Almost half of UK businesses that traded with the EU before Brexit are trading less or have completely stopped trading with the bloc since Britain’s exit from the customs union in January.
In the latest blow to the British economy, 16 per cent of UK businesses took the decision to partially or entirely move their EU operations inside the single market post-Brexit, according to an Institute of Directors survey.
The data emerged as UK-EU trade significantly declined at the beginning of the year because of additional bureaucracy caused by Brexit, and EU imports to the UK are far behind December 2020 levels.
But a government spokesperson told City AM that the exporting process is “set by the EU” and that the government will “continue to give businesses the support they need to trade effectively with the EU”.
The spokesperson mentioned an Export Support Service has recently been launched to help UK exporters “access information” to help them export to the continent.
They added exporters have been having access to webinars and a network of 300 trade consultants in the light of Brexit.
Meanwhile, UK business leaders have warned Boris Johnson’s government against suspending the Brexit deal with the EU, saying a “devastating” trade war is looming over Britain’s economy over the next few weeks.
Brexit’s negative impact on the economy could worsen
It comes as Brexit minister David Frost warned last week that the government could still suspend the Northern Ireland Protocol if certain demands are not met – such as scrapping the European Court of Justice from overseeing the Protocol.
But, according to experts who spoke to The Independent, the bloc is ready to take immediate retaliatory action against the UK if the government pushes ahead with its ambitions – and UK business chiefs are terrified of the outcomes.
Last month, it emerged that Brexit red tape caused an eye-watering £17 billion loss from trade with the EU in only three months.
Despite promises from the Leave campaign that red tape would fade after Britain quit the EU, UK companies have had to fill in an astonishing 48 million customs declarations and 140,000 export health certificates in the eight months since the UK quit the single market and customs union , according to the National Audit Office (NAO).
UK business losses
In September, UK businesses which declared bankruptcy hit the highest number since March 2020, according to the government’s own figures.
And a report by the National Federation of Fisherman’s Organisations revealed that UK fisheries are facing £300 million in losses.
According to The Brexit Balance Sheet report, Britain’s fishing fleets will experience losses of £64 million or more every year, amounting to £300 million by 2026.
Although the government claimed the fishing industry will benefit from an extra £148 million by 2026, the report said the financial increase is most probably not going to be usable and is thus of little value.