Now that the U.K. has formally left the European Union and a trade deal between the two entities was struck in December, the consequences of this historic decision are no longer a matter of intellectual debate, but an everyday reality for millions of businesses and business leaders.
Forbes is tracking news of the tangible impact of Brexit on British and European businesses, and will keep updating this story.
Shrinking British Dominance
One story that made headlines this week (February 11) was that Amsterdam has surpassed London as the continent’s top share trading center after seeing a fourfold increase in transactions between December and January, according to data from CBOE Europe first reported in the Financial Times.
Financial markets aren’t the only area where the U.K.’s dominance is shrinking. British universities have a reputation for excellence across Europe, but they are projected to attract 35,000 fewer EU students a year, according to research from the London School of Economics, which estimated a loss of £62.5 million ($85.9 million) per year in tuition fees as a result of Brexit.
An exemplary story of how small businesses have been affected by Brexit is that of Sue Campbell, founder of Kind2, a small business selling shampoo and conditioner bars, who dropped off their first post-Brexit package to a courier firm on January 12—incidentally, the day this column was first published.
But when Campbell spoke to Forbes contributor Catherine Erdly, nearly a month later, the package had yet to leave the U.K., a delay the tracking system attributed to Brexit, with no indication how or when it will reach its destination.
Campbell’s story shows the urgency of small businesses’ demands for financial support, which included transition vouchers worth £3,000 and reviewing the tax and duty threshold so that it only applies to EU transactions over £1000.
The U.K. government announced this week £20 million ($28 million) in support of small businesses, including a grant of up to £2,000 to pay for support in importing and exporting.
A Different Research Environment
The impact of Brexit isn’t just felt on business and travelers, but by professionals working in academic and research, too. The worst-case scenario for researchers, argues Forbes contributor Kath MacKay, has been avoided—but the change of relationship between the U.K. and the EU has inevitably resulted in some losses.
Travel In Question
U.K. musicians vocally protested the British government’s decision to prioritize limits to freedom of movement in their agreement with the EU, forcing any British act touring in the EU to obtain a visa to do so—and this wasn’t even the only issue related to travel to dominate the headlines.
The Eurostar train service is unsurprisingly struggling due to the fall in demand for travel as a result of the pandemic. At the time of its 25th birthday in 2019, the Eurostar delivered 11 million passengers to either shore of the channel. But now that financial support is needed, neither London nor Paris are keen to foot the bill.
Food Supply Disruption In Ireland
The issue of how to deliver a Brexit compatible with the Good Friday Agreement, which bans the introduction of border checks between Northern Ireland and the Republic of Ireland, was seemingly resolved by allowing Northern Ireland to remain part of the single market. In practice, this means that goods trade between Great Britain and Northern Ireland need to undergo custom checks. The consequences of this decision were on full display across a number of supermarkets in Northern Ireland last week, with many shelves resulting empty as food supplies deliveries were slowed, if not disrupted. U.K. Prime Minister Boris Johnson called it “teething problems,” but supermarket chains are concerned that, left unaddressed, the situation will only get worse.
U.K. Websites Lose .Eu Domain Access
Around 81,000 .eu website domains have been suspended as U.K.-based residents are no longer allowed to use the domain. The Leave.eu website, which campaigned for Brexit, has passed on the ownership of its domain to a non-U.K. resident in order to remain in business.
British Saddle Maker Temporarily Suspends U.K. Sales
Brooks England has been producing bicycle saddles from its factory in Smethwick, West Midlands, since 1882—but since January 1, it has suspended sales to the U.K. As it’s been owned by an Italian company since 2002, all its products go through the Italian logistics center before being dispatched around the world, and the new taxation regime for exporters to the U.K. has added red tape that companies are finding difficult—or unprofitable—to navigate.
Big Hurdles For Small Businesses
New rules around trade come at a busy time for small businesses that have already had to adapt to government lockdowns—but while EU-based businesses may simply decide to, at least for now, avoid selling to the U.K., U.K. businesses face a more difficult choice giving up on a market as big as the EU. The government and professional organizations can provide support in getting acquainted with the new regulations.
A New Deadline Looms
The deal reached in December by the U.K. and the EU is not the final piece of the Brexit puzzle when it comes to energy trade. By April 2022, both sides must develop new “trading arrangements” to govern the trade in power and gas conducted through interconnectors beneath the English Channel. The U.K. is a net importer of electricity, obtaining some 10% of its power through interconnectors linked to France and other EU nations.