Keir Starmer Informed Closer EU Trade Ties Are a 'Critical Imperative' for UK Firms

The Labour administration has been advised that securing a deeper trading relationship with the European Union is a "critical imperative" for British firms, as an increasing proportion of exporters report greater difficulty to operate under the existing post-Brexit trade deal.

Growing Exporter Frustration with Post-Brexit Arrangements

Calling on Labour to accelerate its EU relationship reset, the British Chambers of Commerce 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.

“Following a budget that did not to deliver substantial economic expansion or trade support, getting the EU reset right is now a strategic necessity, not a political choice,” said the BCC’s director of international trade.

Highlighting an ongoing economic hit from Brexit, the trade body noted this figure represented a 13 percentage point increase 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 navigating new trade rules was adequate.

Political Pressure for a Closer Partnership

The intervention by the trade body – which represents more than 50,000 firms – comes amid increasing awareness within Labour’s frontbench about the economic impact of leaving the EU. 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 clash with Labour’s manifesto, which promised “no going back” 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 rejoined within his lifetime.

Nevertheless, several ministers favouring closer EU links are thought to be part of a group who would prefer the administration to take more ambitious steps.

Key Recommendations for the EU Negotiations

In a report setting out a “business manifesto for the EU reset”, the BCC said the government must prioritise its efforts to minimise trade friction for exporters to support growth in the UK economy. Quoting frustrated survey respondents, 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 no impact in recovering any sales into the EU,” said a manufacturer in Greater Manchester.

The BCC outlined five key proposals for negotiations with the EU in 2026, including:

• A deal to cut border checks on agri-food goods.
• Completing connections 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: “We are 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 significant headway in negotiations.”