A wave of new regulations from the European Union is causing significant concern among British small businesses, many of which feel unprepared and unsupported as they face impending costs. Starting December 13, businesses exporting to the EU will encounter strict new rules, including the requirement for having a designated compliance operator and ensuring products meet EU safety standards. This development has ignited fears of diminished exports and operational strain as self-reliant traders scramble to navigate the shifting regulatory environment.
The changes are not merely procedural; they come at a time when many small businesses are still recovering from the economic tremors caused by Brexit. One particularly telling statistic is the 20,000 British businesses reportedly ceasing exports to the EU since the Brexit transition—a staggering decline of nearly 17%. Between 2019 and 2023 alone, research indicates EU goods exports plummeted by 11%. This paints a grim picture of the creaking framework within which small businesses must now operate.
Small business owners, like Katie Stockton who manages her sign design company, are already feeling the crunch. Stockton revealed she received quotes for about €160 (roughly £133) per product each month just for compliance services. Selling three types of products means she'd be shelling out nearly £4,800 yearly merely to comply with EU regulations—not accounting for the additional time and effort required for operational adjustments. Faced with such prohibitive costs, she acknowledged the EU market may no longer be worth the investment.
The compliance burden doesn’t end there; small business owners also have to grapple with translating safety guidelines and possibly hiring legal help to navigate any conflicts with current EU regulations. Many entrepreneurs report running up against confusing information. For example, Chloe Barlow, who operates a stationery and wedding card business, noted she sells about 25% of her products to the EU. While she pursued professional advice to understand the new rules, she estimates adhering to these regulations will consume thousands of pounds each year, straining profit margins and forcing her to divert focus from product design to compliance tasks.
Business owners voice their frustrations about the vague guidance provided. While some sellers on platforms like Amazon received clearer instructions, those selling directly through sites like Etsy were left scrambling for answers. The disconnect reveals broader challenges as businesses navigate this complex regulatory maze. Barlow expressed, "There’s no way I can manage all this red tape, and I’ve received zero support from the government or from Etsy.”
This turbulence echoes sentiments from the Global Trade Research Initiative (GTRI), which is attempting to make sense of port regulations and import restrictions impacting sectors reliant on imported steel, manufacturing, and other supplies. According to GTRI, over 10,000 steel user units across India are currently under financial threat due to regulatory-induced delays, like those raised by the Steel Import Monitoring System (SIMS). They argue these layers of regulation choke on operations, urging the government to streamline and digitize processes.
Further complicative measures highlight broader regulatory frustrations, layers of protection aimed at domestic manufacturers unintentionally penalizing businesses dependent on imports. The GTRI stresses the need for proper assessment of Free Trade Agreements, warning the rise of trade barriers could stifle competition and economic growth. The adage, "it’s easier said than done" rings true as policymakers attempted to safeguard industry interests without recognizing the collateral impact on smaller players.
Owner feedback has driven some stakeholders to demand tangible improvements. GTRI proposed strategic measures—digitizing systems for efficiency, updating monitoring systems like SIMS, and prioritizing clear, effective communication from the government. Equally, addressing various Quality Control Orders (QCOs), which should be applicable only to domestically produced steel, could alleviate excessive burdens on import processes.
On December 13, as new EU regulations come to life, many small businesses look toward the government and industry stakeholders for clarity and assistance. While government representatives claim to prioritize small traders—labeling them the backbone of the economy—business owners like Stockton and Barlow remain apprehensive, calling out the lack of substantial support leading up to the launch of these costly changes.
With just weeks remaining, time is running out for these businesses to adapt. The specter of tighter compliance regulations looms larger, and many fear they will not survive this new era of red tape. The government’s commitment to easing burdens may sound promising, but it’s yet to translate to tangible relief on the ground.”
