Amid all the drama related to COVID-19, it was easy to miss a milestone for Britain: the first anniversary of Brexit. Friday marked exactly 12 months since the UK finally severed major remaining ties with the European Union, officially ending membership in early 2020.
The precise economic effects of this rupture are difficult to assess; the UK’s departure from the EU has, of course, coincided with the massive upheaval caused by COVID-19.
But we can at least get a sense of where some UK exporters are in their first year outside the bloc and what they think now about the momentous UK decision to end its close relationship of 47 years with its European neighbors.
“Marketplace” has checked with some of the small business owners – both pro and anti-Brexit – the show has interviewed in recent years.
Steve Hardeman is Managing Director of Clevedon Fasteners, a small rivet manufacturing company with annual sales of approximately $ 6 million and a workforce of 32 people.
Hardeman was a strong supporter of Brexit as he believed that EU membership was hampering the UK economy by controlling its trade relations with the rest of the world and imposing heavy regulations on UK businesses.
For Hardeman, going out would be a liberation. “I felt that Brexit would unleash the UK’s manufacturing potential, which is absolutely vast,” he said.
But 12 months after the UK left the bloc, Hardeman is a bit disillusioned.
He doubts the current UK government, which he says ‘has no clue about manufacturing and industry’, can make Brexit work for his business.
Officials, he said, have been unable to offer any useful advice to companies like his on the new trade relationship with the EU. And he thinks the government messed up the Brexit negotiations by, for example, giving the bloc too much power over the British province of Northern Ireland.
“It doesn’t give me confidence that they’re going to do as good a job on Brexit as it could have been done,” Hardeman said.
Brexit hasn’t actually had much of an impact on his business so far, as the pandemic has caused a lot more upheaval.
The opposite is true for another small company that “Marketplace” followed: British Boxers, which produces luxury sleepwear and underwear.
“The pandemic, I’ll be blunt, has been very good for business,” said co-owner Darren Price. “Blockages across Europe have increased our sales by 50% because people are at home and want to wear something comfortable. But Brexit has been a big deal.
The company relies on a complex European supply chain that supplies decorative trims from France and fabrics from the Netherlands, Portugal and Italy. Part of the manufacturing takes place in the Czech Republic and many of the company’s customers are in mainland Europe.
Brexit means shipments inside and outside the EU now involve a lot more paperwork and additional costs, “which reduces our margin and our less profitable business,” Price said.
Still opposed to Brexit, he is now more convinced than ever that leaving the EU was a big mistake.
“Far from having a positive impact on trade, as was often mentioned at the time, it makes it much more difficult for us to export,” he said. “We have grown a lot over the past year, but not because of Brexit. We grew up despite Brexit.
Lars Andersen, boss of London-based My Nametags, shares the same view on the decision to leave the EU. It exports around 40% of its products to the block, including personalized badges for children’s clothing and other personal effects.
Now that the UK is no longer a member state, Andersen has faced bureaucratic issues exporting to individual clients across the continent. To get around this problem, he created a subsidiary in Ireland, a member of the EU. It is not an entirely problem-free solution.
“It adds complexity, adds cost, adds a little bit of time,” he said.
His life was so much easier, he said, when the UK was part of a huge European market. “In my opinion, we should go back and ask nicely if we can come back. I realize that probably won’t happen any time soon. But we can always hope, ”said Andersen.
It’s a sentiment our next company’s Brexit support boss certainly doesn’t share.
Jules Morgan, director of KPM Marine, employs around 50 people and has a turnover of around $ 8 million per year manufacturing pumps and other marine equipment. Morgan exports this equipment to more than 30 countries around the world, including some in the EU.
These are high-value products – a shipment can be worth up to $ 150,000 – so, he said, the cost of additional paperwork for his exports to the EU does not affect his bottom line. “It’s tiny,” he said.
Morgan does not regret voting for Brexit.
“It wasn’t just about trade. It was also a question of regaining control of Brussels. It was about restoring democracy, ”Morgan said. “I am absolutely proud of what we have done. We now have the freedom and agility to make our own decisions. I am very optimistic.
Mark Nunan, boss of a small engineering company called Sarginsons, shares this optimism. Although he admitted that he initially encountered “some difficulties” in exporting to and importing from the EU, these were short-lived. “Once we knew what was required, it really wasn’t a problem,” he said. “Nothing we can’t handle. ”
Business has not been easy for him for the past two years. The company specializes in lightweight, high-tech aluminum components for the automotive industry. With revenues of around $ 15 million per year and a workforce of 110 people, Sarginsons has taken a hard hit in its bottom line. Annual profits have fallen by around $ 1.3 million in 2020 and again in 2021.
But Nunan believes the supply chain disruptions and labor shortages he suffered – along with many other businesses in the EU and around the world – were mostly caused by the pandemic, not by Brexit.
“Corona muddies the problem enormously,” he said. “But from our perspective, the corona is much more of a problem than Brexit.”
A banker by training, Nunan voted in favor of leaving the EU because he believes the bloc is financially unsustainable because of the euro. Coupling 19 of the member states together into a monetary union, despite their different rates of economic development, is problematic, he said. In fact, he expects the block to come apart.
Nunan still thinks the UK is doing much better. “I would vote for Brexit again,” he said.