In Focus Commercial Credit
Small businesses speak out on Brexit
Research shows that companies are concerned about access to export trade and recruitment, but hopeful over reduced regulation
Mike Cherry
National chairman, the Federation of Small Businesses
Following the prime minister’s key Brexit speech last month, we published our initial findings from a six-month research project on the business impact of leaving the EU. This underlines the importance of the pledge to secure the greatest possible access to the EU Single Market.
Overseas trade is crucial to the economy and to the UK’s small businesses. We now know the future trading environment is going to change, with the UK set to leave the Single Market and the UK government seeking an ambitious free-trade agreement with the EU.
One in three (32%) small businesses are involved in overseas trade as an exporter or importer, with the vast majority trading with the EU Single Market – 92% of exporting small firms and 85% of importing small firms.
Exports to decline
As a result of Brexit, a third of exporting small firms, regardless of destination, expect their level of exports to decline, while one in five expect it to increase.
The difference is starker for current importers, where one third (31%) expect to see a decrease compared to 7% that expect to see an increase.
Small business exports have been on the rise since the referendum, with the lower value of the pound making UK goods and services more competitive. We know that our members, who export, are more likely to survive, innovate, and grow.
As the UK leaves the Single Market, any new agreement must maintain the current ease of trade with the EU and not lead to extra administrative or financial burdens.
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For a truly global Britain, we need the government to enhance specific support for small exporters to reach new customers and to negotiate ambitious UK-specific trade deals with large and emerging markets.
for those EU citizens who are already in the workforce here. The design of any future immigration system must ensure the demand will be met, twinned with a supply-side focus on improving UK education and skills. Equally, continuing to attract the very best high-skilled international talent is essential for small businesses operating in sectors such as digital and tech.
Our research clearly shows the real importance small businesses place on being able to access the skills and labour they require, particularly mid- skilled workers, who are non-UK EU citizens
Employment
One in five small business employers employ non-UK EU citizens, with the majority of these employees already residing in the UK with the right to work here.
In addition, almost half (47%) of our small businesses, which employ EU citizens, predominantly rely on mid-skilled workers, such as mechanics or care workers. Whereas, a fifth (21%) of businesses mainly rely on lower-skilled work such as farm workers and cleaners.
Our research clearly shows the real importance small businesses place on being able to access the skills and labour they require, particularly mid-skilled workers, who are non-UK EU citizens recruited here in the UK.
Mid-level skills are vital for small firms, and businesses call for the right to remain
www.CCRMagazine.co.uk Funding
The current EU funding landscape supports a wide range of activities that help business by supporting growth and regional economic development. Brexit could provide an opportunity for a total review and refresh of the delivery of business support and access to finance schemes, while also ensuring value for money for the taxpayer.
We welcome the clarity on the regulatory framework that comes with the Great Repeal Bill, which will help foster a level of stability in the short term once we have left the EU.
We look forward to opportunities for radical reform in the longer term that will reduce the cost of doing business, and boost innovation, trade, productivity, and growth. The UK will now start the official process of leaving the EU.
Evidence from our members shows the need for ministers to safeguard and promote an easy trading landscape, and to make sure small businesses have access to the right talent at the right time. We also see potential opportunities to revamp future funding for business support and access to finance, and for a lighter-touch regulatory system that promotes growth and productivity. CCR
March 2017
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