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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 greater difficulty to do business under the existing post-Brexit trade deal.

Growing Exporter Frustration with Current Deal

Urging the government to hasten its EU relationship reset, the leading business group stated that the UK’s current TCA was not supporting them grow their sales in the EU. Over 50% of exporters in a survey of almost 1,000 businesses – most of whom were SME companies – said the trade deal negotiated by Boris Johnson’s government was not helping them.

“Following a budget that did not to deliver meaningful growth or trade support, securing a successful EU reset is now a strategic necessity, not a matter of political preference,” 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 dissatisfied companies in a comparable poll a year earlier. It added that just four out of the 946 firms surveyed believed government support on trade policy changes was comprehensive.

Political Pressure for a Closer Partnership

This statement from the business group – which speaks for tens of thousands of companies – coincides with increasing awareness 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 interpreted as a suggestion 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. The Prime Minister has previously insisted he could not foresee any circumstances where the UK re-entered the EU in his lifetime.

Nevertheless, several pro-European ministers are thought to be part of a group who would like to see the government go further.

Business Proposals for the EU Negotiations

According to a document 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. Citing comments from annoyed businesses, 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 winning back any business into the EU,” said a manufacturer in the North West.

The BCC outlined five key proposals for negotiations with the EU in 2026, including:

• A deal to cut border checks on animal and plant products.
• Completing connections between the UK and EU’s carbon markets.
• Establishing a youth mobility scheme.
• Gaining British involvement in the EU’s defence fund.
• Improving collaboration 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. This is precisely the reason we reset our relationship with the EU and are making significant headway in negotiations.”