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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 finding it tougher to do business under the existing post-Brexit trade deal.

Mounting Business Dissatisfaction 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 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 small and medium-sized companies – said the trade deal enacted in 2021 was failing to assist.

“With a budget that failed to deliver meaningful growth or trade support, securing a successful EU reset is now a business-critical need, not a matter of political preference,” said the BCC’s director of international trade.

Pointing to a continuing economic cost from Brexit, the trade body noted this figure represented a 13 percentage point increase 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 comprehensive.

Calls for Action for a Closer Partnership

The intervention by the trade body – which represents more than 50,000 firms – comes amid increasing awareness within the government's senior ranks about the damage of Brexit. Recently, a senior Labour figure became the latest top Labour politician to advocate for closer economic ties with the EU, in remarks interpreted as a suggestion that Britain could enter into a customs arrangement.

This kind of proposal would clash with 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 re-entered the EU in 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 2026 Reset

According to a document setting out a “corporate blueprint for the EU reset”, the BCC said the government must focus its work 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 navigate changes in EU and UK laws since Brexit.

“Our overseas sales since leaving the EU have all but ceased. The TCA has had zero effect in recovering any sales into the EU,” said a manufacturer in Greater Manchester.

The BCC outlined five key proposals for talks with Brussels in 2026, including:

• A deal to reduce inspections on animal and plant products.
• Finalising linkages between the UK and EU’s carbon markets.
• Establishing a youth mobility scheme.
• Securing full UK participation in the EU’s defence fund.
• Improving collaboration on VAT and customs simplification.

An official representative said: “This government is removing red tape and obstacles to trade to support jobs, business, and growth. That’s exactly why we renewed our partnership with the EU and are making significant headway in negotiations.”