‘Brexit is a business bankrupter’: small firms brace for no deal

Small and medium-sized businesses, the lifeblood of communities, have told of difficult decisions to quit Britain or cancel investment plans because of Brexit.

The owner of a Bristol online retailer that employs 85 people has said that unless there is a Christmas Brexit miracle he will move part of his business to Germany in January because of impending tariffs on exports to the EU.

“We’ve held off and we’ve held off from the point of letting people go, but in January, unless anything happens, we are going to be making people redundant,” said Shaun Loughlin, 34, a founder of the Bristol action sports clothing business Freestyle Extreme.

In anticipation of no deal, he has opened an office in Bucharest with seven staff and he is poised to sign the final paperwork on a new warehouse in Nuremberg to allow him to continue importing and exporting to the continent tariff-free.

“Brexit is not a business disrupter, it’s a business bankrupter,” Loughlin said. He believes thousands of businesses are in a similar position but the politicians “are not listening, are not interested in us”.

The Institute of Directors said last week that businesses were “tearing their hair out” over the lack of clarity on Brexit, while the Confederation of British Industry said hundreds of millions of pounds were already being diverted away from Britain because of business “despair”.

Loughlin is urging other businesses to speak out but he fears they could be deterred by the abuse that could result.

“We’ve done some media locally and we’ve had people calling customer service with abusive messages saying this is all our fault, we’ve had abusive comments on social media that we have had to block and delete,” he said.

“This is why businesses are scared to talk out. But if more business leaders did come out and said what was going on and explain that this is going to mean people are out of a job, this madness would be stopped tomorrow, I guarantee it.”

He said the decision to move would be heartbreaking. “I have a pregnant wife, my business partner has two kids, we all have mortgages. This is a massive upheaval, it’s a horrendous situation. But if we don’t put this in place, we have no business.”

He was part of the founding team that set up the company nine years ago, initially selling motorbike clothing. It diversified into adventure sports and leisure activities such as skateboarding and skiing, and now has a turnover of £20m a year.

“If there is no deal, we won’t be here,” he said. Half of the company’s sales are in Europe and, if Britain crashes out of the EU and defaults to World Trade Organization rules, the business will be dead.

There would be tariffs of 16.9% on footwear, 12% on T-shirts and jackets, 14% on bicycles and almost 7% on leather motorbike jackets and neoprene wetsuits, killing his competitiveness against his German and Dutch rivals.

“Any friction, any tariff of any description and we are not going to be in business. We are not selling anything unique, we are toe to toe with German companies selling the same product. [If] we have delays of two weeks, we are out of business. This is a business that does not work if the UK is not in the single market,” Loughlin said.

He was invited to Westminster to give a talk in Portcullis House about the challenges Brexit was posing to businesses in the west country. “Not a single Tory MP showed up,” he said. Jacob Rees-Mogg, a prominent Brexiter, is the MP for North East Somerset, a neighbouring constituency.

“They are not listening to us. They are not interested in us. There is a massive disconnect,” Loughlin said. “Nobody has any idea of how damaging this is to businesses.”