• Swindon & Wiltshire News
• Thursday December 22 2022
• Author Name: Peter Davison

Three-quarters of UK firms say “oven-ready” Brexit deal has not boosted business – British Chambers of Commerce

More than three-quarters of UK importers and exporters say the government’s “oven-ready” post-Brexit trade deal is not helping them increase sales or grow their business, according to a new report by the British Chambers of Commerce.

A survey by the leading business organisation also suggests 56 per cent of firms that trade with the EU face difficulties adapting to the new rules for trading goods.

The data was published today (Thursday) from a survey of 1,168 businesses, 92 per cent of which were SMEs, two years after the Trade and Co-operation Agreement was agreed on Christmas Eve in 2020.

Prime Minister Boris Johnson promised his “oven-ready” deal would 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, says the BCC.

The survey also found that alongside problems with the TCA, four in five (80 per cent) firms had seen the cost of importing increase since January, more than half (53 per cent) had seen their sales margins decrease and almost three quarters (70 per cent) of manufacturers had experienced shortages of goods and services.

One business 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.”

A retailer told the survey: “Leaving the EU made us uncompetitive with our EU customers. We would have lost all of our EU trade without a base in the EU. This has cost our business a huge amount of money which could have been invested in the UK had it not been for Brexit,” while another reported: “Exporting goods into the EU since Brexit, continues to prove difficult. We have experienced a lot of our goods going missing when they reach customs control. Due to additional import costs, we have found that quite a few of our EU customers that we have dealt with for a long time, in regard to providing a qualifying service, now stay within the EU instead of the UK.”

And a manufacturer told the BCC: “Brexit has been the biggest ever imposition of bureaucracy on business. Simple importing of parts to fix broken machines or raw materials from the EU have become a major time-consuming nightmare for small businesses, and Brexit-related logistics delays are a massive cost when machines are stood waiting for parts. We used to export lesser amounts to the EU, but the bureaucracy makes it no longer worthwhile.”

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.

“This means an honest dialogue about how we can improve our trading relationship with the EU. With a recession looming we must remove the shackles holding back our exporters so they can play their part in the UK’s economic recovery.

“If we don’t do this now then the long-term competitiveness of the UK could be seriously damaged. It is no coincidence that during the first 15 months of the TCA we stopped selling 42 per cent 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.

“There are clearly some structural problems built into the TCA which cannot be addressed until it is reviewed in 2026.

“But as we set out in our report to Government there are some issues that do not need to wait on months of negotiations or major reviews to be fixed.”

The BCC’s TCA Two Years On report sets 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.

The full BCC report on the TCA can be found at https://www.britishchambers.org.uk/media/get/The%20Trade%20and%20Cooperation%20Agreement%20-%20Two%20Years%20On.pdf