Cyprus Mail 1 July 2021 - by Andrew Rosenbaum
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| Too much red tape for businesses in the wake of Brexit. |
Almost a third of businesses that trade with the EU have suffered a decline or loss of business since new barriers to trade were introduced on January 1, according to a survey conducted by the UK Institute of Directors.
Before Brexit, the EU was the UK’s largest trading partner, with 53% of its exports headed to Member States.
Now a full 17% of UK businesses that previously traded with the EU have stopped, the survey shows in a note shared with the Cyprus Mail. The cost of border paperwork and increased shipment costs have caused these companies to simply give up on EU trade.
Over a quarter of companies said Brexit had caused difficulties in hiring staff, with 17% in relation to high skilled staff, and 10% low skilled.
The survey highlights the barriers to trade that Brexit has put in place, ones which are very difficult for small- and medium-sized businesses to overcome. These barriers include costly checks, customs controls and new bureaucracy which has required either additional investment or changes in operations for these businesses.
About two-thirds of businesses surveyed anticipated that new UK customs controls would have a negative effect on trade.
The survey of over 650 business leaders also found that nearly a quarter of businesses that trade with the EU have had to relocate some operations or staff.
“Six months on, many businesses are still wrangling with the challenges of our new relationship with the EU. Small-and medium-sized firms in particular are struggling to navigate new procedures around exporting and importing with the bloc, while business leaders are more broadly reporting difficulties in recruiting following an end to freedom of movement,” commented Jonathan Geldart, Director General of the Institute of Directors, in the note.
“Firms of all sizes will continue to need support to minimise the costs of adjusting to the deal, alongside clarity and direction from the government to seek out any new opportunities.”
The effect of Brexit on many companies has been dire, the survey showed. Close to 20% of companies surveyed said that Brexit made them more likely to invest in their businesses.
According to a separate survey, carried out for the Financial Times by the Chartered Management Institute, just over a quarter of private sector managers said changes to trade at the end of the Brexit transition period had negatively affected their organisations’ turnover in January.
Six months later almost the same proportion — 26% — still said there was a negative impact, and largely the same organisations. “Private sector managers reported that post-Brexit trade challenges are still having a negative impact on their organisations’ turnover,” said Ann Francke, chief executive of the CMI, which sought the views of 1,354 managers in its survey.
As of April 2021, almost 450 UK financial services firms, including 182 investment managers, have relocated to other European cities or beefed up their European presence due to the UK’s withdrawal from the European Union, according to statistics in Pensions and Investments.
Money managers and insurance firms have also transferred more than £100 billion ($138.3 billion) in assets to Europe as a result of the UK’s withdrawal from the European Union.
