UK business still feels the Brexit blues | Daily News Byte

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Anti-Brexit demonstrators waving EU and Union flags are reflected in a puddle in front of the Houses of Parliament in London on March 28, 2018. Swati Dhingra, a member of the Bank of England’s monetary policy committee, told MPs last month that there is “a much bigger slowdown in trade in the UK than in the rest of the world” for Brexit. Photo: Reuters/File

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Anti-Brexit demonstrators waving EU and Union flags are reflected in a puddle in front of the Houses of Parliament in London on March 28, 2018. Swati Dhingra, a member of the Bank of England’s monetary policy committee, told MPs last month that there is “a much bigger slowdown in trade in the UK than in the rest of the world” for Brexit. Photo: Reuters/File

Two years after Britain’s departure from the European Union, UK business bosses are reeling from the costs of Brexit, with some voting to sever ties with Brussels.

“It’s cost, cost, cost with no benefit,” noted Adrian Hanrahn, chief executive of Robinson Brothers, a small chemicals company based in central England and for which the EU is a key market.

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The problem is not customs duties, which have been largely eliminated by a post-Brexit free trade agreement between London and Brussels, but the mountain of new regulatory paperwork.

“We’ve probably added an extra 25 percent to our administrative costs now to deal with the changing paperwork of getting things to and from the EU,” Hanrahan told AFP.

The company employs 265 people, producing chemicals used by various sectors of the food, electronics, pharmaceutical and other companies.

Robinson Brothers exports about 70 percent of its products, more than half of which goes to the EU.

Companies are not alone in struggling with the consequences of Brexit, with 56 percent of UK businesses facing difficulties adapting to the new trading rules, the British Chambers of Commerce said on Wednesday.

“Businesses feel like they are banging their heads against a brick wall because nothing is being done to help them,” said BCC director general Shavon Haviland.

“The longer the current problems go unchecked, the more EU traders go elsewhere, and the more damage there is.” Prime Minister Rishi Sunak’s government has said it believes the UK economy has entered a recession due to sky-high inflation.

While it often blames Russia’s invasion of Ukraine for rising energy prices, analysts claim that Brexit has also driven up costs.

“There is good causal evidence that the devaluation of sterling immediately after Brexit (vote for 2016) raises inflation, especially for goods that we import a lot,” London School of Economics researcher Nikhil Dutta told AFP. London School of Economics researcher Nikhil Dutta told AFP.

He added that new trade deals, such as those with Australia, are “minor”.

Swati Dhingra, a member of the Bank of England’s monetary policy committee, told MPs last month that Brexit was responsible for “a much bigger slowdown in trade in the UK than in the rest of the world”.

According to Jonathan Portes, an economist at King’s College London, “there is reasonable agreement that Brexit has reduced UK trade by perhaps 10 to 15 percent compared to the no-Brexit scenario”.

The government’s own economic forecasting body, the OBR, estimates that Brexit will reduce the country’s long-term output by up to four per cent.

The loss of EU workers in sectors such as health, hospitality and agriculture is complicating matters, even if some of those returning home have been replaced by workers from non-EU countries.

As a result, some high-profile bosses who voted for Brexit are calling on the government to introduce new and tougher immigration rules.

“In terms of immigration, it’s definitely not the Brexit I wanted,” Simon Wolfson, the head of clothing giant Next, told the BBC last month.

Tim Martin, boss of pub group JD Wetherspoon, has a similar view.

For Hanrahan, the Brexit fallout raises questions about whether his company can survive.

“If this continues, we will have no choice but to reduce our offer to stay in business.

“We have two or three very large German clients who tell us they are not going to come to us anymore because it is too complicated for them to work with anyone in the UK.”

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