Red tape obstacles
Brexit trade deal ‘bad for business’ say exporters
Business leaders have called for urgent removal of red tape that is damaging trade between the UK and the EU.
Seven in 10 UK firms (71%) say the Trade and Co-operation Agreement with the EU has been bad for business and is holding back growth, with a majority saying it has pushed up costs and increased paperwork.
A majority of the 1,000 companies polled by the British Chambers of Commerce (BCC) said the deal had put Britain at a competitive disadvantage.
Just one in eight firms think the Brexit deal has had a positive impact on them, the BCC found.
Issues included rising costs, not having the time and money to deal with the bureaucracy the deal had introduced and EU customers being deterred from considering UK goods and services.
The BCC said its findings “clearly show” there are issues with the EU trade deal that need to be improved. It is urging ministers to make exporting food less complex and remove limitations on business travel and work in the EU.
Smaller and medium-sized firms have been particularly badly impacted by new trade barriers, the BCC said.
“Nearly all of the businesses in this research have fewer than 250 employees and these smaller firms are feeling most of the pain of the new burdens in the TCA,” said the BCC’s head of trade policy, William Bain.
“Many of these companies have neither the time, staff or money to deal with the additional paperwork and rising costs involved with EU trade, nor can they afford to set up a new base in Europe or pay for intermediaries to represent them.
“But if both sides take a pragmatic approach, they could reach a new understanding on the rules and then build on that further.”
The BCC says practical help could be introduced, for instance, to help with VAT. Some companies are being asked to register in multiple EU states for VAT in order to sell online to customers .
The BCC says the UK needs a supplementary deal, like Norway’s, which exempts the smallest firms from the requirement to have a fiscal representative and incur these duplicate costs.
Problems are expected to deepen this year when more checks are due to be phased in at the UK border, including physical assessments of plant and animal imports.
Labour’s shadow international trade secretary, Nick Thomas-Symonds, said the figures were “extremely worrying”.
He accused the government of being asleep at the wheel and showing a lack of support to help businesses who are seeking help.
“Business prosperity, job security and livelihoods depend on reliable supply chains. Ministers need to urgently listen to business and give them the support they need,” he said.
Trade figures released last week showed UK exports to the EU plunged by £20 billion last year compared with 2018 – the last year in which trade was not disrupted by the pandemic or Brexit.
Philippa Whitford, the SNP’s Europe spokesperson, said: “This latest survey highlights once again that the Tory government’s extreme Brexit deal has been nothing short of an unmitigated disaster.
“Brexit has prevented growth in the economy, cost billions of pounds, led to drastic fall in exports, and is now adding to the cost of living crisis.”
A UK government spokesperson said: “The Trade and Co-operation Agreement is the world’s biggest zero-tariff, zero-quota free trade deal. It allows businesses in Britain to trade freely with Europe while also being able to seize new trading opportunities with countries around the world.
“We’ve always been clear that being outside the single market and the customs union would mean changes and that businesses would need to adapt to new processes. That is why we are ensuring that businesses get the support they need, including through the free-to-use Export Support Service.
“Goods exports to EU nations were 4% higher last year compared with 2020. However, given the Covid-19 pandemic, global recession and supply chain disruption, it is still too early to draw any firm conclusions on the long-term impacts of our new trading relationship with the EU.”
Salmon sales rise
The volume of Scottish salmon sold abroad was 97,835 tonnes in 2021 – a 36% increase year-on-year.
This included strong recoveries in mature markets such as France and the US, but also high growth in China and Singapore.
Analysis has also confirmed that Scottish salmon remained the UK’s biggest food export, followed by bread and pastries, chocolate, cereals, and cheese.
Sales of Scottish salmon in UK shops soared 4.9% to £1.1 billion last year, despite a fall in overall fish purchases, according to trade body Salmon Scotland.
Volumes consumed increased 7.8% to 63,300 tonnes, up from 58,700 tonnes.
The total fresh chilled fish market increased by 4.2% in terms of sales to £2.6 billion, but there was a 0.2% fall in the overall fish market.