The Prime Minister famously said that “Brexit means Brexit”. But what does that mean for small businesses? In a speech in January, Theresa May offered a bit more detail: namely, exiting the single market and some form of new relationship with the customs union, as well as commenting on future free trade deals with overseas markets.
FSB National Chairman Mike Cherry responded to the Prime Minister’s 12-point plan, saying: “We wanted to see the Prime Minister begin to sketch out a ‘pro-business Brexit’ by addressing trade, talent and transitional arrangements. Our members want to see this bold and ambitious free trade agreement so that they can continue to trade and operate within European markets. However, we will push the Government to guarantee whatever transition process is put in place ensures there is no cliff edge or gap in trade.”
Just over a fifth (21 per cent) of FSB members export, and 92 per cent of these businesses do so directly with the single market. The Prime Minister’s words “I want tariff-free trade for Britain” are reassuring, but remain just aspirations until the conclusion of the Brexit negotiations following the triggering of Article 50.
FSB has undertaken a comprehensive research programme to analyse the potential opportunities for small businesses upon the UK leaving the EU, and to define the areas that members most want FSB to lobby for in its negotiations with Government.
Following extensive engagement and focus groups with members across every nation and region of the UK, FSB is in the process of publishing the following four reports, as part of our Brexit series:
1. Access to EU single market and non-EU markets
2. Access to skills, labour and the ease of doing business within the EU
3. What’s next from EU funding?
4. Regulatory framework post exiting the EU
In January, FSB published an initial snapshot of its research and key findings so far, offering a flavour of the work ahead. “As the UK negotiating team assembles, evidence from FSB’s Brexit research programme will inform their work,” says Martin McTague, FSB Policy Director. “We now know the future trading environment will change. Our job will be to make sure the voice of UK small business is heard in all areas.”
However, export is far from the only issue. “Nearly a fifth of our members who have employees currently employ EU citizens, typically due to acute existing skills shortages in their region,” he says. An FSB member in Scotland, working in the construction sector, is quoted in the report saying: “If I didn’t have access to my non-UK workforce I would close down”. FSB is calling on Government to guarantee that non-UK EU nationals who either run or are employed by small businesses in the UK be granted the right to remain.
Yet Brexit undoubtedly provides an opportunity to improve many areas too. The current delivery of business support and access to finance remain patchy at best. FSB research in 2015 also showed that 53 per cent of members believed that “reducing the regulatory burden” should be the top policy priority for the 2015-20 Parliament.
“Much of the present regulatory framework has been heavily influenced by EU and wider international commitments, not least in areas such as employment law, health and safety and, most recently, in data protection,” says Mr McTague. FSB will lobby Government to keep the concerns and desires of small businesses top-of-mind among those sitting around the negotiating tables of Brussels.