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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 an increasing proportion of exporters report greater difficulty to operate under the existing post-Brexit trade deal.

Mounting Exporter Frustration with Post-Brexit Arrangements

Urging the government to hasten its reset with Brussels, the leading business group stated that the UK’s current TCA was not supporting them grow their sales in the EU. Over 50% of exporters in a survey of almost 1,000 businesses – the majority of which were SME companies – said the trade deal negotiated by Boris Johnson’s government was not helping them.

“With a budget that failed to deliver substantial economic expansion or trade support, securing a successful EU reset is now a strategic necessity, not a political choice,” said Steve Lynch.

Pointing to a continuing economic cost from Brexit, the business group 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 a tiny fraction of the businesses surveyed believed government support on trade policy changes was adequate.

Political Pressure for a Closer Partnership

The intervention by the trade body – which speaks for tens of thousands of companies – comes amid growing recognition within Labour’s frontbench about the damage of Brexit. Recently, a senior Labour figure became the latest top Labour politician to advocate for closer economic ties with the EU, in remarks interpreted as a suggestion that Britain could enter into a customs arrangement.

This kind of proposal would contradict Labour’s manifesto, which promised “no going back” 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.

However, several pro-European ministers are believed to be among those who would prefer the administration to take more ambitious steps.

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 minimise trade friction for exporters to support growth in the UK economy. Quoting frustrated survey respondents, it said firms were finding it ever harder to adapt to new rules in EU and UK laws since Brexit.

“Since Brexit our export sales have all but ceased. 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 several main recommendations 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 carbon markets.
• 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: “This government is cutting bureaucracy and trade barriers to boost employment, companies, and the economy. This is precisely the reason we reset our relationship with the EU and are making strong progress in negotiations.”