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UK businesses are calling on the government for more help exporting to Europe, after new research found that many firms helping the EU trade deal was not them grow or increase sales.
The British Chambers of Commerce (BCC) has surveyed 1,000 businesses, and found that a majority said it has created problems such as pushing up costs, increasing paperwork and delays, and putting the UK at a competitive disadvantage.
Just 8% of firms agreed that the Trade and Co-operation Agreement (TCA) was ‘enabling their business to grow or increase sales’, while 54% disagreed.
For UK exporters 12% (or just one in eight) agreed that the TCA was helping them, while 71% disagreed.
The BCC received 59 comments on the merits of the TCA, which was agreed on Christmas Eve 2020, including:
- It had allowed some companies to continue to trade without significant change
- It had encouraged firms to look at other global markets
- It had provided stability to allow firms to plan.
But this was outnumbered by 320 comments criticizing the deal, such as:
- It had led to rising costs for companies and their clients
- Smaller businesses did not have the time and money to deal with the bureaucracy it had introduced
- It had put off EU customers from considering UK goods and services – due to the perceived costs and complexities.
William Bainhead of trade policy at the BCCsaid smaller firms are particularly suffering from the change to trading relationships between the UK and the EU.
“This is the latest BCC research to clearly show there are issues with the EU trade deal that need to be improved.
“Nearly all of the businesses in this research have fewer than 250 employees and these smaller firms are feeling most of the pain of the new burdens in the TCA.
“Many of these companies have neither the time, staff or money to deal with the additional paperwork and rising costs involved with EU trade, nor can they afford to set up a new base in Europe or pay for intermediaries to represent them.”
The BCC has made a number of suggestions, including moves to reduce the complexity of exporting food, and tackling limitations on business travel and work activities in the EU.
Last week, MPs on Parliament’s spending watchdog that Brexit red tape has damaged Britain’s trade with the EU. They fear the situation could worsen unless the government works with Brussels to reduce hold-ups at UK ports,
A Government spokesperson, though, says businesses are getting support to help with Brexit changes:
“The Trade and Co-operation Agreement is the world’s biggest zero-tariff, zero-quota free trade deal. It allows businesses in Britain to trade freely with Europe while also being able to seize new trading opportunities with countries around the world.
“We’ve always been clear that being outside the single market and the customs union would mean changes and that businesses would need to adapt to new processes. That is why we are ensuring that businesses get the support they need, including through the free-to-use Export Support Service.
“Goods exports to EU nations were 4% higher last year compared with 2020. However, given the Covid-19 pandemic, global recession and supply chain disruption, it is still too early to draw any firm conclusions on the long-term impacts of our new trading relationship with the EU.”
But there is evidence that UK trade has weakened over the last few years. UK exports of goods to the EU were down £20bn last year compared with the last period of stable trade with Europe, according to official figures marking the first full year since Brexit.
Elsewhere today, companies such as Nestlé , Reckitt Benckiser and Standard Chartered are reporting results.
European markest are set to open a little lower, with the Ukraine crisis firmly in focus.
The US has said that Russia has another 7,000 troops to the border, while Ukraine has denied claims by Russian-backed separatists that it has conducted mortar attacks on their terrirory.
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