EU Referendum: Effects On Small Businesses
There has been much debate surrounding the UK’s decision to leave the EU. Some were left unhappy, frustrated and considerably worried about their future. Whilst on the flip side, others were, ecstatic and proud to finally ‘get their country back’ but still as confused about the future as the remain voters. However, no one can deny that the result will have a real effect on how the country goes forward from now on.
In the midst of all the propaganda and scaremongering between the campaigns, the one sector everyone seems to have forgotten about is the small businesses. They makeup around 60% of the private sector within the UK and constitute a large amount of import and exports for the UK. With 15.6 million people employed in the sector, they are the most vulnerable to the renegotiations with the EU and its outcome.
Should the UK be worse off because of Brexit, we will likely see much of this sector cutting their workforce and the possibility of millions losing their jobs, due to a poor economy and loss of key initiatives set out by the EU that would have provided them with increased funding and better opportunities to employ more skilled people
Single market
The single market is a trade agreement between member countries in the EU which allows the free movement of goods, services, and people. It provides us access to 500 million potential customers generating £9 trillion annually. In losing this benefit, the effects on SMEs would be severe. Digital and online businesses, in particular, would lose a vast customer base. In addition to other store based SMEs who rely heavily on import and export partners that the FSB has stated that 20% of its members trade in overseas countries, leaving us to suggest that this is therefore, a key component of their business operations.
Funding
Many of the small businesses that operate within the UK have received support from EU initiatives in either direct or indirect ways. Ironically, only a week before the vote proposals were being drawn up for a new funding circle that would look at injecting £100 million into UK businesses. However, due to the way that the referendum vote went, it is unlikely that this new funding scheme will ever materialise.
This is presenting another issue as businesses expect the promises to be fulfilled. Until a new prime minister is chosen you could definitely describe this as a time of uncertainty for the small businesses and the rest of the country.
Regulation
One of the main quarrels that people have with the EU is that it is overly bureaucratic and led by non-elected officials that would enforce rules without the people in mind.
Which is why the main desire the leave campaigners longed-for was the ability to make their own laws and regulations.
Thousands of regulations remain drawn up (many of which people saw as needless) however, the EU would say otherwise. With the long list of standards, a business has to me, it would thus require much more money, time and effort to start up a business and leave less time to focus on running and making revenue.
Regulation is inevitable but to what degree will it affect SMEs when the next government decide on the new laws for businesses in the UK? That remains a mystery…
Employment
Employment within the EU is big businesses for SMEs. Within the EU they have access to a much larger base of employers and customers. The FSB states that close to “30% of members are worried that the loss of the single market”, free movement of people and loss of EU membership will result in them losing vital skilled workers that they say are vital to the success and progression of their businesses.
There is still much uncertainty concerning the future of the UK in general, one thing we know for sure is that change is coming, just to what extent that will be is still unknown and who will benefit or suffer from this new reform?
In the short-term we can expect an unstable economy, but being that we are the first country to ever leave the European Union, no one knows that the future holds in store for us.