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The Labour administration has been advised that securing a deeper trading relationship 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.

Growing Business Dissatisfaction with Current Deal

Calling on Labour to accelerate its reset with Brussels, the leading business group stated that the UK’s current TCA was failing to help them grow their sales in the EU. Over 50% 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 not helping them.

“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.

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 navigating new trade rules was comprehensive.

Political Pressure for a Closer Partnership

The intervention by the trade body – which represents more than 50,000 firms – comes amid growing recognition within Labour’s frontbench about the economic impact of leaving the EU. Recently, Wes Streeting became the most recent cabinet minister to call for a deeper trading relationship with the EU, in remarks interpreted as a suggestion 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 stated in the past he could not foresee a situation where the UK rejoined within his lifetime.

However, several ministers favouring closer EU links are thought to be part of a group who would prefer the administration to take more ambitious steps.

Key Recommendations for the EU Negotiations

According to a document setting out a “corporate blueprint for the EU reset”, the business group said the government must prioritise its efforts to minimise trade friction for exporters to help boost 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.

“Our overseas sales since leaving the EU have virtually stopped. The TCA has had no impact 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:

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

An official representative said: “This government is cutting bureaucracy and obstacles to trade to support jobs, business, and growth. That’s exactly why we renewed our partnership with the EU and are making significant headway in negotiations.”