Government data confirms Brexit as a main driver of exports decline

More than a third of businesses say their prospects for growth in 2023 have been hampered by a decline in demand for British goods because of Brexit.

Brexit paperwork

A government-led survey, which collected information from over 3,000 businesses throughout the year, has confirmed that Brexit is a key reason for a decline in trade among British exporters.

The data shows that 43 percent of exporters of services and goods say they saw a decline in trade in 2022. This compared to just 26 percent of businesses who said their exports had increased. The reason most frequently cited behind the drop in trade in recent months is Britain’s departure from the EU.

In January 2021, the EU introduced strict border controls on all food exports from the UK, as part of the Brexit trade agreements with Europe. Consequently, many businesses halted trade with the EU due to the increased costs that came with the new border rules.

Red tape, including additional documentation, admin burdens and new customs procedures, as well as reduced demand for UK services and products, were among the most prominent concerns in relation to the impact Brexit has had on exports among some companies.

The data shows that more than a third of businesses say their prospects for growth in 2023 have been hampered by a decline in demand for British goods because of Brexit.

In relation to supply chain challenges, 17 percent of British exporters attribute issues to the ongoing impact of the pandemic. 16 percent say chain supply issues have been mostly caused by Brexit. Though the number of businesses attributing supply chain issues to the UK’s departure from the EU has grown each quarter, while those linking issues to Covid have decreased.

Separate research shows that Brexit is a leading concern for 52 percent of UK food and drink manufacturers. According to a survey by Ideagen, a regulatory compliance organisation, in 2023, Covid, commodity inflation, and Brexit, were among the top three risks faced by manufacturers.

“Food producers globally are navigating a volatile climate, and lack of clarity around post-Brexit food controls isn’t helping”, said Ben Dorks, CEO of Ideagen.

“The focus needs to be on supporting producers and the wider supply chain, not adding to the turbulence.

“Safe, healthy, more affordable food is in everyone’s best interest, and we urge those making decisions to set controls and guidelines that enable food producers to prioritise safety, and quality ahead of everything,” Dorks continued.

This damning data regarding Brexit’s impact of British businesses follows the news that salmon farmers face a £3m post-Brexit bill as the government announced it is to end the trial of a system designed to limit post-Brexit paperwork for fish exporters.

The procedure was aimed at saving traders time and money by digitising the paper health certificates required for all fish and chilled food being exported to Europe. It was also intended to save traders up to £3 million on post-Brexit paperwork.

However, the Department for Environment, Food and Rural Affairs (Defra) recently announced that the trial will end on September 30, and that there is no immediate replacement planned.

The announcement was met with disappointment among the salmon industry, which says the ending of the scheme will add to the red tape and costs of exporting salmon to Europe.

Tavish Scott, chief executive of Salmon Scotland, said: “We have been informed of a further delay to the introduction of an end-to-end digitised export paperwork system, which leaves salmon companies with ongoing red tape costs which have already been racking up for more than two-and-a-half years.

“Farm-raised salmon is the UK’s largest food export, and we need governments to reduce the burden on our sector so that we can grow sustainably, produce more nutritious food, create highly skilled jobs, and boost the Scottish and UK economies,” Scott added.

Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward

Image credit: YouTube screen grab

Comments are closed.