Brexit: Covid debt leaves small business 'vulnerable' to no deal

Businesses in Wales face challenges preparing for a potential no-deal Brexit because of debt taken on to deal with coronavirus, according to leaders.

Nine out of 10 members report cashflow problems over the pandemic, says the Federation of Small Businesses Wales.

It comes as tensions in the trade talks between the UK and the EU increased this week - leading some to believe a no-deal Brexit is more likely.

Joshua Miles from FSB Wales said cashflow was firms' "main issue".

"One in five of our members have had government backed loans, others have gone into debt, used credit cards, some borrowed money from friends and relatives, and others have used their own life savings," he said.

"All of that means they just haven't had the time or money to prepare for something like a no-deal Brexit.

"That's going to be a real challenge for us going forward.

"It puts us in a very vulnerable position."

Gym boss Wendy Morris said she was worried about the economic impact of a no-deal Brexit

Carwyn Jones, the Labour MS for Bridgend and former first minister, said Brexit makes the UK economy particularly vulnerable.

"Every other country in the world has to deal with Covid, but the UK is the only country that has to deal with Brexit.

"It means the UK as a whole is uniquely disadvantaged."

Bridgend Conservative MP Dr Jamie Wallis said: "A Brexit deal is still a priority for the government, however, it must centre around free trade with other EU states.

"What's important is that any deal that we strike does not sacrifice the promise we made to the British to take back control of our money, borders and laws.

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"That is what the people who voted to leave the European Union expect."

Wendy Morris, who runs Energie Fitness gym in Bridgend, said she was worried about the economic impact of a no-deal Brexit but just wants the government to "get on with it".

"I think quite honestly that any kind of deal, including a no-deal is better than the state of flux we're in at the moment," she said.

"We need certainty. It impacts on everybody and I'm concerned that because of coronavirus the government is looking in two different directions."

Views are mixed among her clients.

Lisa Driscoll said: "I know Brexit's coming but I think we should focus on coronavirus."

Daniel Bayliss said: "If, hopefully, we can get coronavirus under control, get some kind of certainty on the negotiations for Brexit, then things can start to look a bit more hopeful.

"At the moment I don't think many people feel hopeful."