One-third of UK businesses urge government to cut Brexit red tape

Nearly a third of UK businesses are urging the government to reduce regulation and red tape after Brexit to support British trade, according to a survey by Santander Bank.

The survey reveals that although there is a growing sense of optimism among SMEs, many are calling for action to ease the burdens imposed by Brexit trade requirements.

The survey found that almost three-quarters (74%) of businesses are confident about their growth prospects over the next three years, with 36% describing themselves as “very confident” – a significant increase from 22% the previous year. However, alongside this optimism, companies are demanding changes that will simplify international trade and enhance their growth potential.

Challenges of trade regulations after Brexit

One of the most pressing concerns is the complexity of post-Brexit regulations. Nearly a third of businesses (31%) want the government to reduce red tape around customs procedures, trade licenses and mutual recognition of professional standards and qualifications across Europe. These regulatory requirements, introduced after the UK’s exit from the European Union in January 2020, have added complexities to international trade.

Since Brexit, businesses have had to deal with new border controls, customs declarations and health certificates, resulting in increased costs and timeframes for exporting goods. Delays in implementing parts of the Windsor Framework – a legal agreement designed to govern the operation of the Northern Ireland Protocol – have also contributed to increased uncertainty. For example, new customs processes for business-to-business parcels were scheduled to take effect in October 2024, but have now been postponed until March 2025.

Mutual recognition of standards and qualifications

Another key issue raised by businesses is the need to improve mutual recognition of standards and qualifications between the UK and Europe. This would make it easier for professionals to move and work across borders, facilitating business expansion and collaboration.

While the EU-UK Trade and Cooperation Agreement includes the possibility of concluding mutual recognition agreements for specific sectors, progress has been slow. Brussels has only concluded one such agreement, with Canada, to facilitate the recognition of architects’ qualifications. Meanwhile, the UK has announced mutual recognition agreements with countries outside the EU, including New Zealand, which enable mutual recognition of auditors.

Labour’s election manifesto acknowledged the importance of improving mutual recognition with the EU to boost UK trade relations, suggesting this could be a focus for the next government.

Calls for more government support

In addition to regulatory relief, a quarter of companies (25%) are seeking greater government assistance in finding international customers, business partners and suppliers. Recruitment challenges were also highlighted, with 24% of companies requesting more help finding the right talent within the UK.

These results reflect the continuing challenges businesses face in the post-Brexit landscape, with many calling for government support to help them grow and compete on the global stage.