UK companies feel post-Brexit rules pain


At the height of the 2016 Brexit referendum campaign, businesses were promised that leaving the EU could deliver a regulatory dividend worth more than £12bn a year, if the British government used its newfound freedom boldly. And although the business world overwhelmingly favoured remaining in the EU, it welcomed the prospect of lighter touch regulation when Britons voted to leave. The Institute of Directors found that 60 per cent of its members wanted to reduce the volume of “unnecessary red tape” from Brussels. Little over a year since the UK’s legal exit from the EU single market, on January 1 2021, Britain’s leading business organisations report that members are tired and frustrated by the lived experience of Brexit. Small businesses with less time, money and staff to absorb the costs of regulatory requirements — which had hoped to gain most from post-Brexit deregulation — have found it hardest to adapt to the customs and export rules that apply when trading with the EU as a “third country”. Mike Cherry, chair of the Federation of Small Businesses (FSB) says: “Small firms were promised that one upside of leaving the EU would be reduced red tape. They live in hope of delivery.”  The British Chambers of Commerce has been equally scathing. In a report to mark the end of the first year of the implementation of the EU-UK Trade and Cooperation Agreement, the BCC found that nearly half of all members surveyed had struggled to trade with the EU. The difficulties include the bureaucracy of the EU and the new UK regulatory requirements — such as the UKCA quality control mark and the creation of a “UK Reach” chemical safety database — that duplicate EU rules for no obvious commercial gain. These systems were born of the UK decision to prioritise full legal separation from Brussels, and the EU’s determination — explicitly stated by Michel Barnier — that the UK should lose its position as a “regulatory and certification hub” for the EU single market.

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Financial Times, 28-02-22