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Keir Starmer's government has been told that securing a deeper trading relationship 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 UK’s post-Brexit agreement.

Mounting Business Dissatisfaction with Post-Brexit Arrangements

Urging the government to hasten its reset with Brussels, the leading business group stated that the UK’s existing trade and cooperation agreement was not supporting them grow their sales in the EU. Over 50% of exporters in a poll of nearly one thousand firms – most of whom were SME companies – said the trade deal enacted in 2021 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.

Pointing to a continuing economic cost from Brexit, the trade body noted this figure represented a significant rise from the proportion of dissatisfied companies in a comparable poll a year earlier. It added that just four out of the 946 firms surveyed believed government support on trade policy changes was adequate.

Calls for Action for a Closer Partnership

The intervention by the trade body – which represents more than 50,000 firms – coincides with growing recognition within the government's senior ranks about the damage of Brexit. Recently, Wes Streeting became the latest top Labour politician to advocate for closer economic ties with the EU, in remarks seen as hinting that Britain could enter into a customs arrangement.

Such an arrangement would contradict Labour’s manifesto, which promised “no return” to the EU single market, customs union, or freedom of movement. The Prime Minister has previously insisted he could not foresee any circumstances where the UK re-entered the EU in his lifetime.

Nevertheless, several pro-European ministers are believed to be among those who would like to see the government go further.

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 reduce barriers to trade for exporters to help boost the UK economy. Citing comments from annoyed businesses, 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 all but ceased. 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 animal and plant products.
• Finalising linkages between the UK and EU’s emissions trading schemes.
• 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 tax and border simplification.

A government spokesperson said: “We are 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 strong progress in negotiations.”