Major business group calls for fundamental change in UK-EU relationship as current system 'failing'

A major UK business group has called on the government to "fundamentally reassess" the country's relationship with the EU, as it said the current system is still "failing to deliver".

Businesses are still struggling with a "thicket" of Brexit red tape, according to a research report from the British Chamber of Commerce (BCC) released on Monday.

The group welcomed Prime Minister Andy Burnham's statements about needing an "honest discussion" on the relationship with Europe.

"He deserves real credit", said the BCC's director general Shevaun Haviland.

In an interview with The Sunday Times last week, the prime minister said immigration into ⁠Britain had ⁠been "different" since Brexit, with more foreigners ‌moving permanently.

He said: "Freedom of movement had very significant challenges associated with it. Revolving door migration where people would come and then go back is different.

"The balance of migration has changed since then [the Brexit referencdum] hasn't it? I think we've just got to have an honest discussion about those things."

However, shadow chancellor Andrew Griffiths told Sky News' Sunday Morning With Anne McElvoy days later: "I want to remove frictions wherever we can. I want great British companies to have the best opportunities to do that.

"But I don't want to go back to open borders that the British people conclusively rejected."

Emboldened by Mr Burnham's comments, the BCC wants to secure a new deal that will "better serve the UK economy and stand the test of time".

Nine different models for the UK-EU relationship should be explored in depth and laid out by government, the BCC said.

"This is not a binary case of being in or out", Ms Haviland said

Problems to date

While companies have shown "great resilience" in Brexit adaptation, it has not removed the costs of paperwork, delays and "needless duplication of bureaucracy", she added.

UK firms have been pushed to the margins of supply chains they once helped build, the BCC said, due to a cocktail of customs, VAT, and regulatory barriers.

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Rising protectionism within the EU via proposed "Made in Europe" rules would give preference to European goods in public procurement and with subsidies.

The EU is building "a trade wall" to level the playing field with China, which could create "significant collateral damage" for neighbours like the UK, the report authors wrote.

Cost of inaction

Among the suggested options to evaluate are a bespoke customs union, a Swiss-style agreement, a European Economic Area (EEA)-style relationship, a combined model, or full EU membership.

While none were said to be "cost-free", the BCC said the "status quo also carries costs".

"The central choice is not between the status quo and turning back the clock. It is between continuing with repeated, issue-by-issue fixes or building a more stable relationship suited to the economic, trade and security pressures", the report read.

The government has been told to put out the evidence behind each option, explaining trade-offs, and choosing a relationship that gives businesses the strongest platform to benefit UK residents.

(c) Sky News 2026: Major business group calls for fundamental change in UK-EU relationship as current system 'f