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The Labour administration has been advised that forging a closer trade deal with the European Union is a "critical imperative" for companies in Britain, 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

Calling on Labour to accelerate its EU relationship reset, the leading business group stated that the UK’s existing trade and cooperation agreement was not supporting them increase exports in the EU. More than half 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 failing to assist.

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

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 similar survey 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

The intervention by the trade body – which represents more than 50,000 firms – coincides with growing recognition within the government's senior ranks 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 clash with Labour’s manifesto, which promised “no return” 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 re-entered the EU in his lifetime.

Nevertheless, several pro-European ministers are thought to be part of a group who would prefer the administration to take more ambitious steps.

Key Recommendations for the 2026 Reset

In a report setting out a “business manifesto for the EU reset”, the BCC said the government must focus its work to reduce barriers to trade for exporters to support growth in the UK economy. Quoting frustrated survey respondents, it said firms were finding it ever harder to navigate changes in EU and UK laws since Brexit.

“Since Brexit our export sales have all but ceased. The TCA has had zero effect 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:

• An agreement to cut border checks on animal and plant products.
• Finalising linkages between the UK and EU’s emissions trading schemes.
• Creating a youth mobility scheme.
• Securing full UK participation in the EU’s security and defence fund.
• Enhancing cooperation on VAT and customs simplification.

A government spokesperson said: “We are cutting bureaucracy and trade barriers to support jobs, business, and growth. This is precisely the reason we reset our relationship with the EU and are making significant headway in negotiations.”