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

Mounting Business Dissatisfaction with Post-Brexit Arrangements

Urging the government to hasten its EU relationship reset, the leading business group 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 – most of whom were small and medium-sized companies – said the trade deal negotiated by Boris Johnson’s government 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 trade body 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.

Political Pressure for a Closer Partnership

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 advocate for closer economic ties with the EU, in remarks seen as hinting that Britain could join a customs union.

Such an arrangement would contradict Labour’s manifesto, which promised “no return” to the EU single market, customs union, or freedom of movement. Starmer has also previously insisted he could not foresee any circumstances where the UK rejoined within his lifetime.

However, several ministers favouring closer EU links are thought to be part of a group who would like to see the government go further.

Key Recommendations for the EU Negotiations

According to a document setting out a “corporate blueprint for the EU reset”, the business group 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 one small manufacturing firm in Greater Manchester.

The BCC outlined several main recommendations for talks with Brussels in 2026, including:

• An agreement to reduce inspections on animal and plant products.
• Finalising linkages between the UK and EU’s carbon markets.
• Creating a scheme for young people to work and travel.
• Gaining British involvement in the EU’s defence fund.
• Improving collaboration on VAT and customs simplification.

An official representative said: “This government is removing red tape and trade barriers to boost employment, companies, and the economy. This is precisely the reason we renewed our partnership with the EU and are making strong progress in negotiations.”