UK Businesses Demand “Strategic Necessity” of Closer EU Trade Ties as Brexit Costs Mount
A closer trade relationship with teh European Union is now a “strategic necessity” for British companies, according too a stark warning delivered to Keir Starmer’s government. The British Chambers of Commerce (BCC) reports that growing numbers of exporters are struggling under the terms of the current post-Brexit agreement, fueling calls for a significant reset in relations with Brussels.
The BCC’s intervention adds significant pressure on the Labor party to address the economic fallout from Brexit, particularly as businesses grapple with a challenging economic climate. A recent survey of nearly 1,000 firms revealed widespread dissatisfaction with the level of government support available to navigate the complexities of post-Brexit trade, making the issue central to the political debate.
Exporters Face Mounting Difficulties
The BCC’s report highlights a critical lack of support for businesses navigating the complexities of post-Brexit trade. A staggering 946 firms surveyed indicated that government support for dealing with trade policy changes was, at best, inadequate. Only four businesses felt the assistance provided was thorough.
“With a budget that failed to deliver meaningful growth or trade support, getting the EU reset right is now a strategic necessity, not a political choice,” stated Steve Lynch, the BCC’s director of international trade. “trade is the fastest route to growth, yet firms tell us it is indeed becoming harder, not easier, to sell into our largest market.”
The BCC, representing over 50,000 firms and 6 million employees nationwide, is not alone in recognizing the damage caused by the current trade arrangements. Within Labour’s ranks, a growing chorus of voices is advocating for a deeper trading relationship with the EU.
Internal Labour Debate Intensifies
At the weekend, Wes Streeting became the latest prominent Labour politician to publicly call for closer ties with Brussels, with some interpreting his remarks as a potential openness to a customs union arrangement. Such a move, though, would directly contradict Labour’s manifesto pledge of “no return” to the EU single market, customs union, or freedom of movement.
Keir Starmer has previously maintained that rejoining the EU is not a viable option during his lifetime. Despite this, several ministers within the Labour party – including Streeting, David Lammy, Peter Kyle, Liz Kendall, and Bridget Phillipson – are believed to favor a more proactive approach to improving relations with the EU.
The push for a “reset” aligns with the government’s stated priorities for 2026,following a landmark summit with Brussels earlier this year. Last week, Labour announced an agreement for the UK to rejoin the Erasmus+ EU student exchange programme in 2027, signaling a willingness to re-engage with European initiatives.
A “business Manifesto for the EU Reset”
The BCC has outlined five key proposals for negotiations with Brussels in 2026, detailed in a report dubbed a “business manifesto for the EU reset.” Thes include: streamlining border checks on animal and plant products,finalizing connections between the UK and EU emissions trading schemes,establishing a youth mobility scheme,securing full UK participation in the EU’s defense fund (SAFE),and enhancing cooperation on VAT and customs simplification.
the frustrations of businesses are palpable. One small manufacturing firm in Greater Manchester lamented, “Since Brexit our export sales have virtually stopped. The TCA has had no impact in recovering any sales into the EU.” A small retailer in Hampshire drew a direct link between Brexit, Labour’s tax policies, and economic decline, stating, “Work has stopped coming to [the] UK due to high taxes and no longer being part of the EU. Consequently, lots of companies have shut down and thousands of people have lost their jobs and been out of work for over two years.”
A government spokesperson responded to the BCC’s report by stating, “This government is removing red tape and trade barriers to support jobs, business, and growth. That’s exactly why we reset our relationship with the EU and are making strong progress in negotiations.” however, the BCC’s findings suggest that, for many British businesses, the current progress is simply not enough to overcome the challenges posed by the post-Brexit trading landscape.
