It’s been six months and UK businesses continue to struggle with Brexit

Nearly a third of British companies trading with the EU have experienced a decline or loss in business since post-Brexit rules came into force on 1 January, according to a survey in the Financial Times.

According to a survey by the Institute of Management, 17% of UK companies previously trading with the EU have been temporarily or permanently suspended since the beginning of the year.

The findings show a bleak picture of trade agreements with Europe, especially for small businesses that do not have the resources to overcome trade barriers in the UK from the EU’s single market and customs union.

Six months after Brexit, the companies reported that they were still fighting new paper The UK-EU trade and cooperation agreement gave him a head start. Despite agreeing on a Brexit deal Christmas Eve, a certificate with zero tariffs, ratified zero quota trade between the UK and the EU, the new agreements allow companies to comply with costly controls, customs controls and bureaucracy that have increased trade friction.

Relations between the UK and the EU have also deteriorated as a result of a new trade barrier between Britain and Northern Ireland, which calls for controls on goods across the Irish Sea, which has led to violence in pro-British unionist communities in the region.

“In six months, many businesses are facing the challenges of our new relationship with the EU,” said Jonathan Geldart, CEO of the Institute of Management.

“Small and medium-sized enterprises in particular are struggling to engage in new export and import procedures with the bloc, while business leaders complain about the difficulties of hiring after freedom of movement ends.”

The IoD survey asked 651 companies to provide an assessment of the impact that Brexit has had so far.

Of those companies trading with the EU, 31 percent said the new barriers since January 1 have had a negative impact on trade with the bloc. 6 per cent said trade had increased, and 58 per cent said there had been no change.

According to a special survey by the Chartered Management Institute for FT, more than a quarter of private sector managers said changes in trade at the end of the Brexit transition period had a negative impact on their organizations ’turnover in January. Six months later almost the same proportion (26%) said it still had a negative impact, and largely the same organization.

“Private sector managers have reported that post-Brexit trade challenges still have a negative impact on the turnover of their organizations,” said Ann Francke CEO of CMI, who sought the views of 1,354 executives in her survey.

However, more than half of the managers who took part in the CMI survey said initial challenges to trade with the EU Brexi the transition period was resolved at least to a small extent – suggesting that many companies were beginning to overcome initial barriers.

Some companies that responded to the IoD survey wanted to focus on the positive aspects of the UK’s exit from the EU: 17% of companies said Brexit was more likely to invest in business, with 15% saying they had invested.

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An anonymous poll contributor said: “Overall I am more optimistic about the economy as a result of Brexit, so I have a greater chance of investing in the future.”

But some UK companies have responded to Brexit by making profound changes to their businesses, such as moving operations from the English Channel.

Many businesses believe the impact of the UK’s exit from the EU will worsen as some of the easing measures put in place to facilitate the Brexit transition end this year, including the introduction of import controls with the UK border blockade.

According to the IoD survey, two-thirds of companies said the new UK customs controls would have a negative impact on trade when they were introduced in January next year – six months after they were set up.

For many companies, the problem of the new bureaucracy that has already been introduced has been enough to convince them to leave the EU business.

Last week, the Cheshire Cheese Company decided to stop selling to the EU in wholesale trade. The cost of shipping to the EU has gone from around £ 300 to over £ 1300, which made it a success when European trade was successful.

Simon Spurrell, a specialist cheesemaker in Macclesfield, said it was not feasible to send 446 million EU consumers directly, “we can’t send any more to Northern Ireland either”.

Specialist cheesemaker

‘The government has successfully removed us from the EU as a business, it is no longer commercially viable’
Simon Spurrell, Cheshire Cheese Company

He added: “The government has successfully removed us from business from the EU, it is no longer commercially viable and our distributors in France, Spain and Germany are no longer interested in doing business with us due to additional cost and difficulties.”

Meanwhile, the Totnes-based Motorcycle Broker – the EU that bought all the bikes – has ceased to fully serve the region. About 15 percent of the company’s sales have been in the EU, according to Paul Jayson, who runs a vintage motorcycle salesman.

While Jayson now brings in bikes from countries outside the EU, such as Australia and the US, they can be months instead of days. “We’ve always been global and we’ll survive, but we don’t have any agreements.” It’s just rubbing. “

Vintage motorcycle dealer

“We have always been global and we will survive, but we are in a state of ‘no agreement’. There is nothing but friction. ‘
Paul Jayson, Motor Broker

In a meeting with ministers, Spurrell was told to leave the EU in favor of markets like Canada.

Spurrell said: “We sent the first packages to consumers and had to stop shipping them to Canada within a week after the 14 packages received an additional 245 per cent tax.”

Leaving the EU market alone and ending freedom of movement has also increased growth staff shortages In the United Kingdom. According to the IoD survey, more than a quarter of companies said they had difficulty hiring Brexit – 17% complained about the loss of high-skilled workers and the 10% shortage of low-skilled workers.

Businesses in the UK have been forced to set up operations in the EU to serve the European market, but this has led to higher costs and the transfer of jobs from the UK to the EU. Nearly a quarter of businesses trading with the EU have had to relocate some operations or staff, according to the IoD survey.

Laura Rudoe, who runs Evolve Beauty, an organic beauty company in Hertfordshire, said she had set up a warehouse in Ireland to export to the EU and provide reliable service to her customers on the block. He said this has included “additional cost, time and paperwork”.

“Since Brexit, we have seen some key markets closed to us,” Rudoe added.

Ecological beauty brand

‘Since Brexit, we have seen that some key markets are closed to us’
Laura Rudoe, Evolved Beauty

Clothing seller Rivet and hide it plans to route goods across the Netherlands to reduce costs.

Danny Hodgson, founder of the London-based company, said: “It’s a tiring effort to keep our EU business going in terms of time and mental bandwidth; I’ve given up on more than one occasion, but I’m not going to let this government fail me.”

Hodgson said the additional tax, value added tax and shipping costs caused his EU company’s commodity prices to rise by between 30% and 40%. As a result – after growing in the EU by 20% a year before Brexit – trade with European countries has fallen by more than half.

The CMI found that executives in small and medium-sized businesses found it much easier to report that the end of the Brexit transition period had a negative impact on business turnover (35 per cent) compared to large organizations. cents.

Clothing seller

“In terms of time and mental bandwidth, it’s a tiring endeavor to keep our EU business going – I’ve given up almost more than once.”
Danny Hodgson, Rivet & Hide

Many have been forced to cut jobs. Alfred van Pelt, the director of Something Different, which distributes clothing, gifts and other merchandise to small retailers and visitor centers across Europe, halved his workforce after Brexit.

Last year, a 30-year-old distributor based in Somerset sent 2,500 packages a day to EU customers in November and December at the peak of trade. Now, the company sends about 100 to 150 – “if we’re lucky,” van Pelt said.

The problem is cost and borderline procedures, which are reluctant for EU customers. The value of the packages may be low – less than £ 30 each – but the costs are £ 8 for shipping and £ 17.50 to cover import declarations.

“Our business has thrown itself off the edge of the cliff,” said van Pelt, who had to lay off nine of his 20 employees. The business tried to expand in the UK, but last year it was a rising job with three-quarters of sales to the EU.

Without Brexit, the company would have more full-time employees in the UK, he said, given the EU owner’s intention to invest in its operations. “Most of our EU customers have just given up,” he added.

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