Whether you voted for it or not, Brexit is here, and we are already beginning to see the effects. As of 1st January 2021, the United Kingdom is longer part of the European Union. We will feel the ramifications for generations, good and bad. British businesses at large are grateful the government prevented the UK crashing out of Europe without a deal. Yet, even with an agreement, the long term outlook for UK trade is uncertain. But, Brexit does offer some new opportunities.
As the clock struck midnight on 31st December 2020, problems at the border began. Every media outlet has reported long delays and mountains of paperwork. Companies based in the EU are now charging consumers import taxes and VAT. Previously, British businesses had few problems buying goods from European companies as part of the EU VAT area. Across many industries, particularly specialists, British companies are facing big import charges.
Even with a deal, the long term outlook for UK trade is uncertain. Cross border supply chains, in particular, are slow and expensive in some cases, and broken in others. No longer tied to EU regulations in the same way, it may now also be easier for many industries to source materials in the UK.
Due to the uncertainty surrounding trading with the EU, Brexit will afford British businesses and consumers a fantastic opportunity to look locally for new trading partners.
While the EU will always be an important trade partner, we strongly believe it’s now time to look to local businesses to steady the ship. If your supply chain is fractured due to Brexit, negotiating new deals with local suppliers could well be the best way forward for a multitude of reasons.
Better customer service
As anyone who has bought any equipment from outside the UK knows, having it repaired or replaced can be a logistical nightmare. First, you need to get the equipment back through customs, which can cost YOU money.
Waiting weeks for the return of essential equipment is infuriating. Since Brexit, the wait times for getting equipment through has grown from weeks to months. Much of IKEAs flatpack furniture remains stuck in the EU, and they have struggled to meet demand. Many customers have received only half of their orders, creating a customer service nightmare.
Choosing to buy from a British manufacturer means shorter wait times to have equipment repaired or replaced. Often, British businesses are capable of next-day delivery with no extra charges. Eventually, the EU will resolve its problems at the border, however, the higher costs are unlikely to go away.
Additionally, as the UK is no longer part of the EU VAT area, many consumer and business purchases will include extra costs and sales tax.
Buying British is sustainable
Climate change, sustainability and reduced carbon footprint are all causes for concern and will be for decades to come. Governments across the globe are mandating increased accountability for companies who are heavily contributing to global warming. Additionally, the UK government offers tax relief for companies that can show that they operate in an environmentally efficient way. Many other countries are doing the same.
One of the simplest ways for any British business to be more sustainable and lower their carbon footprint is by reducing the number of products they regularly order from abroad.
While buying British may only save a few hundred miles of driving a week for a small business, over a decade, or a business’s lifetime, this adds up to an enormous amount of miles saved.
Given the disastrous outcome of ignoring climate change, every British business has a responsibility to do their part in helping to meet the UK government's target of being a carbon neutral country by 2050.
A survey by Global Data in 2019 showed that younger generations are more actively searching for sustainable products. The survey showed that 82% of people between the ages of 16-24 agree that retailers should source materials ethically and sustainably. As the world warms up, businesses will be looking for more sustainably sourced goods to ensure their brand reputation is not tarnished by being known as a polluter. Consumers choosing sustainable, or green goods due to ethical concerns could soon become a cultural norm.
There are many benefits businesses can reap from going green. These range from subsidies to increased popularity and demand for goods and services. Eco-friendly business practices can help improve your business image into a company that is looking to the future.
Buying local boosts the British economy
An additional effect of British companies increasing their domestic trade is that they support the local workforce, which puts more money into the British economy. If these other businesses also choose to increase their trade within Britain, this will further boost the British economy. This snowballing effect is part of an economic principle called the velocity of money, which describes how fast consumers and businesses spend money in an economy. Essentially, it measures how quickly groups and individuals spend money on goods and services. A high velocity of money means the economy is thriving and expanding; a low velocity of money means contraction.
Buying local can also alert companies to a gap in the market. For example, British car manufacturers might have no British businesses to purchase batteries from for their new electric car range. This market gap could motivate the car manufacturer, or another business, to fill it themselves. These new organisations would, in turn, create jobs and stimulate the British economy further.
Buying British also helps keep skills and traditions alive. Take furniture making, for example. Choosing to buy furniture for your company office from a British manufacturer helps keep skills passed from generation to generation alive. It also stimulates the local economy by keeping or creating local jobs. Additionally, buying your food from a local producer helps keep local growers and farmers in business. In some cases, these local brands can become global players, like Dr Martens, which is currently planning a £3bn flotation on the London stock exchange.
There are also some ethical concerns about importing from the rest of the world. While worker standards within the EU, the UK, and the USA are high, every country cannot say the same. By choosing to buy products from local sellers, you know workers have been paid a fair wage and work in a safe environment. The manufacturing industry within the UK is subject to stringent regulation; worker safety is a top priority.
Value of the pound
The present value of the pound further strengthens the case for buying British. While GBP is currently weak against the Euro, exporters can take advantage because British goods are cheaper and therefore more desirable for European businesses. However, this is bad news for importers, as goods from the EU are more expensive than previously. The best option, once again, is to look locally for suppliers. Buying British will prevent your business from being overcharged for consumables and other products from Europe and the rest of the world.
For some British businesses, buying a significant amount of materials or consumables from within the UK is not viable. However, most companies are able to search locally for at least some of their supplies to keep their businesses running.
The case for buying British is clear. Sourcing your goods from within the UK allows your business to be more sustainable and profitable while receiving a higher standard of customer service and faster delivery times.