UK export slump prompts calls for action

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Date: 13 April 2021

Two business owners look at their export order list

Both the Federation of Small Businesses and the British Chambers of Commerce are calling on the government to do more to support exporters as new trade figures show how far UK exports have fallen.

The latest data from the Office for National Statistics (ONS) shows that total UK exports dropped by 10.3% in February 2021 compared to the same month last year.

At the same time, the Trade Confidence Outlook for Q1 2021 from the British Chambers of Commerce (BCC) has revealed that a worrying four in ten (41%) UK firms are reporting decreased export sales.

The hardest hit sectors are hotels and catering (where 81% of firms reported a decrease in export sales) and retail and wholesale (where 60% said the same). Among production, manufacturing and construction firms, 36% reported decreased export sales, with 27% reporting an increase and 37% reporting no change.

Not surprisingly, respondents cited Brexit and the impact of COVID-19 as the biggest causes of problems in trade. Firms told of issues such as shipping delays, increased cost of transporting goods and extensive paperwork requirements. However, many say the problems are structural in nature rather than short term issues that are likely to improve.

Alfred Van Pelt from Something Different, a clothing and accessories wholesaler based in Somerset, said: "Since 2021 our sales to the EU have collapsed dramatically. European customers, whether individuals or businesses, are reluctant to buy from the UK. Not only did this cause an immediate drop in turnover and the need for redundancies, but also killed a massive growth opportunity of our business. Our foreign investor had plans for the UK entity to become a European distribution hub. This is now no longer on the cards as the only distribution that can be done from within the UK cost-effectively is to UK postcode addresses."

Hannah Essex, BCC co-executive director, said: "These new figures show that UK exporters are currently facing a range of issues that go beyond just those that have been created by the pandemic.

"The message is loud and clear that the difficulties exporters are facing are not just 'teething problems'. They are structural issues that, if they continue to go unaddressed, could lead to long-term, potentially irreversible weakness in the UK export sector. We are calling on both the UK and EU to get back around the table and produce solutions that reduce trade barriers and give exporters a fighting chance."

Mike Cherry, national chairman of the Federation of Small Businesses (FSB), said: "International sales are way down on where they were at this time last year. A fifth of small exporters have halted sales to the EU temporarily and some have already given up on selling into the bloc on a permanent basis."

Both the FSB and BCC have welcomed the government's SME Brexit Support Fund. However, Cherry said: "Unless further action is taken to alleviate the new admin facing exporters, which tend to be our most innovative and profitable firms, we risk losing them. Uprating the value of sale threshold at which taxes and tariffs kick in for imports and exports to £1,000 would be the most constructive starting point."

Written by Rachel Miller.

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