North East businesses report post-Brexit troubles in new survey

North East businesses have had difficulty trading with the European Union since Brexit, according to a new survey.

Three quarters of respondents have said the United Kingdom's withdrawal from the bloc has had either a negative or very negative impact on their companies.

The survey was carried out by the North East England Chamber of Commerce, which was published this morning, on the fifth anniversary of the referendum on EU membership. It was carried out from April 26-May 24 and had 109 respondents.

It looked at a wide range of issues from what was difficult in the new arrangements, any advantages of Brexit, cost implications and logistics.  

Jack Simpson, the chamber's training and global network adviser said: "Our survey analysed how businesses were finding EU trading six months on from Brexit.  The results demonstrated clearly how challenging companies have found international trade, with a plethora of issues depending on their sector and products." 

Other key figures from the survey highlighted that 37.5 per cent of respondents said their EU sales had reduced since the start of the year, 45 per cent said it has stayed the same and 17 per cent reported an improvement.

Businesses which have only traded in the single market, now have to go through customs processes and more than half of the respondents said they had found these difficult to deal with.

As well as the increased paperwork the tariff and administrative customs costs have also caused problems with 41 per cent of businesses struggling to absorb the new financial burden. Only five per cent said they were able to absorb new costs.

The logistics of trading with the EU has also proved challenging according to the results.  A total of 66.7 per cent of respondents confirmed they had been impacted by port congestion, delays or a shortage of hauliers since January. There were reports of price inflation for containers and shipping, impacting cashflow and lead times for manufacturing supply chains.

Another issue raised by the respondents was the short timescale - seven days - they had to fully understand the EU deal before it was implemented.

Mr Simpson added: "We believe these results show larger businesses with more international trade resources, who have dealt with countries outside the EU, have coped with Brexit more easily than others who had no previous knowledge or experience. Respondents also experienced difficulties due to matters outside their control, for example, confusion over the required paperwork and shortage of experts, such as vets, to approve movements

The chamber now plans to write to the Prime Minister and Lord Frost to ask for a continuation of simplified border checks currently done on a reciprocal agreement for ease, so they do not become more complex and better, more simplified guidance.

A Government spokesperson responded to the chamber's survey.

They added: “As well as operating export helplines, running webinars with experts and offering businesses support via our network of 300 international trade advisers, the Government has launched the £20m SME Brexit Support fund and is delaying full import border checks until 1 January 2022”.

Analysis by our Political Correspondent Tom Sheldrick:

Much of the last five years has been taken up with political battles at Brussels and Westminster. Many rules only changed after the end of the transition period in January, and others are still gradually being introduced.So while our future trading relationships are still being worked out, the clearest impacts of the referendum so far have probably been on our party politics - with Conservative gains and Labour losses in the North East closely connected to Brexit.

As polling elsewhere backs up, not many minds have changed on the merits of leaving the EU, and divisions are perhaps as deep as ever. Inevitably, what we have now is not the Brexit that the opposing campaigns promised / warned of back in 2016.

A region particularly reliant on exports, the North East's economy was predicted to be the hardest hit by various forms of Brexit.

The early effects though have been hard to distinguish from those of the pandemic, and Teesside particularly is getting more government investment in the meantime, perhaps linked to the call for help the 'Leave' vote presented.

So, when it comes to the full consequences of Brexit, there's a lot still to be played out.