OneWorldExpress
Even with all the outside pressures and challenges faced by UK businesses over the last few years, it is impossible to ignore the overwhelming influence of Brexit.
Despite nearly half a decade to prepare, the UK’s withdrawal from the EU caused a great deal of disruption for UK businesses. Indeed, the eleventh-hour resolution to negotiations left most with precious little time to adjust their operations.
Naturally, then, these changes to customs rules, import/export charges and the administrative process required to navigate export markets, resulted in an immediate slump in exports from the UK in January 2021. Given the need for improvisation in response to its implementation, it is challenging to assess how the UK has handled its first year of Brexit – and not less so for the ongoing pandemic and pressure on global supply chains.
Brexit 2022
With further changes to customs rules taking hold at the turn of this year, export businesses will hope they have adapted well enough to take these in stride. The measures include the ending of a permitted 175-day delay on customs declarations to HMRC, and more stringent requirements on country of origin documentation.
This makes for an opportune moment to assess in finer detail how businesses fared in the first stage of Brexit. To delve into this issue, research conducted by One World Express explored business leaders view on the relationship between Brexit and their operations.
The research found that one quarter (25%) of UK businesses saw a significant impact from Brexit, whilst the majority (73%) of those surveyed claim to have seen no benefits from UK’s exit from the EU, to date. Such figures challenge the assumption that Brexit has changed little so far. In fact, there have been numerous reports of significant upheaval due to complex layering of new administrative processes, particularly when exporting or importing between the UK and EU. As the cost of exporting has largely held firm, those with substantive interest in accessing global markets have not been priced out of doing so.
Another notable finding was how the last year stacked up with 2020 in business terms. Despite what most would consider an easier year on the Covid-19 front due to more liberal social restrictions, fewer national lockdowns and increased consumer spending, a majority (54%) of respondents felt 2021 to have been a more challenging year in their business than 2020 had been.
Several factors are likely to contribute to this. In particular, global supply chains faltering under the weight of longstanding pressure, and the UK’s infrastructure showing little resilience to this change, provided a barrier for exporting firms. While Brexit itself had done little to accelerate the cost of doing business, supply chain capacity was stretched too far for reliable overseas trade – with convoluted administrative processes and customs checks playing a significant role in the bottleneck.
In One World Express’ research, despite the challenges of the pandemic, new Brexit rules, and supply chain disruption, more than one third (34%) of respondents saw increased overseas demand for its goods in 2021. Meanwhile, over a quarter (26%) consciously moved away from importing or exporting with the EU this year, suggesting that UK businesses are opening themselves up to possible trading opportunities beyond Europe.
While the prospect of new Covid variants, and with it new social restrictions and limitations applied on businesses looming ominously over businesses, it would be foolish to make predictions with any certainty. Indeed, nearly half (49%) of business leaders consider new variants to be the distinct greatest threat to their operations in 2022.
Even so, looking forward into what we should hope will be a calmer 2022, a few key patterns indicate a potential direction of travel for a confidently post-Brexit Britain. While businesses will naturally be guarded following Brexit and the pandemic, the figures suggest they are beginning to adapt to life outside of the EU, and exploring more of the potential benefits of the new arrangements – in particular, expanding into further-flung global markets.
