SYLVIE DOUGLIS, BYLINE: NPR.
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WAILIN WONG, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Wailin Wong.
PADDY HIRSCH, HOST:
And I'm Paddy Hirsch. Fifty years ago, the U.K. joined what is today called the European Union. This was never a particularly comfortable marriage. And three years ago, Britain and Europe were finally divorced.
WONG: Britain has for years been split on the issue of whether to stay in the EU. But in a 2016 referendum, nearly 52% of voters said they wanted out. Three years after Brexit, however, 57% of voters polled say they now believe it was a mistake.
HIRSCH: Yeah. Only 1 in 5 Brits think that Brexit's going well, and businesses feel the same way. Most firms trading with the EU say the existing relationship with Europe is no help at all when it comes to increasing sales or growing their businesses.
WONG: Call it regret. Call it Regrexit (ph). Whatever you want to call it, Brits are feeling it. Today, we're going to look at why the opposition to Brexit has gotten so strong recently and why U.K. businesses in particular are feeling buyer's remorse.
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WONG: Brits are not happy about Brexit. Polls, if you set any store by them, show a 10-point swing in the last year or so that now the majority of British voters think it was a bad idea for the U.K. to leave the EU.
HIRSCH: Now, this doesn't necessarily mean that a large number of people who voted to leave are now regretting their decision. Most of those people, in fact, are sticking to their guns. But the polls today are counting people who, back in 2016, didn't have the vote - young people, many of whom are unhappy about the separation.
WONG: And then there were all the people who didn't vote in 2016 but could have, many of whom are now quite voluble about their discontent with Brexit.
HIRSCH: They should have voted. That sounds like real Regrexit to me...
HIRSCH: ...Or maybe a guilty conscience. I mean, you know, you got the vote. You should use it.
WONG: Exactly. Maybe the biggest reason we're hearing about regrets about Brexit is because of the effect that leaving the EU is having on British business.
LARS ANDERSEN: I'm frustrated with Brexit. As a businessperson, it doesn't make sense. It adds to red tape. It adds delays. It adds costs.
HIRSCH: This is Lars Andersen. He's CEO of London-based company My Nametags.
WONG: Lars has been selling his name tags for 18 years all over the world, but his biggest market is Europe. And back when the U.K. was part of the European Union, that was fine.
ANDERSEN: Before Brexit, My Nametags was able to ship its labels directly to customers anywhere in the EU. That was very simple, very easy.
HIRSCH: And the reason that was simple and easy was because when the U.K. was part of Europe, it was part of a single market. There were no trade barriers or tariffs. There were no customs. So British companies like My Nametags were able to trade with customers in France or Italy every bit as easily as a New York-based company here in the U.S. can trade with clients in California or Idaho or anywhere else within the United States.
WONG: But now that the U.K. is no longer in the EU, it's no longer part of that single market. Now there are customs and taxes and all sorts of new rules to be obeyed.
ANDERSEN: This has caused huge extra costs and delays for us, so it's very bad for us as a business. It's kind of singularly annoying to kind of - knowing that we could do more and easier and cheaper.
HIRSCH: And Lars isn't alone in his frustration here. William Bain is the head of trade policy at the British Chambers of Commerce, which is kind of a support network for U.K. companies. His organization polled a thousand businesses and found a lot of dissatisfaction with the so-called trade and cooperation agreement that the U.K. has negotiated with the EU.
WILLIAM BAIN: We saw 77% of companies saying they don't feel it's contributing to growth in their business. Quite a large number have said it's either disrupted their trade with the EU or, in some cases - about a fifth of companies have said they've stopped altogether.
WONG: The dissatisfaction stems from a number of areas. William says one big promise made to business by Brexiteers was that once the U.K. stood alone, new markets would open up.
HIRSCH: Yeah. The prediction went something like this - that once the restrictions that EU manufacturers have to follow were lifted from U.K. companies, those firms would find it easier to sell into non-EU countries like China or India. But that has not happened.
BAIN: What opportunities are there in terms of being in that position? There haven't been any found.
HIRSCH: The fact is that the EU remains Britain's largest trading partner, which means that another prediction that U.K. businesses would finally be able to rid themselves of all of that European red tape hasn't come to pass either.
BAIN: Goods have to meet EU regulatory standards in order to be sold in the EU single market. And the fact that the U.K. has exited the EU has not changed that.
WONG: The result is more bureaucracy, more regulation, more taxes, all of which means more costs to business. William estimates companies are paying as much as $16 million a year in increased duties.
HIRSCH: Now, if you spread that across Britain's millions of businesses, these increased costs don't look that enormous, of course. And a big company with a high turnover might find them more of an irritant than anything else. But to a small firm doing business on thin margins, those costs can be ruinous. Some companies are toughing it out. Others are folding completely. Our name tag maker, Lars Andersen, decided to get creative.
ANDERSEN: We have recently set up a subsidiary in Dublin for Brexit reasons, purely.
WONG: The idea is that the Irish subsidiary based in the EU now processes the labels for sale in Europe exclusively. It's expensive. It means hiring more people and opening a new facility.
HIRSCH: Yeah. It also means that a client in Paris who wants name tags will now have them shipped from Ireland, which is literally more than three times the distance from the London facility, which is, of course, completely absurd. But that will save Lars a lot of hassle in the long run.
ANDERSEN: It is helpful to have a company inside the EU dealing with all the paperwork, so it's a lot easier for us.
HIRSCH: Now, you can't accuse Lars of Brigret (ph) or Regrexit or whatever you're going to call it. He was opposed to the U.K. leaving the EU, and he's not really surprised that things aren't going so well. But what about small business owners who did vote to leave? How are they feeling about how things have turned out?
STEPHEN BRITT: I was definitely for Brexit. I have been a Brexiteer before the name was invented. I don't regret voting to leave at all.
WONG: This is Stephen Britt. He owns a warehousing company called Anchor Storage, and he acknowledges Brexit has not gone smoothly.
BRITT: I'm not over happy about it. It could have been handled significantly better than it has been. Our own bureaucracy over here, our government, have not really got down and done the job properly.
HIRSCH: Now, Stephen's company has to handle an increase in red tape and regulation like every other business dealing with the EU. But he says it's worth the hassle and pain because it means the U.K. has finally broken free of the political control that the EU exerts over its members.
BRITT: We don't want to be part of this big political organization. We want to make our own rules for the way we live, which is one of the main reasons we wanted to get out of the EU in the first place. It's really up to them just to get off their high horse and realize that we didn't want to be part of their club, but we're more than happy to trade with them.
WONG: No Regrexit there. But the groundswell of public opinion against Brexit has prompted some speculation that there could be a new referendum on the issue. There doesn't seem to be much support in the big political parties for a new vote, however, which means that Brexit is probably here to stay.
HIRSCH: And that means that British business owners, regardless of how they feel about Brexit, are now focused on what form the trading relationship between the U.K. and Europe is going to take in the future. After six years of negotiations, that is still not a done deal. Lars Andersen says he believes that's because the U.K. still hasn't quite figured out exactly what it wants.
ANDERSEN: We're sort of trying to move away from something, but we're not quite sure what we are looking for to replace it. So it's very difficult to decisively move towards an agreement when we don't really know where we want to go.
HIRSCH: Until they figure that out, uncertainty will continue to reign, and British companies, in true British fashion, will have to find a way to muddle through. Many will be hoping that the EU and the U.K. can find an agreement in the first quarter on what are the biggest issues in their trading relationship - that is the Northern Ireland Protocol, which is a whole other story.
WONG: Are you going to bring it to us?
HIRSCH: I am going to bring it to you. It might take me a few weeks to figure it out, but we'll get it to you before the end of the first quarter. How about that?
WONG: I can't wait.
HIRSCH: Mark your calendars.
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WONG: This episode of THE INDICATOR was produced by Jamila Huxtable and engineered by Robert Rodriguez. It was fact-checked by Sierra Juarez. Viet Le is our senior producer. Kate Concannon edits the show. And THE INDICATOR is a production of NPR.
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