MOST small and medium-size businesses in the UK say Brexit has had a negative impact, with hundreds reporting having to reduce hours, make staff redundant or even close, according to new research.
A survey of small to medium-size firms, carried out by campaign organisation European Movement UK, found 93.6% of respondents said Brexit had affected them negatively and only 3.2% felt positive about leaving the EU.
More than half said new red tape had made trading with the EU increasingly difficult, while 40% highlighted problems with finding staff since the loss of freedom of movement.
The report also highlighted “sobering” accounts from companies which have had to move fully or partially to the EU or are considering such a move.
Hundreds also reported having to reduce workforce hours, make staff redundant or even close entirely due to the barriers created by leaving the EU, it found.
One firm's experience highlighted in the report is cable production firm Ten 47 Limited, which is based in Dysart, Fife – and expanded to Milan in Italy after some EU customers warned of the need to “move it or lose it”.
Managing director Keith Gordon told the Sunday National: “The two main [UK] parties - the Tories and Labour - are both against joining the single market and customs union.
“So it's going to be a long-term drag on the economy and that is just a reality people should be honest about rather than lie and say they're going to make it work.
“If you shoot yourself in the foot, you're going to run slower.
“If you put up trade barriers, you're going to damage the economy - it's only how much.”
Gordon (above) said one major difficulty had been that Brexit had been pushed through during the pandemic – which made opening a base in another country even more difficult.
He said ongoing issues include higher transport costs, as well as issues caused by extra bureaucracy.
“Now that we are outside the EU, there is different paperwork, so you have bundles of paper and the goods are checked," he said.
“So they could be stuck – we have had incidents where they have been stuck in customs for two weeks.
“And it doesn't even have to do anything to do with your goods, because if they are bundled together with something else, that whole shipment is tied up.
“If you are supplying for an event, sometimes they order at the last minute and they need those parts.”
The report, titled Brexit And Businesses: In Their Own Words, found more than 70% of respondents in the survey anticipated their situation will get worse over the next three years, assuming the UK’s trading relationship with the EU stays the same.
More than nine out of ten believe restoring access to the EU single market and customs union would help their business.
Other testimonies from Scottish businesses highlighted in the report include from Dr Paul Jourdan, CEO of Edinburgh-based finance company Amati Global Investors.
He said: “Leaving the EU has left the UK industry a great deal weaker than it was, and this weakness compounds every year.
“Lower tax revenue as a result has already undermined the Government’s ability to pay for the public services the country wants.
“The only real solution in the long run is to rejoin the single market, albeit politicians will probably try everything else first.”
Paul Welham at CereProc Ltd, an Edinburgh-based artificial intelligence company, said business with the EU had gone down by around 40% since Brexit.
“We have a smaller workforce now, and Brexit has made it harder to deal with our EU customers in several ways, especially on occasions where a physical shipment is required,” he said.
“It seems that potential new customers based in the EU are less willing to deal with UK companies, as they don’t understand the processes involved.”
SNP MSP Kenneth Gibson said: "These findings confirm what everybody already knew - Brexit has been an unmitigated disaster for businesses in Scotland.
"Losing access to highly skilled staff and vital trade networks, in addition to increased red tape, has hammered Scottish business - and the blame lies firmly at the door of the Westminster parties.
"While Labour, the Tories and even the LibDems are happy to impose a ruinous hard Brexit on us, Scotland can choose a different path with independence.
"Independent EU countries [similar to] Scotland are wealthier and fairer than the UK, so with all our resources and talents why not Scotland?"
Sir Vince Cable, vice president of European Movement UK, said the research shows “just how much ongoing damage is still being done by Brexit”.
He said: “Devastating barriers to trading with the EU have forced some companies out of business.
“Red tape, lack of workers, huge hikes in overheads - Britain’s small and medium enterprises have sustained a disproportionate amount of the damage.”
A UK Government spokesperson said: “Our exports to countries in the EU are on the rise, increasing by 17% in current prices year-on-year in the 12 months to June.
“We are helping businesses of all sizes to sell their goods and services abroad, and a record-breaking 3225 companies took part in this month’s International Trade Week, which offered 180 tailored events and expert advice on exporting to countries the world.
“We’re also helping firms make the most of new trade deals that post-Brexit freedoms have opened up, including new agreements with Australia and New Zealand, innovative pacts with US states like Florida and Washington, and the exciting Trans-Pacific Partnership trade bloc, a market of 500 million people, which the UK joined this year and is now worth a combined £12 trillion in GDP.”
