Small businesses call on next UK government to lower costs and make international trade easier

Small firms in the UK have multiple concerns about international trade, including worries about costs and the ease of doing business, new analysis from the Federation of Small Businesses (FSB) shows.

According to the results of an FSB survey released on 17 June, 22% of small businesses are worried about the cost of importing and exporting across the next five years, with 27% keen to see a fall in both the cost and time it takes to import and export goods.

With voters in the UK heading to the polls for a general election on 4 July, the FSB has set out a series of recommendations for whichever party forms the next government. Published on 7 June, the FSB's general election manifesto highlights a "host of policy areas where legislative action is required to improve the operating environment for small businesses", calling on all competing political parties to commit to the creation of a Small Business Act. Almost three in 10 small firms surveyed by the organisation say they believe any such act "should focus on making it easier for the UK to trade internationally."

In addition, the manifesto argues that the next UK government should create a "'think small first', pro-export environment, so all departments with a bearing on trade are working to an agreed shared strategy."

The FSB's findings come at a time when a range of factors – from the UK's decision to leave the EU to supply chain constraints and inflation – have combined to make international trade a tough proposition for many SMEs.

A recent trade snapshot report from the Food and Drink Federation (FDF), a UK industry association, underscores the challenges. According to HMRC figures compiled by the FDF, Q1 2024 export volumes for food fell by over 20% year-on-year to one of the lowest levels on record in the last 15 years, thanks to a combination of rising costs, the global economic slowdown and what the FDF calls "costly and unnecessary regulatory burdens".

Trade 'fuels progress and fresh ideas'

For Tina McKenzie, the FSB's policy chair, imports and exports are crucial to the health of the wider economy. "International trade fuels progress and fresh ideas, and without it, our supply chain crumbles," she says.

"Small firms who reach global markets also tend to grow faster and be stronger during tough economic times," McKenzie adds.

"However, our research presents some troubling figures, so the next government will therefore need to keep trade at the top of their agenda."

"Strengthening trade links with major markets like the EU and USA is key to the UK's future as a global trading force. This would also incentivise small firms to start and continue trading."