Results from the first major business survey for 2021 by the British Chambers of Commerce on Brexit found that half (49%) of exporters are facing difficulties in adapting to the changes in the trade of goods following the ratification of the UK-EU Trade and Cooperation Agreement (TCA) on 1 January 2021.
Fieldwork for the survey, which received 1,000 responses, mainly from SMEs, was carried out between 18 and 31 January 2021. Nearly half (47%) of respondents exported goods or services.
The survey sought to understand the extent to which businesses found it easy or difficult to adapt to changes in trading goods and/or services and moving people in the month since the ratification of the TCA. Businesses reported the highest proportion of difficulties in adapting to changes in trading goods.
The survey found that:
When asked about the specific difficulties businesses were facing, commonly cited concerns included increased administration, costs, delays, and confusion about what rules to follow.
Need for Action
The BCC will continue to support UK businesses through its trade documentation services and Chamber Customs, a customs advisory, training and brokerage service delivered through Chambers of Commerce across the UK, and by working closely with the government.
The leading business group is calling on the UK Government, and where necessary with EU partners, to:
Commenting on the results, BCC Director General Adam Marshall said:
“Trading businesses – and the UK’s chances at a strong economic recovery – are being hit hard by changes at the border.
“The late agreement of a UK-EU trade deal left businesses in the dark on the detail right until the last minute, so it’s unsurprising to see that so many businesses are now experiencing practical difficulties on the ground as the new arrangements go live.
“For some firms these concerns are existential, and go well beyond mere ‘teething problems’. It should not be the case that companies simply have to give up on selling their goods and services into the EU. Ministers must do everything they can to fix the problems that are within the UK’s own control, and increase their outreach to EU counterparts to solve the knotty issues that are stifling trade in both directions.
“This situation could get worse if the UK sticks to its guns and introduces additional SPS checks in April and full customs checks on imports in July. These timescales need to change – and the support available for businesses who are battling to adapt to new trading conditions significantly increased.”
Commenting on what this means for businesses on the ground, BCC Director of Trade Facilitation and ChamberCustoms Liam Smyth said:
“Underneath the overall figures, firms’ concerns fit broadly into three areas.
“First, difficulties arising from the challenges adjusting to the new arrangements, such as the sheer volume of paperwork and significant new costs of adjusting to those.
“Second, issues about how new rules have been implemented, such as new customs arrangements.
“Third, core provisions of the TCA which are currently of significant concern to businesses, such as on Rules of Origin and VAT.
“Taken together, and on top of decreased revenue and cash flow as a result of the pandemic, this is a difficult moment for exporters. Some tell us they will respond to the challenges by switching away from international trade or by moving their operations overseas.
“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.”