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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 British firms, as an increasing proportion of exporters report greater difficulty to do business under the UK’s post-Brexit agreement.

Growing Exporter Frustration 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. 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 negotiated by Boris Johnson’s government was failing to assist.

“Following a budget that did not to deliver substantial economic expansion or trade support, getting the EU reset right is now a strategic necessity, not a political choice,” said Steve Lynch.

Pointing to a continuing economic cost from Brexit, the business group noted this figure represented a 13 percentage point increase from the proportion of unhappy firms in a comparable poll a year earlier. It added that just four out of the 946 firms surveyed believed government support on navigating new trade rules was adequate.

Political Pressure for a Closer Partnership

This statement from the business group – which represents more than 50,000 firms – coincides with growing recognition within Labour’s frontbench about the economic impact of leaving the EU. Recently, Wes Streeting became the most recent cabinet minister to call for a deeper trading relationship with the EU, in remarks interpreted as a suggestion that Britain could join a customs union.

Such an arrangement would clash with Labour’s manifesto, which promised “no going back” to the EU internal market, customs bloc, or free movement. Starmer has also previously insisted he could not foresee a situation where the UK re-entered the EU in his lifetime.

However, several pro-European ministers are believed to be among those who would like to see the government go further.

Business Proposals for the 2026 Reset

In a report setting out a “business manifesto for the EU reset”, the BCC said the government must prioritise its efforts to reduce barriers to trade for exporters to help boost the UK economy. Quoting frustrated survey respondents, it said firms were finding it increasingly difficult 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 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:

• 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.
• Gaining British involvement in the EU’s security and defence fund.
• Improving collaboration on VAT and customs simplification.

A government spokesperson said: “This government is cutting bureaucracy and obstacles to trade to support jobs, business, and growth. This is precisely the reason we reset our relationship with the EU and are making significant headway in negotiations.”