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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 operate under the existing post-Brexit trade deal.

Mounting Business Dissatisfaction with Current Deal

Urging the government to hasten its EU relationship reset, the leading business group stated that the UK’s existing trade and cooperation agreement was failing to help them increase exports 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 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 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 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 adequate.

Political Pressure for a Deeper Relationship

This statement from the business group – which represents more than 50,000 firms – coincides with growing recognition within Labour’s frontbench about the damage of Brexit. Recently, Wes Streeting became the latest top Labour politician 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 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 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 2026 Reset

According to a document setting out a “corporate blueprint for the EU reset”, the business group said the government must prioritise its efforts to reduce barriers to trade for exporters to support growth in 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.

“Since Brexit our export sales have virtually stopped. The TCA has had no impact in winning back any business into the EU,” said one small manufacturing firm in the North West.

The BCC outlined five key proposals for talks with Brussels in 2026, including:

• An agreement to cut border checks on agri-food goods.
• Finalising linkages between the UK and EU’s emissions trading schemes.
• Creating a youth mobility scheme.
• Securing full UK participation in the EU’s defence fund.
• Improving collaboration on tax and border simplification.

An official representative said: “This government is removing red tape and trade barriers to support jobs, business, and growth. That’s exactly why we reset our relationship with the EU and are making significant headway in negotiations.”