, several ministers favouring closer EU links are believed to be among those 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 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 five key proposals for talks with Brussels in 2026, including:

• A deal to cut border checks on agri-food goods.
• Completing connections between the UK and EU’s carbon markets.
• Creating a youth mobility scheme.
• Gaining British involvement in the EU’s defence fund.
• Enhancing cooperation on VAT and customs simplification.

An official representative said: “We are cutting bureaucracy and obstacles to trade to boost employment, companies, and the economy. That’s exactly why we renewed our partnership with the EU and are making strong progress in negotiations.”