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Keir Starmer's government has been told that forging a closer trade deal with the European Union is a "strategic necessity" for companies in Britain, as a growing number of exporters report finding it tougher to operate under the UK’s post-Brexit agreement.

Growing Business Dissatisfaction with Current Deal

Urging the government to hasten its reset with Brussels, the leading business group stated that the UK’s existing trade and cooperation agreement was failing to help them grow their sales in the EU. Over 50% of exporters in a survey of almost 1,000 businesses – the majority of which were SME companies – said the trade deal negotiated by Boris Johnson’s government was not helping them.

“Following a budget that did not to deliver meaningful growth or trade support, securing a successful EU reset is now a business-critical need, not a matter of political preference,” said Steve Lynch.

Highlighting an ongoing economic hit from Brexit, the business group noted this figure represented a 13 percentage point increase from the proportion of unhappy firms 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 Closer Partnership

This statement from the business group – which speaks for tens of thousands of companies – comes amid increasing awareness within the government's senior ranks about the damage of Brexit. Recently, a senior Labour figure became the most recent cabinet minister to advocate for closer economic ties with the EU, in remarks seen as hinting that Britain could enter into a customs arrangement.

This kind of proposal would contradict Labour’s manifesto, which promised “no going back” to the EU internal market, customs bloc, or free movement. Starmer has also previously insisted 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.

Key Recommendations for the 2026 Reset

In a report setting out a “business manifesto for the EU reset”, the business group said the government must focus its work to reduce barriers to trade for exporters to help boost the UK economy. Citing comments from annoyed businesses, it said firms were finding it ever harder to adapt to new rules in EU and UK laws since Brexit.

“Our overseas sales since leaving the EU have all but ceased. The TCA has had zero effect in recovering any sales 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 cut border checks on animal and plant products.
• Completing connections between the UK and EU’s emissions trading schemes.
• Creating a youth mobility scheme.
• Gaining British involvement in the EU’s defence fund.
• Improving collaboration on VAT and customs simplification.

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