Brexit impact felt by UK firms trading with EU bloc

Almost one in five (23%) of UK exporters have temporarily halted sales to EU customers, according to a survey of 1,483 businesses by the Federation of Small Businesses (FSB).

Its research also found that 4% have already decided to stop selling into the bloc permanently after new trading rules took effect at the start of this year, while 11% exporters are considering halting sales to Europe permanently.

The same proportion (11%) have established, or are considering establishing, a presence within an EU country to ease their exporting processes. A similar number (9%) are thinking about securing, or are already using, warehousing space in the EU or Northern Ireland (NI) for the same purpose.

Small importers have also been hit hard by new paperwork, though fewer than one in five have temporarily suspended purchases from the EU (17%), the survey found.

The majority (70%) of importers and/or exporters have suffered shipment delays when moving goods around the EU. One in three (32%) have lost goods in transit, and an even greater proportion (34%) have had goods held indefinitely at EU border crossings. Of those that have experienced delays, a third (36%) have suffered hold-ups that lasted more than two weeks.

Following the findings, FSB is urging the government to:

  • Increase the threshold at which tariffs and taxes for imports and exports kick-in to £1,000.
  • Closely monitor the roll-out of the SME Brexit Support Fund, ensuring small businesses are aware that they can apply for funding to access a range of trading advice, training and technology, and not exclusively that relating to customs and intermediaries.
  • Strike ambitious new free trade agreements (FTA), which include dedicated small business chapters, with fast-growing economies around the world, including the US.

Santander to close 111 branches

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In another blow to cash-based businesses, Santander has announced it is to shut 111 branches across the UK.

The high street bank said the reduction in branch visits was a long-term trend that had been accelerated by the pandemic. “Branch usage by customers has fallen considerably over recent years so we have made the difficult decision to consolidate our presence in areas where we have multiple branches relatively close together,” said Adam Bishop, head of branches at Santander.

In January, HSBC made the decision to close 82 branches in the UK between April and September this year, claiming customers are turning to digital banking. The company will have 511 branches across the country following the closure programme.

And in March, Bank of Ireland announced it is to close 15 branches in Northern Ireland,  more than half of its 28 branches currently operating in NI.

While the move will cut Santander’s High Street estate to 452 branches, it said most of the branches closing were within three miles of another Santander branch. The furthest is five miles. It added that all are within half a mile of at least two free-to-use ATMs and one mile of the nearest Post Office.

In the two years before the pandemic the number of transactions handled in branches fell by a third, the bank said. Last year, it declined by a further 50%. At the same time, mobile and online transactions have grown 20% each year with more than two-thirds of transactions now completed without customers visiting a branch.

About 840 staff will be affected by the closures.