Since the turn of the year, UK companies exporting into the EU have to fill out a set of customs declaration forms and some goods, like agricultural products, have to undergo rigorous checks at the border. This has led to border disruption and delays.
These issues are scrutinised in the first instalment of this 2-part series, in which City A.M. sits down with UK-based business leaders and entrepreneurs to discuss the challenges of trading with the EU in post-Brexit Britain.
Today, business leaders zoom in on what the end of freedom of movement means for their firms and discuss future access to EU talent following the end of the transition period on 31 December.
According to recent research by the Small Business Charter (SBC), a government body, around 65 per cent of UK businesses are concerned about a loss of profits this year as a result of post-Brexit trading conditions.
Moreover, SBC found that 43 per cent of small to medium-sized business are concerned about supply chain disruption this year and many are also worried about diminishing relevance of their products or services in the EU, around 41 per cent.
Natasha Marsh, director of London-based marketing and PR agency Campbell Marsh Communications, also fears her firm has become a lot less attractive for clients across the EU in the long term.
“[Post-pandemic], the obvious impact from Brexit, for us, would be involvement with exhibitions in Europe,” Marsh told City A.M., explaining that sending teams of fitters, fixers and delegates to EU countries will become a lot more complicated than in the past.
Drop in European workers
Recent research released by the ONS found that the non-British resident population declined in the year through June 2020, with the biggest decrease among citizens of Eastern European countries, namely a drop of 135,000 people.
Jason Tema, director of Surrey-based property development firm Clearview Developments, thinks the UK market should brace itself for a shortage of skilled workers, across a range of sectors and industries.
“Whilst the departure of EU-born professionals might marginally open up job opportunities for some British workers, a drop of qualified industry staff of this scale will inevitably lead to severe staff shortages,” Tema said.
Access to talent
For Craig Beddis, CEO of Liverpool Street-based digital distributor Hadean, less access to the EU’s best and brightest is already major concern.
The ‘supercomupting resources’ startup is looking to expand rapidly this year and “of course, we want the best people,” Beddis told City A.M.
“Our presence in the deep tech sector means that we are trying to source highly specialist skill sets. Often there may only be a handful of people who have the prerequisite knowledge required, so shutting ourselves off from Europe makes it more difficult to find these people,” he explained.
“While it’s not impossible per se, tapping into high calibre European talent will inevitably have a greater administrative burden attached to it,” Beddis added.
The long term future has also become less certain for Holborn-based Morten Petersen, CEO and co-founder of online recruitment and freelance management platform Worksome.
For Worksome, which is based in London and Denmark, the effects will be “manageable” for now, but as freedom of movement between the UK and EU has ended, there is a potential for some impact in the longer term, Petersen told City A.M.
“We help companies hire talent from all over the world, and the challenge will be if we transfer an employee from the UK into the EU or vice versa,” he said.
“At the moment EU nationals [in the UK] can continue to operate as before since most will have no issues obtaining the EU Settlement Status. But as we move away from the first of January  then this will become harder as new entrants will need work permits, which will require a corporate sponsor,” Petersen explained.
New immigration rules
The UK’s new, post-Brexit “points-based” immigration system means that workers from the EU, European Economic Area and Switzerland will no longer have preferential access to the UK labour market, and will need to apply for a visa through Britain’s immigration system.
In October, the City of London Corporation said the new immigration regime is “fundamentally unfair”. The City body called on the Home Office to “rip up the red tape” and make temporary measures rolled out during the pandemic more permanent.
Petersen is particularly worried about the UK no longer allowing sponsors to obtain permits for roles that will be seconded full time to a client’s site.
“The result is that clients will have to accept domestic talent, which has more of an impact on them but we will have to keep abreast of the immigration laws to ensure we do not fall foul of them,” he sighed.
Marsh, on the other hand, said it is too early to say what the true long-term effects of Brexit will be, but, so far, her clients have been holding back on investment.
“It’s currently unclear how [the new rules] will impact our viability of working with current clients in Europe. This harms us financially,” she concluded.