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The Labour administration has been advised that forging a closer trade deal with the European Union is a "critical imperative" for companies in Britain, as an increasing proportion of exporters report greater difficulty to do business under the UK’s post-Brexit agreement.

Growing Exporter Frustration with Post-Brexit Arrangements

Calling on Labour to accelerate its reset with Brussels, the British Chambers of Commerce stated that the UK’s existing trade and cooperation agreement was not supporting them increase exports in the EU. Over 50% of exporters in a survey of almost 1,000 businesses – the majority of which were SME 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, securing a successful EU reset 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 significant rise from the proportion of unhappy firms 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.

Calls for Action for a Deeper Relationship

This statement from the business group – which speaks for tens of thousands of companies – coincides with growing recognition within Labour’s frontbench about the economic impact of leaving the EU. Recently, Wes Streeting became the most recent cabinet minister to advocate for closer economic ties with the EU, in remarks seen as hinting that Britain could join a customs union.

This kind of proposal would contradict Labour’s manifesto, which promised “no return” to the EU internal market, customs bloc, or free movement. The Prime Minister has stated in the past he could not foresee a situation where the UK rejoined within his lifetime.

However, several pro-European ministers are believed to be among those who would like to see the government go further.

Business Proposals for the EU Negotiations

In a report setting out a “corporate blueprint for the EU reset”, the BCC 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 increasingly difficult to adapt to new rules in EU and UK laws since Brexit.

“Since Brexit our export sales have all but ceased. The TCA has had zero effect in winning back any business 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:

• A deal to cut border checks on agri-food goods.
• Finalising linkages 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 security and defence fund.
• Enhancing cooperation on VAT and customs simplification.

A government spokesperson said: “We are cutting bureaucracy and trade barriers to boost employment, companies, and the economy. That’s exactly why we reset our relationship with the EU and are making strong progress in negotiations.”