No Scottish exporters are benefitting from Brexit, industry chiefs say

Martin Reid, the Scotland and Northern Ireland director for the Road Haulage Association (RHA), has painted a dire picture for firms since the end of the transition period on December 31.

Speaking to the Culture, Tourism, Europe and External Affairs Committee, he warned Brexit has caused hauliers to become "their own customs agents" due to shortages.

During the same committee hearing, Scottish Engineering chief executive Paul Sheerin said the end of the transition period “could not have come at a worse time”.

Boris Johnson predicted "sunlit meadows" for the UK after the Brexit referendum, but when asked what benefits he had seen so far, Reid stated that “nobody will have had any benefit from Brexit in terms of moving goods to Europe”.

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The complaints have prompted Scotland's Economy Secretary Fiona Hyslop to call for support for businesses to cut through bureaucracy post-Brexit, as well as a simplification of new trading rules.

Reid told the committee: "There's a lack of qualified customs agents, something that the Government deny. But we have seen that is definitely the case, so hauliers are now having to become their own customs clerks.

"They're having to take on admin people, train them up on systems that are still in their infancy and that we're still learning in order to deal with the additional paperwork that's required.

"Nobody is saying that it's an easy time for the Government but it's not an easy time for anyone in this current environment."

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During the same committee hearing, Scottish Engineering chief executive Paul Sheerin revealed just 25% of respondents to a recent survey felt no impact of Brexit on their exports and these were companies who do not export at all.

He said: "Unfortunately, that just reflects the companies that are manufacturing who don't export at all.

"Which suggests that almost every exporter in the manufacturing and engineering space is suffering detriment as a result of the end of the transition period and the new processes that we have."

Sheerin added that 45% of the 100 respondents to the survey said they had suffered detriment due to the availability of logistics, while 50% said they were being hit by the increased costs of haulage.

He told MSPs: "One of the comments that we've got is from a company who said they've had a 10-fold increase in their administrative costs associated with the logistics process post-Brexit."

Reid also said that, given the changes to export systems brought on by leaving the EU, hauliers and other exporters were being forced to start again.

"Come January 1, any mistakes that were going to be made, or any system errors that were going to be made, were being made in real time which has a knock-on effect throughout the supply chain," he told the committee.

"Effectively, we had a supply chain from top to bottom that was having to re-learn how to do the basics in moving goods.

"It's taken quite some time to get even the simplest of steps in place."

In a letter to Cabinet Office minister Michael Gove, Hyslop grants or tax credits for Scottish firms to enable them to hire customs advisers to decipher new rules following the end of the transition period.

The UK Government has so far announced a £20 million fund for small and medium (SME) businesses to deal with issues caused by the new rules.

Hyslop said: "Our ask of the UK Government is to provide urgent financial support, in the form of tax credits, vouchers or grants, so that small businesses can make full use of the services of customs brokers/agents - and so that the supply of trained, capable advisers increases to meet demand.

"This is likely to exceed the scope of the SME Brexit support fund. It is also needed urgently before confidence and customer relationships are irretrievably lost."

The Economy Secretary then pushed for a number of simplifications in the trading process, particularly around rules of origin, which she said are "proving particularly challenging for businesses".

She wrote: "Faced with this complexity and cost, some will choose to cease, or will no longer be able, to trade with Europe. We know that others are considering relocating substantial parts of their business operations, and the associated jobs and investment, from Scotland to the EU to circumvent rules of origin requirements."

Hyslop also urged ongoing talks with the European Commission to simplify VAT rules for trading goods, which she said are "adding a further layer of complexity to trade".

She added: "Businesses are struggling to understand and comply with the different sets of VAT rules that apply in the 27 EU member states.

"Again, SMEs with less experience, capacity or resources to absorb the costs and complexities of these additional processes are experiencing most difficulties."

A government spokesperson said: "In total, the government has made over £80m available to support the customs intermediary sector to deal with EU trade in 2021.

"We know that some businesses are facing challenges with specific aspects of our new trading relationship, and that’s why - in addition to the £20m SME Brexit Support Fund - we are operating export helplines, running webinars with experts and offering businesses support via our network of 300 international trade advisers.

"The latest available data shows that overall freight volumes between the UK and the EU are back to their normal levels. This has been possible thanks to the hard work put in traders and hauliers to prepare for the end of the transition period."