Director Weekly  Turmoil in Westminster risks disrupting the UK-EU reset at a time when an increasing number of UK business leaders want the government to prioritise the EU relationship

Government ministers are reported to be irritated by the move, and business leaders are likely to be disappointed, too. A new survey of IoD members – published to coincide with the tenth anniversary of the Brexit referendum – shows that a majority of UK business leaders (52%) now want the UK government to prioritise the EU relationship. That number is up 17 points since April 2025 – a significant increase that highlights the EU’s importance to UK business.

The research also highlights support for closer regulatory alignment. Nearly two-thirds (63%) of respondents back the government’s approach, with 48% expressing strong support. Opinions remain divided, however, with a quarter (25%) strongly opposed.

Clearly, one of the reasons that many leaders seek closer alignment is the enduring difficulties faced by many exporters to the EU, despite the Trade and Cooperation Agreement (TCA) that came into force in 2021.

In our most recent survey, among respondents who trade with the EU, 61% report experiencing barriers to trade, with paperwork (66%), border checks (41%) and customs duties (41%) the three biggest barriers.

Qualitative feedback (explored in my longer blog here) expands on the difficulties behind the data – from EU companies turning down cross-border business opportunities because of the complexity involved, to those finding that restraints on travel are making it harder to build professional relationships.

The proportion of IoD members reporting that the EU trading relationship has a negative impact on their business has fallen steadily over recent years, and the work done to reset the relationship over the last two years has been important for boosting exporters’ confidence. Yet there is much still to be done. Government priorities include the SPS agreement relating to animal and plant products, which is still being negotiated; linkage of the UK and EU emissions trading schemes; plus improvements on youth mobility and mutual recognition of qualifications.

More broadly, the case for prioritising the EU relationship has grown stronger for many businesses in the wake of global turmoil in recent years. Russia’s invasion of Ukraine, China’s posturing over Taiwan, US trade controls, and war in the Middle East are among the factors that have intensified geopolitical instability and underlined the fragility of global supply chains. The gravitational pull towards the EU has increased markedly.

What, then, might we expect from an Andy Burnham-led government? He was coy throughout his by-election campaign about his approach to the EU. No wonder: he was trying to win a Leave-voting constituency having historically been pro-rejoin. Rejoining may not be a realistic proposition right now (and runs against Labour’s 2024 Manifesto), but Burnham might set out different aspirations for the longer-term future of the relationship.

Whether the next prime minister is Andy Burnham or some other challenger, many business leaders will expect them to prioritise the EU relationship – and, after the delay to next month’s Summit, will hope that the government will make up for lost time.