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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 do business under the UK’s post-Brexit agreement.

Growing Business Dissatisfaction with Current Deal

Calling on Labour to accelerate its reset with Brussels, the British Chambers of Commerce stated that the UK’s existing trade and cooperation agreement was failing to help them grow their sales in the EU. More than half of exporters in a survey of almost 1,000 businesses – most of whom were SME 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, securing a successful EU reset is now a business-critical need, not a political choice,” said Steve Lynch.

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 navigating new trade rules was comprehensive.

Calls for Action for a Deeper Relationship

The intervention by the trade body – which represents more than 50,000 firms – coincides with increasing awareness within Labour’s frontbench about the damage of Brexit. Recently, Wes Streeting became the most recent cabinet minister 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 single market, customs union, or freedom of movement. Starmer has also previously insisted he could not foresee any circumstances where the UK rejoined within his lifetime.

However, several ministers favouring closer EU links are believed to be among those who would like to see the government go further.

Key Recommendations for the 2026 Reset

According to a document setting out a “corporate blueprint 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 increasingly difficult to adapt to new rules in EU and UK laws since Brexit.

“Our overseas sales since leaving the EU have all but ceased. The TCA has had zero effect in winning back any business into the EU,” said one small manufacturing firm in the North West.

The BCC outlined several main recommendations for talks with Brussels in 2026, including:

• A deal to reduce inspections on agri-food goods.
• Finalising linkages between the UK and EU’s emissions trading schemes.
• Establishing a scheme for young people to work and travel.
• Gaining British involvement in the EU’s defence fund.
• Improving collaboration on VAT and customs simplification.

A government spokesperson said: “We are cutting bureaucracy and obstacles to trade to boost employment, companies, and the economy. This is precisely the reason we renewed our partnership with the EU and are making significant headway in negotiations.”