Written By:
Richard Selby
Chair
IoD Wales
Richard Selby is the co-founder of Pro Steel Engineering and chair of the IoD in Wales. He looks at the impact of Brexit, six months on.
Almost a third of companies that trade with the EU have suffered a decline or loss of business since post-Brexit rules took effect on January 1, according to a recent survey conducted by the IoD for the Financial Times.
The survey also found that 17% of UK companies that previously traded with the EU have stopped — either temporarily or permanently — since the start of the year. What’s clear is that six months on, many businesses are still wrangling with the challenges of our new relationship with the EU.
Our survey asked 651 companies to give their assessment of the impact of Brexit so far. Of those companies that trade with the EU, the research has found that:
- 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 1 January
- 17% of businesses that previously traded with the EU have stopped, either temporarily or permanently, since the start of the year
- Nearly a quarter of businesses that trade with the EU have had to relocate some operations or staff
- About two-thirds of businesses anticipated that new UK customs controls would have a negative effect on trade when they are implemented in January
- 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
- 17% of companies said that Brexit made them more likely to invest in their businesses, compared to 15% who said it made it less
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.
In fact, the FT reports that teething problems following Brexit are now becoming permanent pain for many businesses who are facing supply chain delays, increased paperwork and additional costs.
However, it is hoped that the announcement last week of new legislation to replace EU rules will result in more support for businesses. The Subsidy Control Bill will replace EU-wide state aid rules, which require member states to seek approval for government assistance to firms.
Designed to allow the government to help companies with grants or loans faster, it has been dubbed “the most important bit of post-Brexit legislation yet” with the government saying that it will judge cases for support on whether they deliver good value for money and help hit targets such as “levelling up” and decarbonising the economy.
One thing is for sure. 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.
