Barriers to trade & small businesses: Case studies from the frontline
This meeting considered the impact of changing UK trade arrangements specifically on Small and Medium Enterprises (SMEs) across the country. There was a global concern that smaller companies find modern trade barriers disproportionately hard to overcome, and anecdotally it seemed that smaller UK exporters had been particularly badly hit by the changes to trade relations with the EU since January 2021, which could have had an particularly bad influence on some regions of the UK.
Witnesses were be asked about the experience of smaller companies trading in different sectors, with the EU and globally, in goods and services. The nature of the trade barriers were considered, and what government support was needed or how new agreements might help businesses to overcome them. We also considered whether this picture looks different across the different parts of the UK.
This meeting of the Commission took a different format to previous sessions with the first part of the session hearing from SMEs on their individual stories, before then taking evidence from trade experts on the wider impacts of new trading arrangements on SMEs across the country.
Liz Saville Roberts MP chaired this session.
Witnesses
Session One - Individual SMEs (10am-11am)
The session will hear from several SMEs from around the country who will give evidence of the impacts on their core business, of the changes to the UK’s trading arrangements that took place on January 1 2021. This session will start with each of the SMEs giving a brief introduction to their organisations, before participating in a Q&A style session with Commissioners.
The five businesses giving evidence to the Commission are as follows:
Kenneth McCartney, Managing Director, VerderLtd - Industrial pump manufacturer and distributor from Castleford, Yorkshire
Manufacturers and distributors of industrial pumps for a range of industries since 1955, from food to chemicals automotive.
Lyle Pyper, Managing Director, EA Martin & Sons Ltd - Hand tools wholesaler, Coleraine, Northern Ireland
Managing Director of a Wholesale Distribution Business of Hand Tools, based in Northern Ireland serving retail customers across Ireland.
Lee Jones, Managing Director, Fluorochem - Chemicals supplier from High Peak, Derbyshire
Fluorochem has been supplying thousands of intermediate chemicals for research and development to Pharmaceutical and Biotechnology Companies, Universities, Academic Institutes and Contract Research Organisations for 40 years.
Alan Mitchell, Founder & Company Director, Foxglide Sportswear, sportswear clothing manufacturer, Troon, Ayrshire
Foxglide is a sportswear brand, designing, manufacturing and retailing a range of custom clothing items. Foxglide sources fabrics from suppliers in Europe with whom Foxglide have developed close relationships.
David Thomas, Founder, Jin Talog - Organic gin producer, Carmarthenshire, Wales
Jin Talog is an award-winning organic premium gin producer from Carmarthenshire, which has received world-wide attention since starting. It is a farm-based, small scale business that started in 2018.
Session Two - Trade Experts from Representative Bodies (11am-12pm)
This session will take a more conventional format, with our witnesses participating in a Q&A style session focused on the wider impacts of new trading arrangements on SMEs. Our witnesses are as follows:
James Sibley, Head of International Affairs, Federation of Small Businesses
Suren Thiru, Head of Economics, British Chambers of Commerce
Russell Antram, Head of EU Negotiations, Confederation of British Industry
James Sibley, Head of International Affairs, Federation of Small Businesses (FSB)
James is responsible for FSB’s engagement on international trade, Brexit, the EU, and multilateral bodies including the WTO. James has been with FSB for four years, starting as an EU Policy & Public Affairs Advisor in 2017. Previously, James worked with technology entrepreneurs at Tech Nation, a public-private partnership focused on the UK start-up sector. James started his career in Brussels, where he worked at the European Parliament and the public affairs agency Europe Analytica. He holds a BA in History and an MA in European Politics, both from the University of Exeter.
Suren Thiru, Head of Economics, British Chambers of Commerce (BCC)
With a wide-ranging background in economics, Suren oversees the BCC’s economic thought leadership work and is a regular commentator on the UK economy featuring regularly on television and radio and in the national press. Suren also leads on the BCC’s policy work on access to finance, international trade, and tax. He also contributes to the BCC’s policy ideas for economic growth and government spending. Prior to joining the BCC, he spent over five years as an economist at Lloyds Banking Group.
Russell Antram, Head of EU Negotiations, Confederation of British Industry (CBI)
Russell is Head of EU Negotiations at the CBI (Confederation of British Industry) where he leads the UK’s premier business organisation’s work on Brexit and the negotiation of the future trading relationship between the UK and the EU. He has over a decade of experience working in European and British politics, with previous roles in the European Parliament, the Labour Party and the House of Commons.
INTRODUCTION
There are numerous barriers to trading internationally, ranging from finding markets and partners, obtaining insurance and visas, and arranging trade finance, to paying tariffs, meeting appropriate regulations, and ensuring delivery of goods through customs. These barriers ultimately mean higher costs for international compared to domestic sales, particularly when it comes to identifying and overcoming the barriers.
In general larger companies have several structural advantages in trading internationally. Extra costs can be spread over a greater volume of sales; they can afford to employ specialists in international trade; and they can also press governments to seek removal of particular trade barriers
ISSUES AND RECCOMENDATIONS
THE COMMISSION RECOMMENDS:
• Significantly increase the budget of the SME support fund and loosen its eligibility criteria, to ensure businesses can access the support they need
• Publish a government strategy for SME trade, with an action plan, including the appointment of a single minister dedicated to SME trade
• Establish a regular SME trade forum with representation from relevant businesses and representative organisations from across the devolved administrations and the English regions
• Prioritise resolution of issues particularly affecting SMEs trading with the EU, including by seeking to tackle customs delays
• Ensure the simplest possible bureaucracy for goods movements between Great Britain and Northern Ireland consistent with international commitments
• Create an SME portal as a single entry point to help international trade, similar to the EU's ‘Access to Market’ system, rather than having information spread across departmental websites.
KEY QUOTES
"In a nutshell if nothing is resolved this year, because we cannot afford to sit around and wait for things to potentially come up in twelve months or two years, we will relocate.” Lee Jones, Managing Director of Fluorochem
“Exporting jobs and losing business is the opposite of levelling up. It is the clearest sign that our new trading relationship with Europe is not working for small businesses or the people they employ." Liz Saville Roberts MP, Commissioner
"There certainly are some teething problems, so businesses filling in the wrong paperwork and that sort of thing, but in terms of balance, more of it is on the long term structural issues of the deal that means that exporting to the EU may not be viable for some businesses longer term.” Suren Thiru, Head of Economics at the British Chamber of Commerce
This powerful testimony from SMEs shows that the TCA is not equipped to deal with the complexity of modern trade and is in urgent need of improvement. SMEs account for three fifths of the employment and around half of turnover in the UK private sector and that they have not received sufficient clarity or support is unacceptable.” Naomi Smith, Chief Executive of Best for Britain