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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 operate under the UK’s post-Brexit agreement.

Mounting Business Dissatisfaction with Current Deal

Urging the government to hasten its EU relationship reset, the British Chambers of Commerce stated that the UK’s existing trade and cooperation agreement was not supporting them grow their sales in the EU. More than half of exporters in a poll of nearly one thousand firms – most of whom were small and medium-sized companies – said the trade deal negotiated by Boris Johnson’s government was not helping them.

“With a budget that failed to deliver meaningful growth or trade support, getting the EU reset right is now a business-critical need, not a matter of political preference,” said Steve Lynch.

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 similar survey a year earlier. It added that just four out of the 946 firms surveyed believed government support on trade policy changes was comprehensive.

Political Pressure for a Closer Partnership

This statement from the business group – which represents more than 50,000 firms – coincides with growing recognition within Labour’s frontbench about the economic impact of leaving the EU. Recently, Wes Streeting became the latest top Labour politician to call for a deeper trading relationship with the EU, in remarks seen as hinting that Britain could enter into a customs arrangement.

Such an arrangement would contradict Labour’s manifesto, which promised “no going back” to the EU single market, customs union, or freedom of movement. Starmer has also previously insisted he could not foresee a situation where the UK rejoined within his lifetime.

Nevertheless, several pro-European ministers are thought to be part of a group who would like to see the government go further.

Business Proposals for the 2026 Reset

In a report setting out a “business manifesto for the EU reset”, the business group said the government must focus its work to reduce barriers to trade for exporters to support growth in 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 a manufacturer in the North West.

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

• A deal to reduce inspections on agri-food goods.
• Finalising linkages between the UK and EU’s emissions trading schemes.
• Establishing a youth mobility scheme.
• Gaining British involvement in the EU’s defence fund.
• Enhancing cooperation on VAT and customs simplification.

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