Six months, British companies are still fighting against Brexit

A survey conducted by the British Financial Times revealed that since the Brexit rules came into effect on January 1, nearly one-third of British companies trading with the European Union have suffered business declines or losses.

The survey conducted by the Association of Directors also found that since the beginning of this year, 17% of British companies have had transactions with the European Union and have temporarily or permanently suspended transactions.

The survey results paint a bleak picture of trade arrangements with Europe, especially for small companies that do not have the resources to deal with the commercial barriers caused by Britain’s departure from the EU’s single market and customs union.

Six months after Brexit, the company reported that they continued to work with New red tape Ushered in the Anglo-European Trade Cooperation Agreement.Although the Brexit deal is agreed Christmas Eve, Confirming the zero-tariff and zero-quota trade between the UK and the EU. The new arrangement requires companies to comply with costly inspections, customs controls and bureaucracy, which has increased commercial friction.

The relationship between the United Kingdom and the European Union has also deteriorated due to the new trade border between Great Britain and Northern Ireland, which requires inspections of many goods crossing the Irish Sea, triggering violence in the pro-British trade union community in the region.

“Six months have passed and many companies are still struggling to meet the challenges posed by our new relationship with the EU,” said Jonathan Geldart, director general of the Institute of Directors.

“In particular, small and medium-sized companies are struggling to cope with the new procedures related to import and export with the EU, while business leaders have more widely reported that with the end of freedom of movement, recruitment is difficult.”

The IoD survey asked 651 companies to assess the impact of Brexit so far.

Among companies that trade with the EU, 31% said that the new barriers since January 1 have had a negative impact on trade with the EU. Only 6% said trade increased, while 58% said there was no change.

According to another survey conducted by the Chartered Management Institute for the British Financial Times, slightly more than a quarter of private sector managers stated that the changes in trade at the end of the Brexit transition period had an impact on their organization’s January turnover Negative impact. Six months later, almost the same percentage—26%—still said there was a negative impact, and it was basically the same organization.

“Private sector managers report that post-Brexit trade challenges are still having a negative impact on their organization’s turnover,” said CMI CEO Ann Francke, who asked 1,354 managers in the survey Views.

Bar chart of private sector managers in organizations dealing with the EU-the impact of changes in Brexit on turnover (%) shows that many companies still report turnover hits six months after Brexit

However, more than half of the managers participating in the CMI survey stated that the initial challenges surrounding trade with the EU were Brexit The transition period has been resolved at least to a certain extent-this shows that many companies are beginning to overcome the initial obstacles.

Some companies that responded to the IoD survey tried to focus on the positive aspects of Britain’s departure from the European Union: 17% of companies said Brexit made them more likely to invest in their business, while 15% said it made them less likely to invest.

An anonymous contributor to the survey said: “Because of Brexit, I have become more optimistic about the economy in general and therefore more likely to invest in the future.”

But some British companies have responded to Brexit by making profound changes to their companies, such as moving their business to the English Channel.

Many companies believe that when some of the mitigation measures taken to ease the Brexit transition are over this year, the impact of Britain’s departure from the European Union will become worse, including the introduction of import controls on the border between the United Kingdom and the European Union.

According to IoD’s survey, about two-thirds of companies said that the new British customs control measures will have a negative impact on trade when they are implemented in January next year, that is, six months after they should have been implemented.

To what extent do you expect the new British customs controls to have a negative impact on trade? (Percentage of responses) Shows that companies expect problems with the new EU customs controls on imports from the UK

For many companies, the trouble with the new bureaucracy that has been introduced is enough to persuade them to give up EU business.

Last week, Cheshire Cheese Company decided to stop selling to the European Union in bulk. The cost of shipping goods to the EU has risen from about 300 pounds to more than 1,300 pounds, which means that its once successful European trade is about to end.

Simon Spurrell, who runs the Macclesfield-based specialty cheese maker, said that not only is it no longer feasible to ship directly to the 446 million EU consumers, “we can no longer ship to Northern Ireland. Ship”.

Professional cheese maker

© Jon Super/FT

“The government has successfully removed us from the European Union as a business, and it is no longer commercially viable”
Simon Spurrell, Cheshire Cheese Company

He added: “The government has successfully removed us as a company from the European Union. It is no longer commercially viable. Our distributors in France, Spain and Germany are not interested in doing business with us because of the additional costs. And difficulties. Paperwork.”

At the same time, the motorcycle broker based in Totnes, who has been buying all bicycles from the European Union, has completely stopped serving the region. According to Paul Jayson, who runs a vintage motorcycle trader, about 15% of the company’s sales come from the European Union.

Although Jason now introduces bicycles from non-EU countries such as Australia and the United States, it may take months instead of days. “We have always been global, and we will survive, but we are in a’no-deal’ situation. There is nothing but friction.”

Vintage Motorcycle Merchant

© Cameron Smith/FT

“We have always been globalized and we will survive, but we are in a’no-deal’ situation. There is nothing but friction.”
Paul Jason, motorcycle broker

In a meeting with ministers, Sprrell was told to abandon the European Union in favor of markets such as Canada.

But Sprrell said: “We shipped the first batch of packages to consumers, and after 14 packages were levied an additional 245% tariff, we had to stop sending packages to Canada within a week.”

Leaving the EU single market and ending freedom of movement also exacerbated the growing Shortage of workers in England. According to IoD’s survey, more than a quarter of companies said that Brexit has caused recruitment difficulties-17% of companies complained about the loss of highly skilled employees, and 10% of companies complained about a shortage of low-skilled employees.

Does your organization have difficulty recruiting due to insufficient applicants from the EU (percentage of responses), showing that a quarter of UK companies have difficulty recruiting employees from the EU

British companies are forced to set up operations in the EU to serve the European market, but this has led to rising costs and the transfer of jobs from the UK to the EU. According to IoD’s survey, nearly a quarter of companies that trade with the EU had to relocate some businesses or employees.

Laura Rudoe, the operator of Evolve Beauty, an environmentally-friendly beauty company in Hertfordshire, said that she has set up a warehouse in Ireland to export to the EU and reliably serve EU customers. She said this brings “extra cost, time and paperwork.”

“Since Brexit, we have found that some key markets are closed to us,” Ludo added.

Eco-friendly beauty brand

©Charlie Bibby/FT

“Since Brexit, we have found that some key markets are closed to us”
Laura Ludo, Evolving Beauty

Clothing retailer Rivets and hidden Plan to ship goods through the Netherlands to minimize costs.

Danny Hodgson, the founder of the London-based company, said: “The time and mental effort to try to preserve our EU business is exhausting-I have almost given up several times, but I don’t Will make this government fail me.”

Hodgson said the additional tariffs, value-added tax and freight have caused the price of his company’s goods to the EU to rise by 30% to 40%. The result-after the European Union grew at an annual rate of 20% before Brexit-trade with European countries was cut by more than half.

CMI found that, compared to managers of large organizations, managers of small and medium-sized companies are more likely to report that the end of the Brexit transition period has had a negative impact on their business turnover at 35%, compared with 23% for managers of large organizations. %. Minute.

Clothing retailer

© Anna Gordon/FT

“The time and mental effort to try to preserve our EU business is exhausting-I almost gave up a few times.”
Danny Hodgson, Rivets and Hidden

Many people were forced to lay off staff. Alfred Van Pelt is the managing director of Something Different, which distributes clothes, gifts and other goods to small retailers and visitor centers across Europe. After Brexit, his number of employees has been halved.

Last year, the 30-year-old dealer in Somerset sent 2,500 parcels a day to EU customers during the peak trading period in November and December. Now, the company has sent about 100 to 150—”If we are lucky,” van Pelt said.

The problem is the costs and border procedures that EU customers are unwilling to bear. The value of the packages may be low-less than £30 each-but the shipping cost is £8 and the import declaration fee is £17.50.

“This made our business plummet,” Van Pelt said, who had to lay off 9 of the 20 employees. The business tried to expand in the UK, but last year three-quarters of its sales went to the European Union, which was a difficult task.

He said that without Brexit, the company could have hired more full-time employees in the UK because its EU-based owners had planned to invest in its business. “Most of our EU customers have just given up,” he added.

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