As we approach the end of 2018, the future of Brexit Britain looks bleak. After a scandalous and polarising referendum, the UK voted narrowly to leave in June 2016. Two years on, and it seems like the government’s plan for our future relationship with the EU is still based on wishful thinking, brinkmanship and the slow realisation that the UK is no longer the world power it once was.
Both small business and multinational corporations have come out against the idea of a ‘no-deal Brexit’, which would make the UK a pariah to international businesses as it loses one of the biggest incentives to operate here: being a middleman between the EU and the international business community.
But we’re not talking about the interests of foreign businesses right now. We’re focused on what Brexit will mean for small and medium-sized businesses around the UK: companies like yours.
What Do You Think?
In the UK, there are some 5.7m SMEs, which account for over 99% of private sector firms and 60% of total UK private sector employment. SMEs also account for 73% of all net private sector job creation in the UK, creating about 2m jobs since 2010. Therefore, how SMEs respond to the uncertainty arising from Brexit has significant implications for the economy.
To assess the impact of Brexit on SMEs, we analysed a major government survey of some 10,000 UK SMEs. The government had posed various questions to these businesses regarding Brexit and its likely effects on their future strategic intentions. Unlike the simulated data often used in economic forecasts, this has the advantage of being based on the real world views of entrepreneurs and small business owners.
So what do the results tell us? The larger, more innovative, more export-oriented and hi-tech an SME is, the more likely it is to have concerns regarding Brexit. Those operating in hi-tech and service-related industries are also those most concerned.
What A No-Deal Brexit Would Mean
One of the main talking points for the Leave campaign was ‘regaining control of our borders’, meaning an effective end to freedom of movement. However, the contentious issue of the UK’s only land border with the Republic of Ireland has arguably done more to stall negotiations than anything else. The Tories and the Democratic Unionist Party entered an uneasy alliance in 2017 to stave off the possibility of a hung parliament, but the relationship between the two parties has never been cordial.
For businesses operating in Northern Ireland, the fear of a ‘hard border’ slowing down trade with the ROI has caused significant concern, and many are already preparing for the worst. Indeed, most of the country is terrified of a no-deal Brexit blocking ports and roads around the country.
What Can We Do?
If Brexit really is inevitable and irreversible as the Tories claim, any deal with the EU is better than no deal. Brexit may make you doubt the fortunes of your business, but remember that NWD Accountancy is ready to help you and your company. Take a look at our services and see what we can do for your firm.