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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 British firms, as a growing number of exporters report greater difficulty to do business under the UK’s post-Brexit agreement.

Mounting Exporter Frustration with Post-Brexit Arrangements

Urging the government to hasten its EU relationship reset, the British Chambers of Commerce 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 poll of nearly one thousand firms – most of whom 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, getting the EU reset right 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 13 percentage point increase from the proportion of unhappy firms in a similar survey a year earlier. It added that just four out of the 946 firms surveyed believed government support on navigating new trade rules 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 the government's senior ranks about the damage of Brexit. Recently, a senior Labour figure became the latest top Labour politician to call for a deeper trading relationship 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. Starmer has also previously insisted he could not foresee any circumstances where the UK re-entered the EU in his lifetime.

Nevertheless, several ministers favouring closer EU links are believed to be among those who would like to see the government go further.

Key Recommendations for the EU Negotiations

In a report setting out a “business manifesto 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.

“Our overseas sales since leaving the EU have all but ceased. The TCA has had zero effect in winning back any business into the EU,” said a manufacturer in Greater Manchester.

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

• A deal to reduce inspections on animal and plant products.
• Completing connections between the UK and EU’s carbon markets.
• Creating a scheme for young people to work and travel.
• Securing full UK participation in the EU’s security and defence fund.
• Enhancing cooperation on tax and border simplification.

A government spokesperson said: “We are cutting bureaucracy and trade barriers to boost employment, companies, and the economy. That’s exactly why we renewed our partnership with the EU and are making strong progress in negotiations.”