What does Brexit mean for SMEs?

posted by 3 years ago in Guide

Unless you’ve been out of the country with no form of communication for the past few months then you’re likely to be all too familiar with the EU referendum campaigns. Speculation about whether our nation will vote to stay in or leave the European Union has reached fever pitch with new polls released almost daily. So much so that new research (yes, another poll!) has revealed that only 44 per cent of SME owners say they’re still interested in the debate that’s being put to a referendum on 23rd June.

So here’s a quick small business owner’s guide to Brexit issues and basic arguments being put forward to leave or remain…

Finance

Leave:

  • The British government would have the opportunity to reduce banking regulations which may lead to lower funding costs
  • The gross cost of the UK contribution to the EU budget is £350 million a week
  • If the UK left the EU billions of pounds would become available for other priorities including supporting SMEs

Remain:

  • The UK is perceived as less creditworthy outside the EU which could cause a spike in interest rates and make borrowing more expensive for businesses
  • Greater costs when trading with the EU
  • Initiatives like the European Investment Bank plans to lend £100 million to SMEs in the UK will no longer be available

Red tape

Leave:

  • Vast regulations that originate in Brussels will no longer apply to British businesses
  • There will be a financial saving: it’s been suggested that EU regulations ‘cost’ British businesses €40 billion per year
  • Less regulation in the workplace would create more jobs

Remain:

  • It’s claimed that 88 per cent of businesses who export do so from Europe and benefit from the tariff-free trade that is supplied by membership
  • Many of the regulations or ‘red tape’ are claimed to be vital for protecting employees according to workers’ rights groups
  • Unless Britain was able to negotiate otherwise (unlikely as in the case of Norway and Switzerland) our nation would no longer have any influence over EU rules

Work and pay

Leave:

  • The UK could get more investment from countries outside the EU
  • Campaigners claim that lower migration within the EU could push wages up
  • Legislation on holiday pay and maternity leave could only be changed by Britain thus protecting small business owners

Remain:

  • Every day the UK gets £66 million investment from the EU
  • Three million jobs in the UK are linked to trade with the EU
  • EU policy has given greater protection in the workplace including guaranteed holiday pay and paid maternity leave

Immigration

Leave:

  • Campaigners have claimed that wages have been driven down and jobs have been harder to get for British workers following immigration from the EU
  • There would no longer be a bias towards accepting immigrants from the EU which would allow skilled workers from around the world more of an opportunity
  • Small businesses would be less likely to lose staff to other EU countries

Remain:

  • EU workers have the right to live and work in any member state
  • Workers from the EU have propped up industries such as housebuilding
  • The labour pool would be reduced for small businesses looking to recruit
  • Outside the EU the UK would still have to accept free movement to gain full access to the single market

Intellectual Property rights

Leave:

  • European Intellectual property is likely to continue to be protected through the European Patent Office

Remain:

  • The UK could miss out on the proposed ‘unitary patent regime’ that would make the rules around EU IP simpler for businesses