A new report says that businesses are “banging their heads against the wall” two years after trading began after Brexit.
The BCC said businesses were still trying to figure out how to do business with the EU and deal with more rules and regulations.
A separate report from the Center for European Reform says that Brexit may have hurt UK trade by about 7%.
But the government said that Brexit will “open up new opportunities for UK businesses.”
The Trade and Cooperation Agreement, made late on Christmas Eve, 2020, meant that goods and services could still move freely between the UK and the EU after Brexit.
The British Chambers of Commerce (BCC) asked 1,168 businesses about the agreement. Of those, 514 said they traded internationally or were affected by it in some other way.
More than half of these businesses said they needed help with the new rules, which means they must deal with new forms, checks, or other processes.
One store owner in Ayrshire said that leaving the EU made his business “less competitive with customers in the EU.” So, the store had to set up a base in the EU. It would have lost its business in the EU if it hadn’t.
A person who makes Dorsets said it’s been so hard to find parts to fix machines that they must bring them in from other countries.
As businesses worry about a possible recession, the BCC wants the government to have “an honest conversation about how we can improve our trading relationship with the EU” and look for ways to cut red tape before the deal is looked at again in 2026.
It has given 24 suggestions, such as making a quick decision about the future of the Northern Ireland Protocol, which sets the rules for doing business in Ireland.
Some economists say that this has kept people from investing in the UK because of the political uncertainty it has caused.
The Centre for European Reform said that changes related to Brexit could have cut UK trade by up to 7% this summer and hurt investment even more. This means that the UK’s GDP is 5.5% lower than it would have been if Brexit hadn’t happened.
The Office for Budget Responsibility (OBR), the government’s official forecaster, thought productivity would drop by 4%, which is worse.
But in March, the OBR said that long-term imports and exports would be 15% lower and that new trade deals with the rest of the world wouldn’t have a big effect on trade volumes.
In the last few years, businesses that trade across the UK’s borders have had to deal with a triple whammy: lockdowns around the world due to pandemics, a cost of the living crisis made worse by the war in Ukraine, and a change in trading arrangements with the EU, our biggest trading partner. So it’s been hard to figure out what the effects of Brexit are.
But the BCC report says that some companies should change the extra paperwork and checks.
In a previous study, researchers at the London School of Economics found that fewer goods are being sent to the EU. This suggests that some smaller companies may have yet to be able to export because they had to do more paperwork.
It also said that food prices in the EU had gone up faster than in other places, causing grocery bills to go up.
There are different opinions among economists about how Brexit will affect the economy.
But most people agree that the UK’s economy has remained the same since it left the EU.
Brexit Trade changes
John Springfield, the deputy director of the Center for European Reform, said that Brexit would make the economy £33bn smaller in the second quarter of 2022 than it would have been if the UK had voted to stay.
He also said that Brexit had slowed down the economy, which meant that the government had to raise taxes to find £40 billion more to pay for public services.
Other economists disagree with these numbers and say that it’s hard to know the effects of Brexit because of the pandemic and the cost of living crisis, both of which have been made worse by the war in Ukraine.
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David Henig, an expert on trade and director of the UK trade policy project at the European Centre for International Political Economy, said that small traders would be hurt the most.
The Brexit trade deal was called “the world’s largest free trade deal without tariffs and quotas” by the government.
But Mark Spencer, who is in charge of food, farming, and fisheries, said that “we can do more” to cut the red tape between the UK and the EU.
The High Court says the plan could make people come to the US illegally.
According to the High Court, the UK’s plan to give homes to millions of EU citizens is illegal because it could lead to illegal immigration overnight.
In a harsh ruling, the court said the plan broke the UK’s Brexit Withdrawal Agreement.
The group that looks out for EU citizens’ rights said that people could lose their rights if they don’t sign up in time.
The Home Office said that EU citizens like clear protections and would fight against the decision.
Since 2018, EU citizens who want to stay in the UK must undergo a two-step process at the Home Office.
Freedom of movement in the EU meant that many people from inside the bloc had never needed permission to be in the UK, which is how immigration laws work in other parts of the world. This is why they made this program.