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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 operate under the UK’s post-Brexit agreement.

Mounting Business Dissatisfaction with Post-Brexit Arrangements

Urging the government to hasten its EU relationship reset, the British Chambers of Commerce stated that the UK’s current TCA was not supporting them grow their sales in the EU. More than half of exporters in a survey of almost 1,000 businesses – most of whom were SME 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, securing a successful EU reset is now a business-critical need, not a political choice,” 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 dissatisfied companies 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 adequate.

Calls for Action for a Closer Partnership

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 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.

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 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 2026 Reset

According to a document setting out a “business manifesto for the EU reset”, the BCC said the government must focus its work to minimise trade friction for exporters to support growth in the UK economy. Citing comments from annoyed businesses, it said firms were finding it ever harder to navigate changes in EU and UK laws since Brexit.

“Our overseas sales since leaving the EU have virtually stopped. The TCA has had no impact in winning back any business into the EU,” said a manufacturer in the North West.

The BCC outlined five key proposals for negotiations with the EU in 2026, including:

• A deal to cut border checks on agri-food goods.
• Completing connections between the UK and EU’s carbon markets.
• 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. That’s exactly why we reset our relationship with the EU and are making strong progress in negotiations.”