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A growing number of British exporters are expressing dissatisfaction with EU-UK trading arrangements, a leading business survey has found, adding to calls for Sir Keir Starmer to be more ambitious in his “reset” with Brussels.
Some 53 per cent of UK exporters told the British Chambers of Commerce that the trade deal with Europe was unsatisfactory — a 13 percentage point increase from 2024.
By contrast, just 16 per cent of nearly 900 exporters surveyed in October said the EU-UK Trade and Cooperation Agreement signed by former UK prime minister Boris Johnson in 2021 was working well.
The findings come as Starmer faces growing pressure from sections of his own party to enter a customs union with the bloc to boost the UK’s flagging trade performance, which has stagnated since Brexit.
Wes Streeting, one of the frontrunners to be next Labour leader, has in recent days hinted that Britain should join a customs union with Europe, interpreted by some as a challenge to Starmer’s authority.
Starmer has said that joining a customs union is a “clear red line” for his government that would cause recent trade deals with the US and India to unravel.
But Streeting said that Britain had taken a “massive economic hit” from Brexit, with the main damage caused by quitting the single market and customs union.
“The best way for us to get more growth into our economy is a deeper trading relationship with the EU,” he said in an interview with the Observer newspaper on Sunday.
A poll by YouGov for The Times found that 80 per cent of those who supported Labour at the last general election thought a new leader should negotiate a customs union deal with the EU. The policy is supported by 78 per cent of Liberal Democrat voters and 39 per cent of those who voted Conservative.
Steve Lynch, director of international trade at the British Chambers of Commerce, said his organisation’s survey confirmed the need for deeper co-operation with Europe, including improved dialogues on regulatory issues that were the chief bugbear of exporters.
“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,” he said.
“Businesses do not want a future with the EU where they constantly have to manage friction and are beset with recurring crises. They want a mature, stable relationship that underpins trade, investment and security,” Lynch added.
Starmer’s government has committed to a limited trade “reset” with Brussels based around a deal to remove border checks on food and drink exports and relinking the EU and UK carbon markets, but has ruled out deeper engagement including a customs union or rejoining the EU single market.
Former Conservative deputy prime minister Sir David Lidington said the BCC survey offered a “sobering” analysis of the impact of Brexit on British businesses, adding that the progress of the EU-UK “reset” was “dismaying”, with fault on both sides.
“When the BCC reports half of our exporters saying that they are struggling with Brexit red tape and obstacles to trade, and that the Trade and Cooperation Agreement is not enabling them to grow, alarm bells should be clanging in Downing Street and Whitehall,” he wrote.
The independent Office for Budget Responsibility said at November’s budget that Starmer’s ‘reset’ would lead to just a 0.24 per cent long-term increase to GDP, only a small fraction of the 4 per cent hit to GDP that economists estimate Brexit has caused.
The OBR also forecast that the share of UK GDP from trade — so-called “trade intensity” — would shrink between now and 2030 as a result of ongoing Brexit impacts and new barriers to trade being erected by US President Donald Trump’s protectionist tariff policies.
The UK and the EU announced earlier this month that they would seek to finalise their ‘reset’ deals on food checks and carbon pricing, alongside a youth mobility agreement, by the next EU-UK summit which is due in the second half of 2026.
The BCC survey found that five years after the TCA came into force, the introduction of new Brussels regulations meant businesses were finding it harder to trade.
Chief among business complaints in the BCC’s 48-page report into the EU-UK “reset” was the introduction of the EU’s new carbon border taxes and the impact of the bloc’s General Product Safety Regulation in 2024.
The report found that GPSR, which requires companies to have an EU-based representative to certify their exports meet EU rules, had “increased cost and complexity”, leading to some exporters giving up on EU trade altogether.
Despite Brexit, the EU remains the UK’s largest trading partner, accounting for more than 40 per cent of exports and more than half of imports, but trade with the bloc has dropped in several sectors since the TCA came into force in January 2021.
Data from the Food and Drink Federation, the industry lobby, showed that the volume of UK food exports to the EU had fallen by more than 23 per cent in the five years since Brexit, compared with the last five years of EU membership.
FDF chief executive Karen Betts said that a so-called EU-UK veterinary agreement to remove border checks would reduce the cost of exporting to the bloc but would still not remove all barriers to trade. “It’s not a silver bullet,” she added.
A government spokesperson said the UK was “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,” they added.
Data visualisation by Amy Borrett, additional reporting by Jim Pickard