Keir Starmer told closer EU trade ties ‘strategic necessity’ for UK firms | Trade policy

Keir Starmer’s government has been told a closer EU trade deal is a “strategic necessity” for companies in Britain as growing numbers of exporters find it tougher to do business under the UK’s post-Brexit agreement.

Calling on Labour to accelerate its reset with Brussels, the British Chambers of Commerce (BCC) said the UK’s existing trade and cooperation agreement (TCA) was failing to help them grow their sales in the EU.

More than half (54%) of exporters in a survey of almost 1,000 businesses – the majority of which were small and medium-sized firms – said the trade deal negotiated by Boris Johnson’s government and enacted in 2021 was not helping them.

Highlighting an ongoing economic hit from Brexit, the BCC said this was a 13 percentage point increase from the proportion of firms that were unhappy in a similar survey a year earlier.

Adding to pressure on Labour to take action to support the economy after a challenging year for businesses, it said that just four out of the 946 firms surveyed thought the support from the government on dealing with trade policy changes was comprehensive.

Steve Lynch, the BCC’s director of international trade, said: “With a budget that failed to deliver meaningful growth or trade support, getting the EU reset right is now a strategic necessity, not a political choice.

“Trade is the fastest route to growth, yet firms tell us it is becoming harder, not easier, to sell into our largest market.”

The intervention by the trade body – which represents more than 50,000 firms employing 6 million people nationwide – comes amid growing recognition among Labour’s frontbench over the damage of Brexit.

At the weekend, Wes Streeting became the latest top Labour politician to call for a deeper trading relationship with the EU, in remarks interpreted as a suggestion that Britain could join a customs union with the EU.

Such an arrangement would clash with 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 see any circumstances where the UK rejoined within his lifetime.

However, several pro-European ministers – including Streeting, David Lammy, Peter Kyle, Liz Kendall, Bridget Phillipson – are believed to be among those who would like to see the government go further.

It comes as ministers position efforts to “reset” EU relations – after a landmark summit with Brussels earlier this year – among the government’s top priorities for 2026. Last week Labour announced it had agreed terms for the UK to join the Erasmus+ EU student exchange programme in 2027.

In a report setting out a “business manifesto for the EU reset”, the BCC said the government needed to 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 increasingly difficult to navigate changes to EU and UK laws since the first post-Brexit trade deal was introduced in 2020.

“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.

Drawing a link to Labour’s tax-raising budgets, a small retailer in Hampshire said: “Work has stopped coming to [the] UK due to high taxes and no longer being part of the EU. As a result, lots of companies have shut down and thousands of people have lost their jobs and been out of work for over two years.”

The BCC said it had made five key proposals for talks with Brussels in 2026. This includes a deal to cut border checks on animal and plant products, finalising linkages between the UK and EU’s emissions trading schemes, establishing a youth mobility scheme, securing full UK participation to SAFE – the EU’s defence fund – and enhancing cooperation on VAT and customs simplification.

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