Key Takeaways
- The British Chambers of Commerce (BCC) is calling on Labour to accelerate its reset with Brussels, citing the UK’s existing trade and cooperation agreement (TCA) as a failure for exporters.
- A survey of almost 1,000 businesses found that 54% of exporters said the TCA was not helping them grow their sales in the EU, a 13 percentage point increase from the previous year.
- The BCC is proposing five key changes for talks with Brussels in 2026, including cutting border checks on animal and plant products and enhancing cooperation on VAT and customs simplification.
- Labour’s frontbench is under pressure to take action to support the economy, with some ministers calling for a deeper trading relationship with the EU.
- The UK’s post-Brexit agreement has had a significant economic impact, with many businesses struggling to navigate changes to EU and UK laws.
Introduction to the Issue
The British Chambers of Commerce (BCC) has warned that a closer EU trade deal is a "strategic necessity" for companies in Britain, as growing numbers of exporters find it tougher to do business under the UK’s post-Brexit agreement. The BCC, which represents more than 50,000 firms employing 6 million people nationwide, is calling on Labour to accelerate its reset with Brussels and prioritize efforts to minimize trade friction for exporters. This comes amid growing recognition among Labour’s frontbench over the damage of Brexit, with some ministers calling for a deeper trading relationship with the EU.
The Impact of the TCA on Exporters
A survey of almost 1,000 businesses, the majority of which were small and medium-sized firms, found that 54% of exporters said the trade deal negotiated by Boris Johnson’s government and enacted in 2021 was not helping them grow their sales in the EU. This is a 13 percentage point increase from the proportion of firms that were unhappy in a similar survey a year earlier. The BCC said this was a clear indication that the UK’s existing trade and cooperation agreement (TCA) was failing to help exporters, and that a closer EU trade deal was necessary to support the economy. Many businesses are struggling to navigate changes to EU and UK laws since the first post-Brexit trade deal was introduced in 2020, with some firms reporting that their export sales have "virtually stopped" since Brexit.
Pressure on Labour to Take Action
The BCC’s intervention comes amid growing pressure on Labour to take action to support the economy, which has had a challenging year. The government’s budget failed to deliver meaningful growth or trade support, and many businesses are looking to Labour to provide a solution. Steve Lynch, the BCC’s director of international trade, said that getting the EU reset right was now a "strategic necessity, not a political choice." He added that trade was the fastest route to growth, yet firms were telling the BCC that it was becoming harder, not easier, to sell into the UK’s largest market. Labour’s frontbench is under pressure to respond to these concerns, with some ministers calling for a deeper trading relationship with the EU.
Proposals for Talks with Brussels
The BCC has made five key proposals for talks with Brussels in 2026, including a deal to cut border checks on animal and plant products, finalizing linkages between the UK and EU’s emissions trading schemes, establishing a youth mobility scheme, securing full UK participation to SAFE – the EU’s defense fund – and enhancing cooperation on VAT and customs simplification. These proposals are designed to help minimize trade friction for exporters and support the UK economy. The BCC believes that these changes are necessary to help businesses grow and thrive, and is calling on Labour to prioritize these issues in its talks with Brussels.
Government Response
A government spokesperson said that the government was removing red tape and trade barriers to support jobs, business, and growth. They added that the government had reset its relationship with the EU and was making strong progress in negotiations. However, the BCC’s survey suggests that many businesses are still struggling to navigate the UK’s post-Brexit trade deal, and that more needs to be done to support exporters. The government’s response will be closely watched by businesses and investors, who are looking for signs of progress on the EU reset and its impact on the economy.
Conclusion
In conclusion, the BCC’s warning that a closer EU trade deal is a "strategic necessity" for companies in Britain highlights the ongoing challenges faced by exporters under the UK’s post-Brexit agreement. The survey’s findings, which show that 54% of exporters say the TCA is not helping them grow their sales in the EU, are a clear indication that the UK’s existing trade deal is failing to support businesses. The BCC’s proposals for talks with Brussels in 2026 are designed to help minimize trade friction for exporters and support the UK economy. As the government continues to navigate its relationship with the EU, it is clear that more needs to be done to support businesses and investors, and to address the ongoing economic impact of Brexit.