Scottish Economy Secretary Fiona Hyslop has called on the UK Government to provide further support to companies struggling to trade with the EU post-Brexit.
In a letter to the Chancellor of the Duchy of Lancaster Michael Gove, she demanded urgent financial assistance to help small businesses hire customs agents to deal with the additional bureaucracy involved with importing from and exporting to the EU.
She suggested that this could be provided in the form of tax credits, vouchers or grants.
The proposal was among several made in response to the growing impact of Brexit and Gove’s public commitment to help businesses adjust to the new trade rules.
The Conservative MP recently pledged to “to pull out all the stops” to help businesses adjust to new trade rules.
Hyslop also urged the UK Government to engage with the European Commission to simplify VAT regulations on cross border trade, and to streamline arrangements for businesses moving goods to and from the EU.
While she welcomed the £20m SME Brexit Support Fund announced by the UK Government last week, the letter called for additional direct help.
She wrote that initial feedback from businesses – including through Scottish Enterprise’s contacts with 1,400 EU traders – confirms that businesses in a range of sectors have reported issues with logistics, haulage, lack of customs agents, complex bureaucratic paperwork, new VAT and handling charges and the complexities of rules of origin requirements.
“Simply put, there are not enough customs clearing officers and, of those that there are, some are inexperienced,” read the letter. “These logistical issues are causing businesses huge difficulties, affecting their competitiveness and putting their survival at risk.”
As well as customs issues, hauliers are less willing to move freight between the EU and mainland UK, with evidence that freight costs are increasing.
Some couriers – like DPD and DHL – have introduced lists of “restricted” goods that they are not willing to carry as the paperwork required is deemed to be too complex, further reducing capacity in the sector.
With only about 15% of hauliers being UK ‘home grown’, Hyslop noted that it is “very challenging indeed” to incentivise non-UK hauliers to service this market.
“These issues should not come as a surprise to the UK Government – they are an inevitable consequence of its decision to leave not just the EU but the Single Market and Customs Union,” Hyslop stated.
“The problems have been exacerbated by its insistence on imposing this hard Brexit in the middle of a global pandemic, despite an extension to the transition period being offered and the Scottish Government presenting evidence of the damage that would be caused.
“The UK Government must act urgently before business confidence and customer relationships are irretrievably lost.”
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