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Sir Keir Starmer is to agree a “comprehensive” deal enabling young people to study and work in the UK and EU as part of next year’s “reset” talks aimed at easing barriers of trade, a leading UK business lobby group.
The call by the British Chambers of Commerce puts it at odds with the Labor government, which has repeatedly rejected signing such an agreement, despite EU negotiators making it clear that it would be an essential part of any agreement to improve trade relations.
A “youth activity” deal is one of 13 recommendations from a BCC report how to fix the UK-EU Trade and Cooperation Agreement. Both sides agreed in December 2020 that when Britain leaves the EU, it will lead more than 16,000 small businesses to completely stop trading with the bloc, according to analysis published this month by the London School of Economics.
Other requests include more flexibility for business travelers, a VAT co-operation pact, linking the EU and UK’s carbon trading schemes and joining a pan-European trade agreement on matter, known as the Pan-Euro-Mediterranean or “PEM” convention.
BCC director-general Shevaun Haviland said that while ministers have talked a lot about resetting trade relations with the EU, they now need to take concrete actions to boost trade and provide the their promise to promote economic growth.
“Our model shows that if exports grew 1 percent in 2024, compared to our forecast of a 2 percent contraction, then the economy could grow up to 1.7 percent instead of 0.8 percent. That’s a big difference,” he said.
“We need to see a smart and flexible approach to these negotiations. Our businesses are clear about what they want to see, less paperwork and bureaucracy, more flexibility in business travel and a balance method of youth mobility between the UK and the EU,” he said.
The demands from the BCC, which speaks for 53 chambers of commerce across the country, are far more ambitious than the prime minister’s current plans for a “reset”.
Although Labor promised in its election manifesto to “break down barriers to trade” in Europe, that goal was limited by a pledge not to rejoin the EU single market, customs union or return to free movement of people.
The ministers therefore limited the trade elements of the reset to three areas outlined in the manifesto: an agreement to ease visas for musicians, improved recognition of professional qualifications and a so-called veterinary agreement to ease border frictions for EU-UK trade in food. and plant products.
The negotiations, which are expected to start in mid-2025, are already shaping up to be difficult. The EU has previously ruled out a deal with musicians, demanding the politically sensitive “dynamic alignment” of EU rules for a veterinary deal and warning that no deal will be done without early approvals. concession of fishing rights in UK coastal waters.
But Haviland warned that the problems created by Brexit have not eased four years after the TCA came into force and in many areas “are getting worse” as a result of continued divergence between EU regulations and UK.
The BCC report, titled “A manifesto to reset UK-EU trade”, says member businesses continue to report that Brexit red tape covering customs, VAT and other burdens on regulation hinders their growth.
“Four years from the TCA negotiations, 40 percent of exporters actively ‘disagree’ that it helps them grow,” the report said, citing a membership survey conducted in summer 2024.
The survey also warns of the challenges of future EU regulations, such as the charging of carbon border taxes from January 2026, all of which will increase the bureaucratic burdens of trade.
“The awareness of future changes in trade rules and regulations made either in the UK or the EU is also alarmingly low, with more than three quarters of companies without knowledge of details of most laws,” the report said.
The government said it was “resetting relations with our European friends to strengthen ties, secure a broad security pact and tackle trade barriers.
“We are clear that there will be no return to the customs union, the single market or freedom of movement.”
Data visualization by Amy Borrett