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100 days of Brexit: the challenges facing businesses

We look at the post-Brexit challenges businesses are facing and what the CBI is doing.

16 Apr 2021, 4 min read

The UK-EU Trade and Cooperation Agreement (TCA) has been in place for over 100 days now. Companies across the UK are continuing to adjust to the new trading relationship with the EU, and the additional checks and processes that need to be completed.

What challenges are firms continuing to face?

Some sectors have been more impacted than others. Recent CBI surveys have shown that over 60% of manufacturers and distributers have reported delays and additional customs costs, whilst 15% of services firms have reported cost and price increases. But services expect increased impact as covid travel restrictions lift.

The size of a firm impacts their ability to navigate the new rules and regulations. While larger firms have experienced the same problems as smaller firms, they have resources available to navigate and understand them. An FSB survey found over 25% of small exporters have stopped selling to EU customers.

New tariff rules have pushed up supply chain costs and complexity. New rules of origin mean UK firms importing components from the rest of the world won’t meet thresholds for tariff free UK-EU trade. Additional costs have seen firms adjust supply chains, find new materials, or leave EU markets altogether.

The Northern Ireland Protocol is still being phased in. Whilst a series of grace-periods are operational, additional paperwork and checks must be completed when transporting goods between Great Britain (England, Scotland and Wales) and Northern Ireland. Talks between the UK and EU are continuing on how to ensure the Protocol can be fully operational.

What is the CBI doing?

The CBI is working closely with policymakers in the UK and EU to highlight the challenges firms face.

This includes feeding in business intelligence to the highest echelons of government. The CBI joins the weekly Brexit Business Taskforce chaired by Lord Frost, outlining the live challenges firms are continuing to face. This is supported by feeding member insight directly into Cabinet Office with our monthly Brexit heatmap.

In the EU, the CBI has been navigating the new political landscape for UK firms. This includes frequent contact with EU Institutions, including Maroš Šefčovič’s team, as well as our sister federation BusinessEurope, and embassies. In addition, the CBI has daily contact with the UK Mission to the EU (UKMis) and co-hosts a number of webinars for members.

What does this mean for members?

Using the insight our members have shared with us, the CBI has influenced government decisions on a number of key challenges faced by members.

The CBI has secured a government commitment to publish country-by-country guides for business travel. The TCA means requirements for business travel and market access for services will vary country-by-country. Guidance for each EU country will help firms providing services to plan.

The CBI has supported a positive draft EU/UK data adequacy assessment. This was a huge step towards securing the free flow of UK/EU data, without which UK firms receiving personal data from Europe must implement costly and time-consuming safeguards.

The CBI supported the UK and EU securing a Memorandum of Understanding on financial services. CBI support for this paves the way for more constructive dialogue towards effective regulatory cooperation on financial services, leading to better services for customers.

What happens next?

Over the coming months, the CBI will be focused on keeping members informed, mitigating disruption by finding solutions to post-Brexit challenges, and looking to the opportunities ahead. Working closely with government to find practical solutions to the challenges firms are facing, the CBI will continue to use member insight to engage with political stakeholders on both sides of the Channel.                      

The CBI will continue to support businesses as they adjust to the new UK/EU relationship. Members can join our quarterly briefings and bi-weekly CBI @10am webinars, and find up-to-date guidance on our Transition Hub and via My CBI.

Looking to the medium- and long-term, the CBI will be working closely with members to influence EU Trade policy in three key areas: 

  • Navigating and engaging with the new TCA governance structure; 
  • Setting out the priorities for services firms;
  • Engaging with the Taskforce for Innovation, Growth and Regulatory Reform to assess opportunities resulting from the UK’s newfound regulatory autonomy.

Get involved

Let us know how the new UK-EU trading relationship is impacting your business. Get in touch