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The Labour administration has been advised that securing a deeper trading relationship with the European Union is a "strategic necessity" for companies in Britain, as an increasing proportion of exporters report greater difficulty to do business under the existing post-Brexit trade deal.

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 existing trade and cooperation agreement was not supporting them grow their sales in the EU. Over 50% of exporters in a survey of almost 1,000 businesses – the majority of which were small and medium-sized 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 business-critical need, 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 trade policy changes was comprehensive.

Calls for Action for a Deeper Relationship

This statement from the business group – which speaks for tens of thousands of companies – comes amid increasing awareness within the government's senior ranks about the damage of Brexit. 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.

This kind of proposal 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 any circumstances where the UK re-entered the EU in his lifetime.

Nevertheless, several pro-European ministers are believed to be among those who would prefer the administration to take more ambitious steps.

Business Proposals for the EU Negotiations

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 ever harder to adapt to new rules in EU and UK laws since Brexit.

“Our overseas sales since leaving the EU have virtually stopped. The TCA has had zero effect in winning back any business into the EU,” said one small manufacturing firm in the North West.

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 carbon markets.
• Establishing a scheme for young people to work and travel.
• Securing full UK participation in the EU’s security and defence fund.
• Improving collaboration on VAT and customs simplification.

An official representative said: “This government is cutting bureaucracy and obstacles to trade to boost employment, companies, and the economy. This is precisely the reason we reset our relationship with the EU and are making significant headway in negotiations.”