A major North West manufacturer with a plant in Hungary says it will now reduce its UK operations and invest in EU facilities after what it described as a “lack of clarity and preparedness” following Brexit.
Jonathan Kemp, MD of manufacturing firm AEV Group Ltd, was speaking as a new survey by the British Chambers of Commerce (BCC) revealed almost half of exporters have struggled since the end of the transition period in January.
The survey’s results were released on Thursday, and reported that a third of firms found difficulties adapting to changes to moving or trading goods in the first month of the year. For exporters, that figure rose to 49%.
Jonathan Kemp is MD of manufacturing company AEV Group Limited, which makes and supplies varnishes, resins and insulating products for the electrical industries worldwide, based in Birkenhead.
He said: “We export to every continent in the world and have done for a period of time, therefore we have employees who are experienced in dealing with exports. The issue with the EU-UK situation is the lack of clarity and preparedness in all areas.
“There is no support from government to fund delays or extra stock-holding required to deal with the delays or to assist in extra charges incurred by us or our customers.
“We have another manufacturing site in Hungary (within the EU) and we are being asked by European customers to move production to this site because they don’t want any extra paperwork or costs (even if just cashflow from paying VAT).
“Our current view is that we will reduce our operation in the UK and invest in EU facilities.”
The survey received around 1,000 responses, with nearly half of respondents exports of goods and services.
It looked to understand the extent to which businesses found it easy or difficult to adapt to changes in trading goods and/or services and moving people in the month since the end of January.
When asked about the specific difficulties businesses were facing, commonly cited concerns included increased administration, costs, delays, and confusion about what rules to follow.
The BCC is now calling for a number of measures to help turn the situation around.
Those include for the UK Government and EU to identify the most significant blockages for business and draw up plans to resolve them, and create tax credits allowing firms to offset their spending on adaptation to the new UK-EU requirements against their tax bill.
BCC Director General Adam Marshall said: “Trading businesses – and the UK’s chances at a strong economic recovery – are being hit hard by changes at the border.
“The late agreement of a UK-EU trade deal left businesses in the dark on the detail right until the last minute, so it’s unsurprising to see that so many businesses are now experiencing practical difficulties on the ground as the new arrangements go live.”