🔗 Share this article

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 an increasing proportion of exporters report greater difficulty to operate 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 existing trade and cooperation agreement was failing to help them increase exports in the EU. More than half of exporters in a poll of nearly one thousand firms – the majority of which were SME companies – said the trade deal negotiated by Boris Johnson’s government was failing to assist.

“With a budget that failed to deliver substantial economic expansion or trade support, securing a successful EU reset is now a business-critical need, not a matter of political preference,” 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 dissatisfied companies 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.

Political Pressure for a Deeper Relationship

This statement from the business group – which represents more than 50,000 firms – comes amid growing recognition within Labour’s frontbench about the damage of Brexit. Recently, Wes Streeting 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 clash with Labour’s manifesto, which promised “no return” to the EU internal market, customs bloc, or free movement. The Prime Minister has stated in the past he could not foresee any circumstances where the UK rejoined within his lifetime.

However, several pro-European ministers are believed to be among those who would prefer the administration to take more ambitious steps.

Key Recommendations for the EU Negotiations

In a report setting out a “corporate blueprint for the EU reset”, the BCC said the government must focus its work to minimise trade friction for exporters to help boost the UK economy. Citing comments from annoyed businesses, it said firms were finding it ever harder 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 a manufacturer in Greater Manchester.

The BCC outlined several main recommendations 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 carbon markets.
• Creating 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: “This government is removing red tape and obstacles to trade to support jobs, business, and growth. This is precisely the reason we renewed our partnership with the EU and are making significant headway in negotiations.”