Credit Management March 2024

THE NEWS
A fifth of UK SMEs want
to re-join EU as new
checks come into force
UK SMEs trading abroad
remain hamstrung by
circumstances borne
out of Brexit, as the
UK's withdrawal from
the European Union approaches its fouryear
anniversary.
New research from Bibby Foreign
Exchange (BFX) suggests that more than
half (55 percent) see the ongoing impact
of Brexit as a significant challenge,
ranking second only to inflation as the
key issue hampering their growth.
Michael McGowan, Managing
Director of BFX, says that the burden of
Brexit is growing, not shrinking: “Brexit
is stifling the growth of thousands of
UK exporters and importers who also
face a myriad of supply-chain Issues as a
result conflicts in Europe and the Middle
East,” he explains. “Combined, such
geopolitical events are placing further
pressure on those trading overseas."
BFX’s inaugural Trading Places
report was published in 2017 during
the aftermath of the EU Referendum.
At that time, 41 percent of importers
and 29 percent of exporters said Brexit
was having a negative impact on their
business. Today, this perspective is true
for a third of importers (62 percent) and
exporters (63 percent).
Half (49 percent) of SMEs report
that the cost of trading with customers
and suppliers in the EU today is more
expensive and less profitable today.
Meanwhile, 40 percent cite tariffs,
customs and trade barriers as key issues
facing them, leading more than a fifth
(20 percent) to say they would be in
favour of a new government taking steps
to re-join the EU.
Findings come as new post-Brexit
border checks for UK exporters come
into force: “Despite the resilience of the
UK’s SME population, many of those
who trade abroad are clearly struggling
to operate as effectively as they did
before Brexit. Held back by increasingly
complex customs and clearance processes,
this research sheds light on the ongoing
impact of Brexit on SMEs. With new
post-Brexit border checks on goods set
to be in place this month - starting with
the Border Target Operating Model, and
physical checks beginning in April - this
problem only stands to intensify."
Despite a challenging environment,
Europe remains the primary trading
bloc for UK businesses, with six in ten
(61 percent) trading with EU member
countries, rising to 69 percent for those
with turnover of between £500,000 and
£1 million.
However, for a growing number,
there has been a discernible shift away
from trade with the EU. Since Brexit,
40 percent trade less with companies in
the EU and 21 percent trade more with
customers and suppliers outside of the
EU.
Looking ahead to the 2024 general
election, two-fifths (44 percent) say
they’d like a new government to revise
the current Trade and Cooperation
Agreement between the UK and the EU
to improve trading conditions with the
bloc. Conversely, more than a third (36
percent) would like a new government to
establish more trading agreements with
countries outside the EU.
“The growing desire to trade with
non-European partners suggests a
‘needs must’ pragmatism adopted by
UK businesses dealing with the ongoing
impact of Brexit,” Michael onncludes.
‘‘Yet SMEs’ appetite for closer ties with
the EU couldn’t be clearer. If policy
makers and government fail to listen
to and prioritise the views of small and
medium size businesses trading overseas,
the subsequent losses could be dramatic
both for individual businesses, and
national economic growth.”
“The growing desire to trade with
non-European partners suggests a
‘needs must’ pragmatism adopted
by UK businesses dealing with the
ongoing impact of Brexit.”
Brave | Curious | Resilient / www.cicm.com / March 2024 / PAGE 8