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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 finding it tougher to do business under the UK’s post-Brexit agreement.

Mounting Exporter Frustration 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 enacted in 2021 was not helping them.

“Following a budget that did not to deliver meaningful growth or trade support, getting the EU reset right is now a strategic necessity, not a matter of political preference,” said the BCC’s director of international trade.

Highlighting an ongoing economic hit from Brexit, the business group 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 a tiny fraction of the businesses surveyed believed government support on navigating new trade rules was comprehensive.

Calls for Action for a Deeper Relationship

The intervention by the trade body – 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 most recent cabinet minister 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 single market, customs union, or freedom of movement. The Prime Minister has stated in the past 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 prefer the administration to take more ambitious steps.

Business Proposals for the 2026 Reset

According to a document 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 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.

“Since Brexit our export sales have all but ceased. The TCA has had no impact in recovering any sales into the EU,” said a manufacturer in Greater Manchester.

The BCC outlined several main recommendations for negotiations with the EU in 2026, including:

• An agreement to cut border checks on agri-food goods.
• Completing connections between the UK and EU’s emissions trading schemes.
• Creating a scheme for young people to work and travel.
• Securing full UK participation in the EU’s defence fund.
• Improving collaboration on VAT and customs simplification.

A government spokesperson said: “We are 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 strong progress in negotiations.”