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Tuesday, April 13, 2021

The high price being paid by British companies for Brexit

Amongst all the other news this week, we must not lose sight of the fact that the government's insistence on a hardline Brexit is continuing to hamper the UK economy's recovery.

The Independent reports on a new survey that has found Boris Johnson’s Brexit trade deal with the EU has put the future of many exporting businesses at risk, with 41 per cent reporting decreased overseas sales in the first three months of the new arrangements:

The British Chambers of Commerce called on the UK government to get back round the table with the EU for fresh negotiations to lower some of the barriers to trade created by Mr Johnson’s Christmas Eve Trade and Cooperation Agreement (TCA).

While some of the collapse in trade with continental Europe was due to the Covid pandemic, the BCC said many firms were blaming Brexit for shipping delays, increased cost of transporting goods and extensive new paperwork requirements.

And the group dismissed ministers’ claims that the difficulties experienced by exporters were down to “teething problems” following the transition out of the EU’s single market and customs union on 1 January.

Instead, co-executive director Hannah Essex warned: “They are structural issues that, if they continue to go unaddressed, could lead to long-term, potentially irreversible weakness in the UK export sector.”

The paper says the report comes ahead of the hotly-anticipated release on Tuesday by the Office for National Statistics of trade figures for February, which will be keenly studied for evidence of the long-term impact of Brexit on exports to the EU, after the government blamed teething troubles for a staggering 41 per cent (£5.6bn) fall in sales to the bloc in January:

One exporter, Alfred van Pelt from Somerset-based clothing and accessories wholesaler Something Different, said sales to the 27 EU member states had “collapsed dramatically” since the transition.

“Not only did this cause an immediate drop in turnover and the need for redundancies, but also killed a massive growth opportunity of our business. Our foreign investor had plans for the UK entity to become a European distribution hub.

“This is now no longer on the cards as the only distribution that can be done from within the UK cost effectively is to UK postcode addresses.”

Project fear has become project reality.
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