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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 finding it tougher to do business under the existing post-Brexit trade deal.

Mounting Exporter Frustration with Current Deal

Calling on Labour to accelerate its EU relationship reset, the British Chambers of Commerce stated that the UK’s current TCA was failing to help them grow their sales 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 substantial economic expansion or trade support, securing a successful EU reset 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 trade body noted this figure represented a significant rise from the proportion of dissatisfied companies in a similar survey a year earlier. It added that just a tiny fraction of the businesses surveyed believed government support on trade policy changes was adequate.

Calls for Action for a Deeper Relationship

This statement from the business group – which speaks for tens of thousands of companies – comes amid increasing awareness within Labour’s frontbench about the economic impact of leaving the EU. Recently, Wes Streeting 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 contradict Labour’s manifesto, which promised “no going back” 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 thought to be part of a group who would prefer the administration to take more ambitious steps.

Key Recommendations for the 2026 Reset

According to a document 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 help boost the UK economy. Quoting frustrated survey respondents, it said firms were finding it ever harder to navigate changes 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 one small manufacturing firm in Greater Manchester.

The BCC outlined five key proposals for talks with Brussels in 2026, including:

• A deal to reduce inspections on agri-food goods.
• Completing connections 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 defence fund.
• Enhancing cooperation on VAT and customs simplification.

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