🔗 Share this article

The Labour administration has been advised that securing a deeper trading relationship 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 existing post-Brexit trade deal.

Growing Exporter Frustration with Current Deal

Calling on Labour to accelerate its reset with Brussels, the British Chambers of Commerce 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 – most of whom were small and medium-sized companies – said the trade deal enacted in 2021 was failing to assist.

“Following a budget that did not to deliver meaningful growth or trade support, getting the EU reset right is now a strategic necessity, not a matter of political preference,” 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 dissatisfied companies in a similar survey a year earlier. It added that just four out of the 946 firms surveyed believed government support on trade policy changes was comprehensive.

Political Pressure for a Deeper Relationship

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, Wes Streeting became the latest top Labour politician to call for a deeper trading relationship with the EU, in remarks seen as hinting that Britain could join a customs union.

Such an arrangement 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 rejoined within his lifetime.

However, several pro-European ministers are thought to be part of a group who would prefer the administration to take more ambitious steps.

Business Proposals for the EU Negotiations

In a report 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 adapt to new rules in EU and UK laws since Brexit.

“Our overseas sales since leaving the EU have virtually stopped. The TCA has had zero effect in recovering any sales into the EU,” said a manufacturer in Greater Manchester.

The BCC outlined several main recommendations for negotiations with the EU in 2026, including:

• A deal 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 defence fund.
• Improving collaboration on VAT and customs simplification.

A government spokesperson said: “This government is removing red tape and trade barriers to support jobs, business, and growth. That’s exactly why we renewed our partnership with the EU and are making strong progress in negotiations.”