🔗 Share this article

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 an increasing proportion of exporters report finding it tougher to operate under the UK’s post-Brexit agreement.

Growing Exporter Frustration with Post-Brexit Arrangements

Calling on Labour to accelerate its EU relationship reset, the British Chambers of Commerce stated that the UK’s current TCA was not supporting them increase exports in the EU. Over 50% of exporters in a poll of nearly one thousand firms – most of whom were small and medium-sized companies – said the trade deal enacted in 2021 was not helping them.

“With a budget that failed to deliver meaningful growth or trade support, securing a successful EU reset 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 a tiny fraction of the businesses surveyed believed government support on navigating new trade rules was adequate.

Calls for Action for a Deeper Relationship

The intervention by the trade body – which speaks for tens of thousands of companies – comes amid growing recognition within the government's senior ranks about the damage of Brexit. Recently, Wes Streeting 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 return” to the EU internal market, customs bloc, or free movement. Starmer has also stated in the past he could not foresee a situation where the UK rejoined within his lifetime.

Nevertheless, several ministers favouring closer EU links are thought to be part of a group 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 business group said the government must prioritise its efforts to reduce barriers to trade 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 virtually stopped. The TCA has had no impact in recovering any sales into the EU,” said a manufacturer in the North West.

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

• An agreement to cut border checks on animal and plant products.
• 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.
• Improving collaboration on VAT and customs simplification.

A government spokesperson said: “We are removing red tape and trade barriers to support jobs, business, and growth. That’s exactly why we renewed our partnership with the EU and are making significant headway in negotiations.”