Brexit costs UK business as much as Covid - report
Which has been more costly to British businesses, Covid or Brexit? Both, according to home delivery firm ParcelHero.
Its research reveals that the “self-inflicted wound” of Brexit has cost UK businesses as much as the unforeseeable Covid pandemic, each having come with a price tag of £250 billion by the end of 2021. But it also claims the Brexit tally is now rising faster.
Retailers and fashion firms continue to face obstacles to both exports and imports with costs of both rising and delays to the movement of collection around the world — something that’s a huge problems when stock is intended for a specific season (like partywear last month).
ParcelHero’s Head of Consumer Research, David Jinks, said: “British businesses have had a torrid few years. The impact of either Covid-19 or Brexit would have been bad enough; together they have proved disastrous.”
The report says that by last March, the Centre for Economics and Business Research found that Covid-19 lockdowns had already cost UK businesses £251 billion. It revealed the value of the goods and services produced by the economy was more than £250 billion lower than it would otherwise have been.
“Covid-19 cost small businesses alone an estimated £126.6 billion, according to the business insurer Simply Business, while a November 2021 government report revealed the UK lost almost £365 billion in GDP from Covid overall.”
He added: “No one could have foreseen the arrival of the pandemic and there was little that could have been done to shield UK businesses in advance. However, this is certainly not the case for the impact of Brexit on UK businesses.
“Since Brexit actually happened… the UK Trade Policy Observatory reveals that the reduction in trade has lost UK businesses a further £44 billion. That breaks down to £32.5 billion lost in potential imports to the UK and £11 billion in exports to the EU.
“The UK government splashed a further £8.1 billion on preparing for Brexit and the end of the transition period, according to the Institute for Government. In our view, that was money that should have been spent on promoting UK trade across the EU and beyond, not battening down the hatches.”
And in in the long term, ParcelHero sees Brexit possibly ending up costing even more than Covid-19. The report quotes Thomas Sampson, Associate Professor at the London School of Economics, who had said that when measured in terms of their impact on the present value of UK GDP, the Brexit shock is forecast to be two to three times greater than the impact of Covid-19.
With the end of lockdown and travel restrictions, the Brexit bill continues to mount. The most recent Government Business Insights report has revealed that, last month, 66% of UK businesses experienced challenges with exporting and 79% with importing.
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