Brexit red tape costing jobs and pushing SMEs over the brink, MPs warned

·2-min read
Drone point of view
Small businesses have raised concern that 'exporting to the EU may not be viable for some businesses longer term.' Photo: Getty Images

SMEs have warned they are facing an "existential threat" from Brexit red tape, which is costing them jobs and business. They want the government to appoint a dedicated minister to address their concerns.

At a session of the cross-party UK Trade and Business Commission on Thursday, small businesses said they are worried about increased costs and falling incomes.

Suren Thiru, head of economics at the British Chamber of Commerce said: "There certainly are some teething problems, so businesses filling in the wrong paperwork and that sort of thing, but in terms of balance, more of it is on the long term structural issues of the deal that means that exporting to the EU may not be viable for some businesses longer term."

In his evidence to the commission, Lee Jones, managing director of chemical supplier Fluorochem, said: “We’ve investigated every possible solution… In a nutshell if nothing is resolved this year, because we cannot afford to sit around and wait for things to potentially come up in twelve months or two years, we will relocate."

He added: "It is impossible to remain competitive in Europe by shipping from the UK using the current methods... It’s an absolutely crazy system."

Read more: 90% of UK car manufacturers struggling with new Brexit rules

The commission will use Thursday's evidence to inform urgent cross-party recommendations to the government on how small businesses can be better supported. 

Small businesses want a new minister in the Department for International Trade to help them navigate challenges following Britain's withdrawal from the EU.

Recent polling by Best for Britain showed that two-thirds (66%) of small businesses back greater cooperation with Europe on trade.

The majority of British companies have experienced some form of trade disruption with the European Union following Brexit, and many firms expect these issues to have long-term consequences, according to research from EY and London First last month.

The report found customs and supply chains (72%), tax and VAT (70%) and regulation (68%), are the three most common areas where companies have seen disruption.

Businesses also highlighted delays to getting goods to destinations (43%), having to re-register with regulatory bodies in the UK and EU (37%) and dealing with changes in contracts (38%) and data (34%), as some of the key challenges.

Earlier it was also reported that businesses are pulling out of Europe due to costly new paperwork associated with Brexit.

Watch: 10 ways to Brexit proof your finances

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