Keir Starmer Informed Stronger EU Trade Ties Are a 'Strategic Necessity' for UK Companies

The Labour administration has been advised that securing a deeper trading relationship with the European Union is a "critical imperative" for British firms, as a growing number of exporters report finding it tougher to operate under the existing post-Brexit trade deal.

Mounting Business Dissatisfaction with Current Deal

Calling on Labour to accelerate its reset with Brussels, the leading business group 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 failing to assist.

“With a budget that failed 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.

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 comparable poll a year earlier. It added that just a tiny fraction of the businesses surveyed believed government support on trade policy changes was adequate.

Political Pressure for a Closer Partnership

This statement from the business group – which represents more than 50,000 firms – comes amid growing recognition within Labour’s frontbench about the economic impact of leaving the EU. Recently, a senior Labour figure 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 clash with Labour’s manifesto, which promised “no return” to the EU internal market, customs bloc, or free 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 believed to be among those who would prefer the administration to take more ambitious steps.

Business Proposals for the 2026 Reset

In a report setting out a “business manifesto 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. 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 recovering any sales into the EU,” said one small manufacturing firm in the North West.

The BCC outlined several main recommendations for negotiations with the EU in 2026, including:

• An agreement to cut border checks on animal and plant products.
• Completing connections between the UK and EU’s carbon markets.
• Creating a scheme for young people to work and travel.
• Securing full UK participation in the EU’s defence fund.
• Improving collaboration on tax and border simplification.

An official representative said: “We are cutting bureaucracy 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 strong progress in negotiations.”