Responding to an EU Select Committee inquiry into the UK-EU trading relationship, the Institute of Directors has today published survey data showing that 42% of businesses that trade internationally are now exporting less to the EU compared to the last five years, with 28% importing less from the EU.
The IoD’s targeted survey of business leaders in March also showed that these figures increase to 45% and 31% respectively when just looking at SMEs.
One of the primary challenges businesses have been facing is the administrative and cost-related burden from the implementation of new customs arrangements. In January 2021, 40% of traders found these customs changes challenging. By March 2022, this figure had risen to 44%. With new import controls introduced in January 2022, and businesses preparing for further controls later this year, firms are still feeling the pressure.
Emma Rowland, Policy Advisor at the Institute of Directors, said:
“Over the past year, UK businesses have lost EU clients and experienced a loss in revenue. EU firms have pulled out of the UK market due to increased trade frictions.
“The UK Government needs to work pragmatically with EU leaders to put business first. Restoring confidence on both sides of the Channel in cross-border trade is an urgent business priority. This means prioritising the effectiveness and development of digital systems like the Single Trade Window to alleviate the administrative and time-consuming burdens on businesses. Traders also need guidance that is clearer, more straightforward and more easily accessible.
“The UK Government should engage further with EU member states to encourage consistency in the application of the TCA, and further develop targeted support lines and funding for traders.
“The IoD is also calling on the Government to monitor its own progress in reducing friction at the border – to enable them to understand and react in real time to the impact on the lived experiences of importers and exporters.”