Brexit: the points SMEs need to know

posted by 4 years ago in News

It’s being called “hard Brexit” by some and “clean Brexit” by others, however the message from Theresa May today is that a ‘half-in, half-out’ approach will not be sought when it comes to Britain’s future with the European Union.

In her much anticipated (and widely predicted) speech she said that the UK will leave the single market. In setting out her 12 objectives she pledged to create a new free trade agreement that would seek “the greatest possible access to the single market”. She confirmed that a final Brexit deal will be put to a vote in both the House of Commons and the House of Lords.

Here are some of the key Brexit points affecting UK businesses:

Trade

Theresa May commented that a “bold” and “ambitious” free trade agreement will be pursued with the European Union. She confirmed that the UK won’t be a member of the single market and stated “It is time for Britain to get out into the world and rediscover its role as a great, global, trading nation.” She said that Britain needs to increase trade significantly with fast growing markets. This was described as an “opportunity” and a “great prize”.

Customs

The Prime Minister also announced that a new customs agreement needs to be reached instead of further membership of the customs union. However, she said she had an “open mind” on keeping some elements. It was also made clear that Britain will seek tariff free trade with the bloc after Brexit. She said  “I want Britain to be free to establish our own tariff schedules at the World Trade Organisation.”

Employment law

It was stressed that future laws will be made in Westminster, Edinburgh, Cardiff and Belfast and that “not only will the Government protect the rights of workers set out in European legislation, we will build on them.” May went into more detail commenting that they will seek to keep pace with the changing labour market.

Innovation

Collaboration with European partners on major science, research and technology initiatives will continue. The Prime Minister commented that Britain has some of the world’s best universities and would continue to seek to attract the “brightest and the best”.

Philip Brennan, Head of Businesscomparison.com comments:

“Ever since the referendum, UK businesses have been calling for clarity about how Brexit will work and there has been frustration from company bosses who, naturally, want to plan for the future. This announcement is a step towards a clearer Brexit strategy. Two of the main points that stand out as being crucial to small business owners are the tariff-free trade with the EU and maintaining the common travel area between the UK and Irish Republic. The Government now need to work with the business community to ensure firms of all sizes are supported and equipped to deal with the changes that will inevitably affect them.

He adds:

“Many small and medium sized businesses struggle to access finance for the running costs and growth of their businesses. There may be a longer-term impact on the availability of finance, as a result of leaving the European Union, as it may make the UK less creditworthy and force a higher price for credit and reduce the amount of external financing for UK SMEs. Different banking rules and regulations could make it more difficult for continental banks to offer finance to Britain’s businesses.”