One in five small UK exporters are unable to trade with the EU because of barriers created by Brexit, according to a survey by the British Chambers of Commerce (BCC), sparking calls for Rishi Sunak to act on costs and red tape.
The survey also revealed that businesses are in the dark about promised new trade deals with the rest of the world – despite ministers claiming that these are a priority.
The business group is now urging the new government to adopt its proposals to reduce bureaucracy at the borders, almost two years after Boris Johnson’s “fantastic” trade deal was signed.
It is calling for action to cut customs delays and reduce other barriers to trade, and to make it easier to recruit much-needed workers. It has also put forward a proposal for the UK and EU to recognise each other’s professional qualifications.
“The BCC has a plan to cut red tape on UK-EU goods movements,” said William Bain, head of trade policy at the organisation.
He said smoother trade is needed across the world, but added: “For traders exporting to the EU, speed, efficiency and reduced hassle are even more to the forefront of their minds.”
The “lack of engagement” with businesses about free trade agreements is “another stumbling block preventing more international sales”, the BCC said.
Business organisations have generally been reluctant to criticise the government for the damage inflicted by the Christmas 2020 trade deal, which ended frictionless trade with the EU.
This is despite the Treasury watchdog, the Office for Budget Responsibility, stating that the UK had “missed out” on the post-Covid recovery in global trade – and warning of a 4 per cent loss to GDP in the medium term.
London School of Economics research found that smaller businesses had “simply stopped selling a lot of products to smaller countries in the EU”.
The BCC survey, of almost 1,000 UK businesses, found that:
- 20 per cent of UK exporters to the EU said they could not “meet the requirements” of the Brexit trade deal – while only 61 per cent said they could
- 79 per cent of firms have not assessed what they might need from a trade deal with major international markets, including 69 per cent of UK exporters
- 61 per cent of firms have been hit by customs delays and tariffs, while 60 per cent pointed to costs and disruption and 48 per cent to “regulatory barriers”
- Problems trading with the EU have encouraged 9 per cent of exporters to turn to new non-EU markets
Ian Wilson, chief executive of the shipping firm DHL Express UK, said: “We can see from the research that most businesses aren’t aware of what FTAs could mean for them.”
Hopes of a trade deal with the US have died and a proposed agreement with India is on ice, leaving only Australia and New Zealand as new trade partners – and both of those deals carry puny economic gains.