Barrier-free trade vs restricted immigration: UK businesses weigh in on Brexit priorities

A new poll on Brexit priorities reveals that three in four British businesses see barrier-free trade with the EU as more important than restricting the free movement of people.

A new poll on Brexit priorities reveals that three in four British businesses see barrier-free trade with the EU as more important than restricting the free movement of people, which only 6 per cent of the surveyed business owners see as a priority.

The majority of British entrepreneurs are worried EU leaders will impose tariffs on UK trade as a price for leaving to the EU, and amid the uncertainty, eight out of nine business owners urge the government needs to do more to explain the benefits of free trade to the public.

The results of a poll of 1,000 British businesses are included in “Defending cross-border trade”, a new report into the impact protectionism and Brexit will have on trade from not-for-profit organisation GS1 UK that licenses barcodes and aims to facilitate global trade.

According to Prime Minister Theresa May, while Britain will be outside the single market, it may be possible to preserve some of our access to it – even if that means Britain continues to make financial contributions to the EU. When GS1 UK asked British business, 49 per cent said they would prefer the UK to continue making financial contributions to the EU to preserve access for trade while just a third said they would prefer the money was spent on cutting taxes in the UK.

The report also found 59 per cent of British businesses are worried EU leaders will impose tariffs on UK trade as a penalty for leaving to the EU.  The poll suggested British businesses are not reassured by economic arguments suggesting Brexit will work because the EU needs it to – that tariffs cut both ways and that no matter what happens, Germany will still want to sell its cars to Britain, as will France its wine.

GS1 UK also polled business on their preference for a new trade deal: 76 per cent viewed an EU/UK trade deal as more important than a US/UK deal.

“In the Brexit negotiations, business is clear.  Gaining access to the single market for British exports should take priority over rolling back the free movement of people.  And if we have to pay for access to the EU, then so be it.  British business tells us loud and clear that a trade deal with the EU is even more important to them than a deal with the US,” says Gary Lynch, CEO of GS1 UK.

Business is overwhelmingly against protectionism with only 4 per cent of UK firms supporting policies which restrain trade between countries.  A majority of businesses (53 per cent) agreed that trade helps lift people out of poverty – with only 14 per cent saying that it doesn’t.

“For decades there has been a consensus that free trade brings more jobs, higher wages, and lower prices. That’s changing. Donald Trump’s inauguration speech proclaimed a new age of American protectionism. He’s not alone. Marine Le Pen regularly attacked trade in the race for the French presidency. But British business bucks that populist trend.”

“British business wants Theresa May to make the case for free trade – and stop protectionism spreading any further,” Lynch adds. “For 40 years, GS1 has been to helping businesses trade freely across borders using a global language of business.  But as an organisation we can see our mission and purpose being undermined by the resurgence of protectionism.”

GS1 UK’s research found that, in face of a growing wave of protectionism, close to nine in ten British businesses believe the government needs to do more to explain the benefits of free trade to the public.

GS1 UK’s agenda for export

GS1 UK surveyed British businesses to draw up an agenda for export – an overt course of action for the government to follow to facilitate cross-border trade.  The findings show:

  • 66 per cent think the government should tackle Britain’s transport infrastructure – including airport expansion – “as a matter of urgency”
  • 66 per cent want the government to work towards the elimination of customs duties
  • 62 per cent want the government to lower corporation tax to 12.5 per cent – similar to Ireland
  • 59 per cent of British businesses want to see better access to export financing for SMEs
  • 58 per cent think the government should introduce export tax credits
  • 55 per cent want the government to allow the free movement of labour from the EU to continue
  • 47 per cent agree that the UK should slash EU red tape – only 25 per cent disagree
  • 41 per cent want the UK to go even further and adopt a non-interventionist model similar to that of Hong Kong – just 18 per cent disagree

“We need to stop thinking about what export can do for our government – and start thinking about what our government can do for exports,” adds Lynch. “British exporters are keen to put their faces into the wind of international competition and are confident of success despite the geopolitical challenges of protectionism and Brexit – providing the government gives them the support they need by working towards the elimination of customs duties, lower corporation tax and improved access to export financing for SMEs.”

“While trade deals will be secured over time. British businesses also tell us that investment in our transport infrastructure must happen now.  We need will need to expand Heathrow quickly and step-up high-speed rail to keep up with international competition.”

SMEs adopt a ‘keep calm and carry on’ approach

While commentary around the future of the Eurozone and a US trade deal often implies bad news for UK plc, small online businesses appear to be shrugging off any uncertainty according to a study carried out by eBay. Over half of the small business leaders eBay spoke to expressed fatigue with “doom and gloom” Brexit predictions, stating that these negative projects don’t affect their business.

“I’m not saying the experts are wrong, but things like the strength of the pound are shaped by forces outside our control, so whilst they can have an impact on business, you can’t let them affect your ambitions,” says Monty George, managing director of online furniture store, Furniture Box. The business launched on eBay in 2015 and now turns over more than £1 million. “As an entrepreneur you’ve got to be bold and invest for the growth of your business or idea.”

“The ecommerce market has been growing in the UK and beyond for the past several years, and we don’t see this changing anytime soon. We have a great offer for consumers, so we’re confident that wider circumstances such as Brexit aren’t going to see the demand for furniture decreasing,” says Furniture Box MD, Monty George.

This is echoed by Steve Sanger, director of British grooming brand The Beard and the Wonderful which also launched its eBay store in 2015. According to Sanger, there are always ways for entrepreneurs to respond to changing circumstances and take matters into their own hands. “British grooming products are in huge demand right now, so take advantage of ready-made global infrastructure like eBay and get exporting. If anything, the weakness of the pound means there’s never been a better time to export. What’s important is to stay resilient and adaptable,” he says.

72 per cent of the small business owners eBay spoke to as part of its study are confident that they are the masters of their own destiny when it comes to the success of their business.

The businesses surveyed in the eBay for Business Index identified five risks that could limit their growth this year:

1. Imports: A weak pound making imports more expensive concerned 22 per cent of SMBs

2. Spending: A reduction in consumer spending limiting sales is seen as a risk by 41 per cent

3. Brexit: Uncertainty caused by Britain’s exit from the EU is seen as likely to limit growth by 36 per cent

4. A ‘Black Swan’: An unknown or unpredictable political or economic incident concerns 28 per cent of SMBs

5. Broadband: unsatisfactory broadband internet provision could limit growth according to 12 per cent of respondents

Praseeda Nair

Kellen Rempel

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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