I work for a proud British family owned SME based in Cheshire and we have been looking at the whys and wherefores when considering what leaving the EU would mean for us.
Our company turnover was £12M for the last year and when we compare what we have purchased from the EU (£3.6M) compared to what the EU has purchased from our company in the same period (£600k) EU contribution to our turnover has been meagre to say the least.
The general public are being told that British companies are concerned about the economic climate because they are uncertain about the effects of Brexit on British business, at least that’s the way it is being portrayed in the media. This is not necessarily true, our company is currently in the middle of a multimillion pound investment programme to increase our capacity and product range, and a substantial amount of that investment will be spent with Italian & American engineering companies. Sadly, past experience has shown that we are unable to source high quality equipment from the UK.
The industry we work in is very heavily regulated by the EU, (we make life safety fire performance cables) and when we see competition from the Far East affecting our market, we feel very aggrieved because they are not similarly regulated and there is definitely an imbalance in support as we cannot rely on support from our own government or the EU.
15 years ago, we had thriving electronics assembly and plastic moulding divisions in our company but these have been decimated by competition from the Far East. This has resulted in job losses within the company as it was impossible to compete, even after investing in high tech automated production equipment. The EU tariffs imposed on our suppliers made it impossible to purchase electronic components at a competitive rate so the only way we could compete was to have products of our design manufactured in Hong Kong and shipped in to the UK as complete electronic assemblies. The EU did not help us feel stronger then in Europe, and it did not help keep jobs here in that instance as those areas of the business have now gone due to our inability to supply competitively.
We have also suffered at the hands of our own local government as our original business premises were blighted as part of a CPO process in our area. For years we were unable to expand and grow the business in other directions as we planned because we could not extend our buildings, and no one was going to buy our existing buildings which were under threat of a CPO. However, we have now completed a move to a new factory and picked up the pieces but it has been extremely hard work.
Turning to current challenges, it is the EU that causes greatest concern. Most of our business is conducted either in the UK or the Middle East with very little in exports to the EU. We have purchased American and Italian equipment for our manufacturing processes, and we understand that Italian manufacturers are heavily subsidised by their government, which of course is attractive to purchasers. American companies, being outside the EU, usually give better support then European companies.
We also find that we are restricted by EU employment legislation and rules. Employment laws are very binding for employers, and whilst we agree that employees and employers need a level of protection, this needs to be evenly applied and red tape reduced. British companies are quite rightly expected to maintain a high level of compliance to Health and Safety executive regulations, yet our competition outside of Europe can carry on regardless, paying little notice to the safety of their employees and in doing so cutting even more costs.
It is a great deal to expect of an SME when we get bombarded with requests from multiple companies up & down the supply chain to complete the ever expanding REACH questionnaires and requests for “Conflict Minerals” information etc. It is difficult to afford to allocate time to deal with these requests and maintain profitability.
In our small company we have a dedicated team who all perform many varied hands on roles, but as the EU applies more and more legislation in the form of Regulations, Directives and other acts, we find that to truly understand and comply with this legislation, we would need to employ someone full time to deal with it. In fact, in most cases it’s difficult to decide whether we need an in house lawyer or chemist to decode the document contents. It is not practical for an SME when trying to remain competitive, to do that. Evidently in attending to these questionnaires, regulations, etc. the EU is effectively taking vital resources away from us being able to run our business. Then there are the ever changing employment regulations.
The famous English Conservative industrialist Lord Hanson is often quoted as saying over thirty years ago, “There are 56 words in the Lord’s Prayer, 297 in the Ten Commandments and 1,300 words in the American Declaration of Independence but from Brussels, there are 27,000 words in a directive on duck eggs.”
Today’s version of that directive (COUNCIL DIRECTIVE 2009/158/EC) is a forty page document on eggs, This puts into perspective the amount of paperwork businesses have to contend with when dealing with the EU, Lord Hanson’s words are as relevant today as they were thirty years ago, probably more so.
We cannot identify what benefit the EU is to our company. Our small workforce works extremely hard to make a quality product and currently we are doing well to compete with cheap & counterfeit imports but worry how long that will last? Our accreditation bodies in the UK are quite happy to serve the Far Eastern companies which enable them to compete in Europe against us. We cannot be sure how effectively these Far Eastern companies are regulated and monitored by the accreditation bodies, but in comparison to the frequency we are monitored in the UK, we suspect there is a disparity which favours the Far Eastern companies.
Moving on to the question of freedom of movement across Europe, our deliveries of key raw materials, most of which come from Europe and have to be transported across Europe, often suffer delivery delays. Goods Vehicles travelling across France cannot do so during weekends. Most heavy goods vehicles over 7.5 tonnes are banned from the French road and motorway network every weekend between the hours of 10 p.m. Saturday and 10 p.m. Sunday.
Additionally the weekend truck ban is longer from early July to mid-August, when HGVs are banned from Saturday 7 a.m. to 7 p.m., and then from Saturday 10 p.m. to Sunday 10 p.m. In other words, during these July and August weekends, there is a 3 hour window of opportunity on Saturday from 7 p.m. to 10 p.m. for HGVs to reach their destination or get out of France to a country without weekend HGV bans. Also to compound the problem, recently deliveries have been adversely affected by the migrant crisis with delays incurred periodically and haulage contractors even refusing to travel at weekends for safety and insurance reasons. It almost makes a mockery of the Eurotunnel doesn’t it?
In an environment where we are expected to manufacture using just in time supply methods due to the high value of our main product (copper), it is difficult to see how the EU is helping facilitate this by allowing France to close its roads. Almost every month we lose valuable manufacturing time because of this type of delayed delivery.
These are just small examples of the impact of Britain being a member of the EU. We could go on with further examples but I am sure you will have been hearing this from other concerned companies. The problem as we see it is that some of the high profile media and press are being swayed by the Pro-EU campaign which is heavily influenced by Brussels. We feel that we cannot get our concerns brought to the attention of people who need to understand how the EU affects British SME’s, it would be good if our opinion was publicised to let people know just how difficult it is to work within the framework of the European Union.