Firms being held back two years after EU deal
Two years after the UK Government drew up a new rule book for trading with the EU three-quarters (77%) of firms affected by it say it is not helping them increase sales or grow their business.
The Trade and Co-operation Agreement (TCA) was agreed on Christmas Eve in 2020 to allow tariff-free trade with the EU once Brexit took effect.
But a high proportion of businesses say they are still having major problems trying to use the deal to trade with Europe.
The British Chambers of Commerce, which commissioned the research, has sent the Government a report setting out the main issues the TCA is causing alog with proposed solutions.
The survey of more than 1,168 businesses found that alongside problems with the TCA, four in five (80%) firms had seen the cost of importing increase since January, more than half (53%) had seen their sales margins decrease and almost three quarters (70%) of manufacturers had experienced shortages of goods and services.
One respondent, a retailer in Dundee, said: “Customs on both sides of the EU border seem to have a separate set of rules to be able to charge different amounts for the same thing. We don’t know until it’s too late what these costs are.”
Shevaun Haviland, director general of the British Chambers of Commerce, said: “Businesses want political leaders on both sides to move on from the debates of the past and find ways to trade more freely.
“It is no coincidence that during the first 15 months of the TCA we stopped selling 42% of all the different products that we used to.
“Businesses feel they are banging their heads against a brick wall as nothing has been done to help them, almost two years after the TCA was first agreed. The longer the current problems go unchecked, the more EU traders go elsewhere, and the more damage is done.
The BCC has set out 24 recommendations to increase UK-EU trade. Its top five proposals for quick action are:
– Create a supplementary deal with the EU which either eliminates or reduces the complexity of exporting food for SMEs.
– Establish a supplementary deal, like Norway’s, that exempts smaller firms from the requirement to have a fiscal representative for VAT in the EU
– Allow CE marked goods and components to continue to be used in Great Britain after 2024.
– Make side deals with the EU and member states to allow UK firms to travel for longer and work in Europe.
– Reach an agreement on the future of the Protocol on Ireland/Northern Ireland with the European Commission in the early months of 2023, to stabilise our trading relationship.