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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 a growing number of exporters report finding it tougher to operate under the existing post-Brexit trade deal.

Growing Exporter Frustration with Current Deal

Urging the government to hasten 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 – the majority of which were small and medium-sized companies – said the trade deal negotiated by Boris Johnson’s government was not helping them.

“Following a budget that did not to deliver substantial economic expansion or trade support, securing a successful EU reset is now a business-critical need, not a matter of political preference,” said Steve Lynch.

Pointing to a continuing economic cost from Brexit, the trade body noted this figure represented a significant rise from the proportion of dissatisfied companies in a comparable poll a year earlier. It added that just a tiny fraction of the businesses surveyed believed government support on navigating new trade rules was comprehensive.

Political Pressure for a Deeper Relationship

This statement from the business group – which represents more than 50,000 firms – comes amid growing recognition within Labour’s frontbench 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 seen as hinting that Britain could join a customs union.

Such an arrangement would contradict Labour’s manifesto, which promised “no return” 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 rejoined within 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 2026 Reset

According to a document 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 help boost the UK economy. Quoting frustrated survey respondents, it said firms were finding it increasingly difficult to navigate changes in EU and UK laws since Brexit.

“Our overseas sales since leaving the EU have virtually stopped. The TCA has had no impact in winning back any business into the EU,” said a manufacturer in Greater Manchester.

The BCC outlined several main recommendations for negotiations with the EU in 2026, including:

• An agreement to reduce inspections on animal and plant products.
• Completing connections 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.
• Improving collaboration on VAT and customs simplification.

An official representative said: “We are cutting bureaucracy and obstacles to trade to support jobs, business, and growth. That’s exactly why we reset our relationship with the EU and are making strong progress in negotiations.”