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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 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 EU relationship reset, the British Chambers of Commerce stated that the UK’s current TCA was not supporting them grow their sales in the EU. Over 50% of exporters in a poll of nearly one thousand firms – the majority of which were SME companies – said the trade deal negotiated by Boris Johnson’s government was failing to assist.

“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 Steve Lynch.

Pointing to a continuing economic cost from Brexit, the business group noted this figure represented a 13 percentage point increase 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 adequate.

Political Pressure for a Closer Partnership

The intervention by the trade body – which speaks for tens of thousands of companies – comes amid increasing awareness within the government's senior ranks about the economic impact of leaving the EU. Recently, a senior Labour figure 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.

Such an arrangement would contradict Labour’s manifesto, which promised “no going back” to the EU single market, customs union, or freedom of movement. Starmer has also stated in the past he could not foresee any circumstances where the UK re-entered the EU in his lifetime.

However, several ministers favouring closer EU links are thought to be part of a group who would like to see the government go further.

Business Proposals for the EU Negotiations

In a report setting out a “corporate blueprint for the EU reset”, the business group said the government must prioritise its efforts to minimise trade friction for exporters to support growth in 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.

“Since Brexit our export sales have all but ceased. The TCA has had no impact in recovering any sales into the EU,” said one small manufacturing firm in Greater Manchester.

The BCC outlined several main recommendations for talks with Brussels in 2026, including:

• A deal to cut border checks on agri-food goods.
• Finalising linkages between the UK and EU’s carbon markets.
• Creating a youth mobility scheme.
• Securing full UK participation in the EU’s security and defence fund.
• Improving collaboration on tax and border simplification.

An official representative said: “We are 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 strong progress in negotiations.”