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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 companies in Britain, as a growing number of exporters report greater difficulty to operate under the existing post-Brexit trade deal.

Mounting Business Dissatisfaction with Post-Brexit Arrangements

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. 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 enacted in 2021 was not helping them.

“With a budget that failed 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 the BCC’s director of international trade.

Pointing to a continuing economic cost from Brexit, the business group noted this figure represented a significant rise from the proportion of unhappy firms in a comparable poll 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 speaks for tens of thousands of companies – coincides with growing recognition within the government's senior ranks 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 enter into a customs arrangement.

Such an arrangement would clash with Labour’s manifesto, which promised “no going back” to the EU internal market, customs bloc, or free movement. The Prime Minister has previously insisted he could not foresee a situation where the UK rejoined within his lifetime.

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

Key Recommendations for the EU Negotiations

According to a document setting out a “corporate blueprint for the EU reset”, the business group said the government must focus its work to minimise trade friction for exporters to help boost the UK economy. Citing comments from annoyed businesses, 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 all but ceased. The TCA has had no impact in winning back any business into the EU,” said a manufacturer in Greater Manchester.

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 emissions trading schemes.
• Establishing a youth mobility scheme.
• Securing full UK participation in the EU’s defence fund.
• Improving collaboration on tax and border simplification.

A government spokesperson said: “We are removing red tape and obstacles to trade to support jobs, business, and growth. That’s exactly why we reset our relationship with the EU and are making significant headway in negotiations.”