A major survey by the British Chambers of Commerce has revealed widespread post-Brexit difficulties for UK exporters.
If you’ve read a newspaper any time in the past two months, you probably already know that many companies are struggling to trade with the EU now that the UK has officially left the customs union.
Now, a major post-Brexit survey by the British Chambers of Commerce (BCC) has laid bare just how many businesses are struggling to navigate the mass of fees and regulations that are now a feature of UK-EU trade.
In this piece, we’ll take a close look at what the survey found, how it was conducted, some of the difficulties UK business have faced, and what the BCC now wants the government to do to help fix things.
What were the main findings of the survey?
Amongst the surveyed businesses, the BCC found that:
- Just under half (49%) of UK exporters have experienced difficulties in the trade or movement of goods since Brexit – saying that adapting to the changes resulting from the EU-UK agreement has either been “relatively difficult” or “very difficult”.
- Among manufacturers, this figure rises slightly to 51%
- For all companies, 30% of respondents have experienced difficulties, however 45% said trade in goods was not applicable to their business
How was the survey conducted?
In total, 1,000 companies were surveyed between 18 and 31 January 2021, and the BCC said responses were “mainly from SMEs”.
Nearly half (47%) of companies surveyed exported goods or services.
What post-Brexit trade difficulties have UK businesses faced?
The survey also included insight from three UK businesses that have had their business negatively affected by the new regulations.
Managing Director Chris Black explained that this Yorkshire manufacturing company exports “65-75% of everything we manufacture”, with the EU “being a big part of that”. They are therefore “concerned about tariffs, additional paperwork, and delays at the borders”.
He also noted that “only last week, we attempted to ship some machines to Spain and were advised by the freight forwarder to store the machines here for a few more weeks whilst everything calmed down”. He added that “there is a long way to go before we fully understand what the new normal is”.
Finally, he indicated that the pandemic is compounding these issues, stating that “in general, shipping worldwide is a nightmare” due to supply chains being “hit hard” and container ships being “all out of position”.
Jonathan Kemp, the Managing Director of this manufacturer of electrical varnishes, resins, compounds and insulating products based in Birkenhead, Merseyside criticised the “lack of clarity and preparedness in all areas”.
This meant that despite having employees with experience exporting all over the world, they were still struggling to deal with the extra costs and delays associated with post-Brexit trade, especially as “there is no support from government to fund delays or extra stock-holding required to deal with the delays or to assist in extra charges incurred by us or our customers”.
Mr Kemp also noted that the company has another manufacturing site in Hungary (within the EU) and that AEV’s European customers are asking for production to be moved there to avoid the extra costs.
He concluded by saying that “our current view is that we will reduce our operation in the UK and invest in EU facilities”.
This Shropshire-based kitchenware manufacturer identified four difficulties associated with post-brexit trade.
Firstly, the “increased documentation” has meant the company “need to use higher paid staff to complete shipping details”. Secondly, there has been a “loss of orders due to new duty/customs arrangements”. Thirdly, there is now more “time (and therefore money) spent resolving European customer enquiries and finally, there’s the “cost of implementing new shipping arrangements and delivery charges on our website”.
The conclusion was clear – “a small business like ours does not have all the resources to deal with the extra work”.
What does the BCC want the government to do?
To help limit disruption for UK businesses and maintain the vital flows of UK-EU trade, the BBC identified four key things that the government should do:
- Work with the BCC and chamber companies to identify the most significant blockages for business and immediately publish plans for resolving those problems
- Create new tax credits so companies could offset their spending on adapting to the new UK-EU trade requirements against their tax bill
- Push back the imposition of additional SPS checks (these are scientific tests on animal and plant goods that are due to come into force from April) and full customs checks (from July) on imports into the UK
- Look at key areas of the new relationship and work with EU partners on easements to minimise unhelpful burdens, including on aspects of Rules of Origin and VAT
Commenting on the survey, BBC Director General Adam Marshall said “for some firms, these concerns are existential, and go well beyond mere ‘teething problems’”.
BCC Director of Trade Facilitation and ChamberCustoms Liam Smyth added that the twin impacts of the pandemic and UK-EU trade changes meant that this was “a difficult moment for exporters”, some of which “will respond to the challenges by switching away from international trade or by moving their operations overseas”.
He finished by insisting that “the government needs to respond to this risk by giving firms tax credits to help with their ongoing adjustment and leaving no stone unturned in educating businesses and removing every barrier they can”.
