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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 an increasing proportion of exporters report greater difficulty to do business under the existing post-Brexit trade deal.

Growing Exporter Frustration with Post-Brexit Arrangements

Calling on Labour to accelerate 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. More than half of exporters in a survey of almost 1,000 businesses – 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 meaningful growth or trade support, securing a successful EU reset is now a strategic necessity, 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 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.

Calls for Action for a Closer Partnership

The intervention by the trade body – which speaks for tens of thousands of companies – comes amid growing recognition within Labour’s frontbench about the damage of Brexit. Recently, a senior Labour figure became the most recent cabinet minister to advocate for closer economic ties with the EU, in remarks seen as hinting 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. Starmer has also previously insisted he could not foresee a situation where the UK re-entered the EU in his lifetime.

Nevertheless, several pro-European ministers are believed to be among those who would prefer the administration to take more ambitious steps.

Key Recommendations for the EU Negotiations

In a report setting out a “corporate blueprint 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. Quoting frustrated survey respondents, 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 virtually stopped. The TCA has had no impact in recovering any sales into the EU,” said one small manufacturing firm in Greater Manchester.

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

• A deal to cut border checks on agri-food goods.
• Completing connections between the UK and EU’s emissions trading schemes.
• Establishing a youth mobility scheme.
• Gaining British involvement in the EU’s defence fund.
• Enhancing cooperation on VAT and customs simplification.

An official representative said: “This government is removing red tape and trade barriers to boost employment, companies, and the economy. This is precisely the reason we renewed our partnership with the EU and are making strong progress in negotiations.”