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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 existing post-Brexit trade deal.

Growing Business Dissatisfaction with Post-Brexit Arrangements

Calling on Labour to accelerate its reset with Brussels, the British Chambers of Commerce stated that the UK’s existing trade and cooperation agreement was failing to help 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 enacted in 2021 was failing to assist.

“With a budget that failed to deliver substantial economic expansion or trade support, getting the EU reset right is now a business-critical need, not a political choice,” said the BCC’s director of international trade.

Pointing to a continuing economic cost from Brexit, the business group 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 a tiny fraction of the businesses surveyed believed government support on navigating new trade rules was comprehensive.

Calls for Action for a Deeper Relationship

This statement from the business group – which speaks for tens of thousands of companies – coincides with increasing awareness within the government's senior ranks about the economic impact of leaving the EU. 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 join a customs union.

This kind of proposal would contradict 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.

However, several pro-European ministers are believed to be among those 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 business group 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 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 recovering any sales 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 reduce inspections on animal and plant products.
• Finalising linkages 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 security and defence fund.
• Enhancing cooperation on tax and border simplification.

A government spokesperson said: “This government is cutting bureaucracy and obstacles to trade to boost employment, companies, and the economy. That’s exactly why we renewed our partnership with the EU and are making significant headway in negotiations.”