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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 finding it tougher to operate under the existing post-Brexit trade deal.

Mounting Exporter Frustration with Current Deal

Urging the government to hasten its EU relationship reset, the leading business group stated that the UK’s existing trade and cooperation agreement was not supporting them grow their sales in the EU. More than half 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 matter of political preference,” said Steve Lynch.

Pointing to a continuing economic cost from Brexit, the business group noted this figure represented a significant rise 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 Closer Partnership

The intervention by the trade body – which represents more than 50,000 firms – comes amid increasing awareness within Labour’s frontbench about the damage of Brexit. Recently, Wes Streeting became the most recent cabinet minister to call for a deeper trading relationship with the EU, in remarks seen as hinting that Britain could join a customs union.

Such an arrangement would contradict 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 any circumstances where the UK rejoined within his lifetime.

However, 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

In a report setting out a “corporate blueprint for the EU reset”, the BCC said the government must prioritise its efforts to reduce barriers to trade 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 virtually stopped. The TCA has had no impact in recovering any sales into the EU,” said a manufacturer in the North West.

The BCC outlined five key proposals for talks with Brussels in 2026, including:

• A deal to reduce inspections on agri-food goods.
• Completing connections between the UK and EU’s carbon markets.
• Creating a scheme for young people to work and travel.
• Gaining British involvement in the EU’s defence fund.
• Enhancing cooperation on VAT and customs 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.”