Scotland’s Small Businesses Need the EU

Scotland’s small and medium sized enterprises (SMEs) provide 1.2m jobs[1] – that’s more than half of all private sector employment. There’s important. But they’ve been even more affected by Brexit than larger businesses. For a thriving economy they need Scotland back in the EU, with frictionless trade and the freedom of movement to employ EU workers.

From January 2021 Scotland’s businesses had significant barriers put in place for exports to their biggest market – the EU[2]. For the first time since the UK joined the EU:

Full UK export declarations and EU import declarations required
Applicable tariffs and import VAT payable at the time of import unless trader eligible to defer payments
Traders have to submit UK exit summmay declaration (or combined fiscal, safety and security declaration) and an EU entry summary declaration.

This is a pain for any business, taking much time and money to complete – but just the same barriers exist whether the business is large or small. So for SMEs this is huge extra load. So it’s no surprise that more than half of them are now exporting less to the EU – and some have stopped completely – as a result of Brexit[3].

But it’s not just about export barriers. It’s harder for SMEs to employ the EU workers they were dependent on since Freedom of Movement was removed. Most SMEs (82%) say that they’ve suffered because of this[4].

The impact of these Brexit problems is severe. Of SMEs who export, some 85% were exporting to the EU before Brexit – either directly, or as a part of the supply chain of a larger business[5]. SMEs were hugely more dependent on the EU for their exports than larger businesses – and yet UK Government and unionist parties never discuss this impact om SMEs. In fact they never discuss Brexit!

Sources

[1] https://www.gov.scot/publications/businesses-in-scotland-2023/pages/business-size/

[2] https://www.kriya.co/blog/changes-to-import-export

[3] https://www.iod.com/news/eu-and-trade/iod-4-in-10-traders-are-now-exporting-less-to-the-eu/

[4] https://www.ons.gov.uk/economy/economicoutputandproductivity/output/datasets/businessinsightsandimpactontheukeconomy

[5] https://assets.publishing.service.gov.uk/media/5a808c28ed915d74e33fb0d3/bis-16-230-smes-supply-chains-exporters.pdf