A new report released today by European Movement UK highlights how small-and-medium-sized enterprises (SMEs) in the UK have struggled since the UK left the EU.

The report, Freedom to Prosper, which interviewed dozens of SMEs across the UK, can be downloaded here.

Key takeaways from the report:

• Most businesses said their trade with EU countries had reduced significantly in the last few years, with increased costs, complex new paperwork and long delays on exports making them uncompetitive compared to businesses within the EU's single market.
• It comes after new research from the Federation of Small Businesses (FSB) found that 34% of SME exporters expected to reduce or stop EU trade altogether if current arrangements remain in place, while just 6% saw opportunities to grow. 
• With the second UK-EU Summit expected to take place in July, this report lays out the business case for UK membership of the single market.

For the report, businesses across the UK shared their post-Brexit experience with us.

Alison Lea-Wilson MBE, of Anglesey Sea Salt Co. Ltd, in Anglesey, Wales said:

"Since Brexit, trading with our largest export markets - Italy and Spain - has become so much harder. Before Brexit, it used to take under a week to export one pallet of our products from Anglesey to Bologna, but now it takes up to three months. 

“The delays are largely due to excessive paperwork. Rather than following the EU rules across all European countries, we now must liaise with each country individually. As a result of Brexit and the difficulties we face trading with the EU, the company lost four major EU distributers, sadly this translates to a loss of customers."

Mike Donovan of Apparel Studio, Stockport, also said:

"As soon as the referendum vote happened in 2016 our earnings were cut in half almost overnight. The 12% tariffs on all imports and exports drastically decreased our profits which meant we had to change our business model and move our manufacturing to countries like Turkey.

"Simply put, we need access to the customs union and the single market so that our business can thrive again."

Tina Makin of Pie Events, based in Surrey, shared her businesses’ experience:

"We design and deliver bespoke UK and European cycle rides for UK charities. The biggest challenge for us is the increased costs and admin associated with using Carnets [temporary and tax-free export/import of goods]. As part of our service, we arrange the transport of all the bicycles and equipment which before Brexit, was as simple as loading up a van and setting off. 

“Now, this entails a series of long-winded forms for both my business and the customer. For example, each individual participating in a bike ride is required to fill out a form detailing the exact make, model and colour of the bicycle, as well as where it was manufactured and its value. The carnet is a substantial cost to the business as we pay for the pleasure of using a Carnet as well as paying a fee per bicycle, a percentage of the bicycle’s value."

"What this report demonstrates clearly," remarked Sir Nick Harvey, CEO of European Movement UK, "is that many of the barriers facing British businesses today stem from the loss of frictionless access to the European single market. While some tariff-free trade remains in place under the current arrangements, companies are now navigating customs paperwork, regulatory duplication and restrictions on labour mobility that simply did not exist before 2020. For many firms, particularly small and medium-sized enterprises, these additional frictions translate directly into higher costs, reduced competitiveness and lost opportunities.

"Perhaps the most powerful aspect of this report is that it allows businesses themselves to speak. From manufacturers and exporters to educators, freelancers and cultural organisations, the case studies presented here illustrate how changes to the UK-EU relationship are affecting real people running real businesses. These are not abstract statistics repeated by both sides of the argument; they are the real experiences of entrepreneurs who have had to restructure supply chains, absorb new administrative costs or reduce their presence in European markets simply to continue operating.

"Companies across the country have worked hard to adjust to the new trading environment. However, resilience should not be mistaken for satisfaction. The central argument of this report is therefore straightforward. If the United Kingdom is serious about boosting productivity, supporting SMEs and expanding exports, it must consider how its relationship with Europe can better support those goals."

As the UK Government builds on its UK-EU reset, there is a clear opportunity to listen to the voices of UK business and ensure that economic growth, support for SMEs, and cutting red tape are at the heart of that relationship. Our report has three recommendations to the Government.

1. Join the Single Market and Customs Union. This would address the root causes of current frictions by restoring regulatory alignment, removing rules of origin requirements, and establishing seamless trade in goods and services.
2. Restore freedom of movement. Labour mobility is not peripheral to economic integration: it underpins it. Restoring mobility would ease labour shortages, strengthen fiscal sustainability, and expand opportunities for UK citizens across Europe.
3. Give SMEs a voice in UK-EU negotiations. Smaller businesses have borne a disproportionate share of post-exit complexity yet often lack direct representation in high-level negotiations. Their voices must be embedded in policy-making.

Read the report, Freedom to Prosper, and sign the petition calling on the Government to deliver our three recommendations.