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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 companies in Britain, as a growing number of exporters report greater difficulty to do business under the UK’s post-Brexit agreement.

Mounting Business Dissatisfaction with Post-Brexit Arrangements

Urging the government to hasten its reset with Brussels, 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 – the majority of which were SME companies – said the trade deal enacted in 2021 was failing to assist.

“Following a budget that did not to deliver meaningful growth 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.

Pointing to a continuing economic cost from Brexit, the trade body noted this figure represented a significant rise from the proportion of unhappy firms in a similar survey a year earlier. It added that just a tiny fraction of the businesses surveyed believed government support on navigating new trade rules was adequate.

Political Pressure for a Deeper Relationship

This statement from the business group – which speaks for tens of thousands of companies – coincides with increasing awareness within Labour’s frontbench about the damage of Brexit. Recently, a senior Labour figure became the latest top Labour politician to call for a deeper trading relationship with the EU, in remarks interpreted as a suggestion that Britain could enter into a customs arrangement.

Such an arrangement would clash with Labour’s manifesto, which promised “no going back” to the EU internal market, customs bloc, or free movement. The Prime Minister has previously insisted he could not foresee a situation where the UK rejoined within his lifetime.

However, several ministers favouring closer EU links are thought to be part of a group who would prefer the administration to take more ambitious steps.

Business Proposals for the EU Negotiations

In a report setting out a “corporate blueprint 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 virtually stopped. The TCA has had zero effect in recovering any sales into the EU,” said a manufacturer 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 emissions trading schemes.
• Creating a youth mobility scheme.
• Gaining British involvement in the EU’s security and defence fund.
• Enhancing cooperation on tax and border simplification.

A government spokesperson said: “This government is removing red tape and trade barriers to boost employment, companies, and the economy. This is precisely the reason we reset our relationship with the EU and are making strong progress in negotiations.”