Expert Opinion: How is the EU Referendum Likely to Impact Small Businesses?
Posted by Oliver Meredew on May 20th, 2016.
With the EU Referendum campaigns for both the ‘Remain’ and ‘Leave’ camps now well underway, opinions on what impact the outcome of the vote is likely to have on the UK’s economic, political and social prospects have been coming from all sides.
When it comes to small businesses, it’s no easy task to sift through the countless predictions on offer and find some concrete opinions about what may or may not happen after the dust from the June 23rd vote settles.
In order to summarise the debate on this particular subject, here are just some of the forecasts for what might happen to small businesses in the event of either a ‘Brexit’ or a vote to remain in the EU.
The Official Verdict: What the Core EU Referendum Campaigners are Saying about Small Businesses
On the ‘Remain’ side of the argument, Britain Stronger in Europe are of the opinion that remaining in the EU will mean that small businesses continue to benefit from grants and other financial assistance and that even indirectly, the EU has already helped small businesses by improving physical and digital infrastructure, such as roads and high-speed broadband.
In opposition, Vote Leave do not specifically have a section on small businesses in their campaign rhetoric, but after picking through the points presented on their site, it can be established that VL believe UK businesses in general are threatened by the EU due to regulations favouring increasing market monopolisation by large, multinational companies.
VL assert that leaving the EU will not damage UK businesses and that once outside of the multinational union, it will be possible to establish a ‘friendly free trade deal’ with the EU, which will be possible by taking back powers to make ‘our own trade agreements’.
In the Wings – Secondary Campaigners for an ‘In’ and ‘Out’ Vote
Moving away from the officially chosen campaigns for and against, two prominent ‘unofficial’ groups, British Influence and Leave.EU have both been having their say over why small businesses could be better off in or out of the EU when it comes down to the vote.
British Influence, a pro-EU collective, have cited the free movement of EU citizens as a tangible reason to vote ‘In’, as without this lack of limitations on movement, it would be difficult for small businesses and entrepreneurs, among others, to set up and grow companies across the EU with relatively little obstruction.
Leave.EU, on the other hand, have stated that leaving the EU would not actually cut off this ability to move around the EU unimpeded, due to the importance of UK business and tourism. Additionally, the group have reiterated the argument that businesses would get a better deal due to reduced costs and increased legal protection coming from renegotiated terms with the EU.
Heads of UK Industry Weigh in on the Issue of Small Businesses in the EU
The Confederation of British Industry (CBI) has voiced its support for the ‘Remain’ campaign, based on the fact that ‘the majority of our members believe that remaining in the European Union is best for their business’.
The Director-General of the CBI, Carolyn Fairbairn, has argued that most associated small businesses are in favour of remaining in the EU, with ‘80% of the CBI’s members [saying] their businesses would be more successful within the EU’.
Additionally, the CBI’s site lists high levels of UK influence and access to a diverse market of skilled workers as reasons for voting ‘In’ when it comes to the crucial day.
The British Chambers of Commerce, by contrast, has declared itself officially neutral in the debate, although this has not prevented the organisation from being unwillingly dragged into the argument by association.
At the beginning of March, the then-Director General of the BCC, John Longworth, gave a speech in favour of a ‘Brexit’, stating that while reforming the EU was the ideal course of action, ‘I have come to the conclusion that the EU is incapable of meaningful reform’.
Owing to the clearly biased nature of this announcement, Longworth came under fire and ultimately resigned from his position.
Recent polling stats from the BCC’s members have placed a 54% advantage to the ‘Remain’ vote, while around 37% have been voicing their support for a ‘Leave’ outcome.
The Wildcard of the ‘Brexit’ Vote Campaigns
One prominent ‘Brexiteer’ who has been making his case heard has been former London Mayor Boris Johnson, who has made the argument for leaving the EU by claiming that:
‘In my view, the problem with the whole setup is that [the EU benefits] a minority of businesses who are able to interact with policymakers…and [those who are not] feel 100% of the cost’.
Johnson’s arguments remain problematic, however, due to unresolved concerns that he may merely be raising his profile in the Referendum campaign as a way of securing control over the Conservative party in the wake of a potential ‘Out’ vote or at the end of the Cameron administration at the latest.
As with all ‘Brexit’-related news, it’s worth bearing in mind that with over a month to go until the June 23rd vote, there are likely to be more announcements from experts in the field about what leaving or remaining in the EU could mean for your business.
If your business deals with imports or exports, you may find our article on the impact of the EU referendum on Pound Sterling exchange rates useful.
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