Tak­ing the strain

How county is brac­ing it­self for Brexit

Gloucestershire Echo - - BUSINESS -

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.

Cut­ting ties?

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

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