Taking the strain
How county is bracing itself for Brexit
Imports and Exports
ONE of the biggest changes facing businesses after Brexit are the restrictions regarding international trade.
While the stereotype of international trade is of it being largely carried out by city tycoons or by corporate figures at huge conglomerates, the reality is somewhat different.
Much of it is done by smaller businesses, bright entrepreneurs and young individuals who are passionate about their excellent products.
Small and medium-sized firms in the region say the prospect of additional paperwork and administration to their European customers could be a bigger deterrent to doing business with British firms than potential tariffs or custom delays.
MBrexit. ANY fear critical business relationships built over many years are being jeopardised by
One of those is Andrew Mcdonald of Mcdonald Consulting.
The South Gloucestershire-based businessman, who sells innovative and modern furniture to more than 25 countries, fears that increased paperwork would deter customers from using British firms.
He said: “The uncertainty over the customs situation is already affecting our business.
“I was travelling in Belgium, Holland and Germany and met eight customers who said they were having to consider sourcing from inside Europe to protect themselves from future import administration.
“My feeling is that it is the admin and not the tariffs that are making customers most nervous.”
He continued: “We send goods into Europe 10 to 15 times a week and the extra administration is a complete game changer for us.
“It would be hard to over-emphasise the negative impact a lack of customs union would make to our business.”
Changes to trade and exports have begun before leaving the European Union with people and businesses preparing to adapt.
The UK will be able to make its own trade deals, but they will not come into force until January 21, 2021.
What this means locally
FROM the moment of the referendum in 2016, British exports have fallen strongly behind the projected growth if there had been no Brexit vote.
They argue Britain has lost a significant share in global markets in terms of value due to the uncertainties and is poorer by as much as 13 per cent.
How have imports and exports changed in Gloucestershire?
GLOUCESTERSHIRE’S exports to the European Union plummeted last year, figures have revealed.
Latest government data shows 1,374 county businesses exported goods to the EU in 2017, bringing in £0.9billion to the economy.
That is down from 1,972 businesses in 2016 who exported £1.1billion worth of goods over the year.
It means the EU market was worth £200million less to Gloucestershire businesses in 2017 than the year before.
The 20 per cent drop is one of the steepest in the country during a period when the value of exports from the UK increased over the same period. Nationally we exported £162billion worth of goods to the EU in 2017, compared to £143 billion in 2016.
But research by the academic journal The Conversation has shown trade between the UK and the rest of the world is suffering. While the value of noneu exports increased nationally between 2016 and 2017 (from £148billion to £166billion), Gloucestershire saw a drop in trade. But it was nowhere near as significant as the fall in EU trade. Across the county, 1,094 businesses exported goods to non-eu countries last year, bringing in £4.1billion - a fall of £86million (2%).
Concerns over the final deal
AS Brexit talks continue, business people are discussing what the future holds.
Richard Butler, regional director of the Confederation of British Industry, said: “No-one in the EU wants a nodeal Brexit – that is the least favoured option.
“We have some success in getting Government to take on board the business issues.
“They have acknowledged the need for frictionless trade but we have not made as much progress as we would like on migration issues.”
Ian Mean, director of Business West in Gloucestershire, said the existing deal was just the beginning.
He believes the focus should remain on how people are affected by the final Brexit deal.
He said: “It is important, whatever our future relationship with Europe, that business does not have lots of extra paperwork and bureaucracy.
“I think it will be at least another year of negotiations on the real nitty-gritty of the deal before we can see our position clearly.”
Frank Myers, chairman of Herefordshire’s Business Board, said action was needed. He said: “We need to redouble our exporting efforts, especially if we can now sell anywhere. “What concerns me is the paperwork and how that will increase.
“I sold £1,400 of goods to Switzerland which they certified as being of EU preferential origin. I had someone from HMRC come to my office for four hours to check that was correct.
“I am concerned that kind of bureaucracy will get worse.” Now what?
MANY businesses across the UK are making contingency plans for Brexit.
Mini will stop production for a month in April, bringing forward their summer shutdown with concerns for many firms over supplies of components and materials.
CBI regional director Richard Butler said: “No company wants to be the one to stop Jaguar Land Rover’s production line – one major distribution company has even bought its own North Sea ferry so that it can continue to bring its lorries in and out of the UK from different ports.”
Business West surveyed 419 businesses across the West of England, Gloucestershire and Wiltshire, focussing on issues relating to Brexit.
It showed 79 per cent of businesses are not aking any specific measures in preparation for Brexit, while 16 per cent report doing so.
Eighteen per cent of firms say they require more information or assistance to help them prepare for Brexit, 24 per cent don’t know and 58 per cent say they do not need further information or assistance.
Among exporters, the need for more information or assistance is higher (26%).
Recent government figures show the UK economy could be up to 3.9 per cent smaller after 15 years under the current Brexit plan, compared with staying in the EU.
But a no-deal Brexit could mean the economy is 9.3 per cent smaller.
» The Prime Minister’s Brexit deal will be voted on in the House of Commons on December 11