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 finding it tougher to operate under the UK’s post-Brexit agreement.
Mounting Exporter Frustration with Post-Brexit Arrangements
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 grow their sales in the EU. More than half of exporters in a poll of nearly one thousand firms – most of whom were small and medium-sized companies – said the trade deal negotiated by Boris Johnson’s government was not helping them.
“With a budget that failed to deliver meaningful growth or trade support, securing a successful EU reset is now a business-critical need, not a political choice,” 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 dissatisfied companies in a comparable poll a year earlier. It added that just four out of the 946 firms surveyed believed government support on navigating new trade rules was comprehensive.
Calls for Action for a Closer Partnership
This statement from the business group – which represents more than 50,000 firms – comes amid 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 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 believed to be among those who would like to see the government go further.
Business Proposals for the EU Negotiations
According to a document 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. Citing comments from annoyed businesses, it said firms were finding it ever harder to navigate changes in EU and UK laws since Brexit.
“Since Brexit our export sales have virtually stopped. The TCA has had zero effect in winning back any business 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 carbon markets.
- Establishing a youth mobility scheme.
- Gaining British involvement in the EU’s security and defence fund.
- Enhancing cooperation on VAT and customs simplification.
An official representative said: “We are removing red tape and obstacles to trade to support jobs, business, and growth. This is precisely the reason we renewed our partnership with the EU and are making strong progress in negotiations.”
