The UK’s small and medium-sized businesses are seeing their EU markets disappear as they struggle to combat increased post-Brexit red tape and trading costs.
At the same time, EU businesses exporting into the UK market are benefiting from a lack of controls.
In an interview given to The Loadstar, one small business owner said that: “EU warehousing is the only way to get around costs and bureaucracy – it also means jobs and money go abroad – but if you’re small it’s not viable.
“Before Brexit, a third of our direct mail orders were in the EU. That went to nothing and we are slowly having to build it back up, but this means charging our direct mail orders from the EU half the price, with us covering the VAT.”
And those increased costs, or indeed reducing prices and swallowing taxes to remain competitive, have seen many businesses fail. In fact, between 2020 and 2021, 6.5% of UK businesses closed – the largest decline in 20 years. The pandemic had a hand to play in that of course, but many SMEs have directly blamed the departure from the EU as shutting off a core market.
As the interviewee to Loadstar pointed out: “The increased cost of transport means that for our product, the cost has increased three to four times. Then there are the cultural differences; we are simply not going to sell many jazz records in Indonesia or Thailand, and you have to take into account the poverty gap with these new global markets – Europe is rich, while Asia, Africa, South America are poor.
“SMEs can’t wait 30 years for a vague ‘levelling-up’ promise. That’s OK for the likes of Shell, ICI, Unilever, GM, but not for us.”