The British Chambers of Commerce (BCC) says this week’s Leaders’ Summit in Brussels must finalise deals that fundamentally lower the cost of doing business.
At a bare minimum, it believes Andy Burnham must come back with agreements that:
- Remove charges for exporting and importing animal and plant products
- Create a single carbon trading market, free of costs and red tape
- Establish a capped youth experience scheme
BCC research shows that for many exporters the UK-EU trade relationship is still failing to deliver, almost six years after Brexit.
Its latest survey, of more than 1,000 firms, found that many are still struggling with a forest of Brexit red tape which is continuing to grow.
Businesses face customs, VAT, regulatory and mobility barriers, alongside rising protectionism, global subsidies and the EU’s emerging ‘Made in Europe’ agenda.
Firms are desperate for some of these barriers and their associated costs and charges to be removed:
- More than half of exporting businesses (56%) want EU customs paperwork and delays removed so they can grow. This rises to 57% of manufacturers.
- More than two-fifths (43%) of exporters identify tariffs, quotas or rules of origin as barriers to growth in the EU.
- More than a third (35%) of exporters cite EU VAT requirements as a barrier.
- Only 14% of exporters said they faced no barriers.
The Business View
When businesses were asked what would change if trade barriers were removed, they said:
“We would increase our sales revenues and reduce our costs.”
Small manufacturing exporter firm in Devon
“Massive cost reduction and ability to compete freely and fairly again.”
Micro retail exporter in West and North Yorkshire
“Probably 25% cost reduction on associated direct shipping costs and legal VAT/accounts costs, reduced warehouse costs in EU, potential revenue increase by 15%.”
Small manufacturing exporter in Suffolk
“My turnover would double if we were to work closely with Europe, but I often find that in the small print the red tape and resulting increase in costs is not worth it to me.”
Micro Retail Exporter in West Cheshire and North Wales
“I would anticipate a cost reduction of between 10-15%.”
Larger IT exporter in London
Shevaun Haviland CBE, Director General of the BCC, said:
“Businesses need a break, and the Leaders’ Summit can finally deliver one.
“Since the pandemic, firms have been rocked by shock after shock, from soaring energy and fuel bills to new tariffs and tax increases.
“Brexit has then added a whole extra layer on top of that, and its costs and bureaucracy are continuing to mount.
“But the three deals we are asking the Prime Minister to secure could make a real difference to our SMEs.
“Charges for health certificates and other paperwork add thousands of pounds to the costs of every container of animal and plant products we send to the EU. Whilst linking the UK and EU emissions trading schemes would remove hundreds of millions of pounds in fees and administrative burdens.
“As well as easing the cost pressure on businesses, these three agreements would also grow the economy by an estimated £12bn by 2040. To put that in context that’s approaching the total fiscal headroom the Chancellor has provided in the 2026 Budget.
“There are other big issues like Made In Europe, enhanced defence co-operation, rules of origin for electric cars, and our long-term relationship that also need to be addressed.
“We know the government is very much alive to these. But striking the three immediate deals will go some way to giving hard-pressed businesses that trade with the EU some much needed breathing space.”
The BCC’s report on recommendations for the EU Reset can be found here.