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

Growing Business Dissatisfaction with Post-Brexit Arrangements

Calling on Labour to accelerate its EU relationship reset, the leading business group stated that the UK’s current TCA was failing to help them grow their sales in the EU. More than half of exporters in a poll of nearly one thousand firms – the majority of which were SME companies – said the trade deal enacted in 2021 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 the BCC’s director of international trade.

Highlighting an ongoing economic hit 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 Closer Partnership

This statement from the business group – which represents more than 50,000 firms – coincides with increasing awareness within the government's senior ranks about the damage of Brexit. Recently, Wes Streeting became the latest top Labour politician 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. Starmer has also stated in the past he could not foresee a situation where the UK re-entered the EU in his lifetime.

However, several ministers favouring closer EU links are believed to be among those who would prefer the administration to take more ambitious steps.

Business Proposals for the 2026 Reset

In a report setting out a “business manifesto for the EU reset”, the BCC 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 navigate changes in EU and UK laws since Brexit.

“Since Brexit our export sales have all but ceased. 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 five key proposals for talks with Brussels in 2026, including:

• An agreement to reduce inspections on animal and plant products.
• Finalising linkages between the UK and EU’s carbon markets.
• Creating a scheme for young people to work and travel.
• Securing full UK participation in the EU’s defence fund.
• Enhancing cooperation on tax and border simplification.

An official representative said: “This government is removing red tape and trade barriers 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.”