Some 60 per cent of small and medium-sized enterprise (SME) owners would vote to stay in the European Union with only 17 per cent supporting a ‘Brexit’, a study finds.
Accountancy firm Moore Stephens says SME owners worry that an erosion of the UK’s position within Europe could harm growth opportunities as the cost and complexity of trade increases for UK goods and services.
Mark Lamb, partner at Moore Stephens says that owner-managed businesses are concerned that future growth will be disproportionally hit by a UK exit as they would no longer compete on a level playing field in the EU.
‘Economic and political uncertainty is already impacting trade for some SMEs, and there is a fear that leaving the EU could severely destabilise business growth in the long-run,’ he adds.
The pound is already under pressure following London Mayor Boris Johnson and other political heavyweights coming out this week in support of ‘Brexit’, which could lead to volatile financial markets in the run-up to the referendum.
‘A Brexit is also likely to rekindle the Scottish independence debate which SME owners predict will further impact business – as we saw in the run up to the referendum in 2014,’ Lamb says.
‘Small businesses currently benefit from unrestricted access to the large European market and many could find increases in tariffs and potential trade restriction difficult to overcome, stifling international growth potential.’
Not all SME owners object to leaving the EU, however. Some SMEs welcome an exit from Europe primarily due to the excessive bureaucracy associated with EU trading regulations, especially in the food industry, and also because of the prospect of tax reductions which could benefit business.
‘Some argue that membership of the European Economic Area would allow companies to access the key benefits of Europe without having to deal with EU bureaucracy, similar to countries such as Iceland,’ says Lamb.
‘However, factors such as the loss of free trade agreements with non-EU countries which would have to be renegotiated, likely on less favourable terms as a smaller individual trading partner, and the loss of EU farming subsidies would be difficult and costly for SME to absorb.’
Further reading on Brexit
See also: Owner’s salary