An impartial guide to the Brexit for small businesses
The abominably-named 'Brexit', as you know, refers to Great Britain withdrawing from the European Union - a decision which we can all influence during the June 23 referendum. The battle lines have been drawn; now it's simply a case of working out (in the paraphrased words of The Clash) 'Should we stay or should we go?'
In all seriousness, of course, it's not that simple and there are a number of factors to take into consideration - especially if you are running your own enterprise. What, then, are the impacts of a possible exit on a small business?
Currently, as a member state, the UK enjoys good trade terms with the EU (to which some 51 per cent of our exports go). The benefits on offer include minimised red tape and avoiding exporter tariffs. That said, if we were to leave, we might be able to secure deals with other huge trading nations such as the USA, China and India. The Economist
says that Britain would be able to negotiate new relationships with the EU that exist without us being bound by EU law - we'd have the power to make our own laws and have greater control over our trading, much like Norway does.
At the same time, the argument against Brexit highlights that as a lone wolf, we could have a lesser influence on world trade - the EU is a huge presence. There's also a concern that Brussels could make an example of the UK, making it harder for us to do cross-border business. This could be balanced by the introduction of British legislation which makes Britain a more competitive and attractive place to do business, one of which may finally see the repealing of the Sunday
Trading laws and all that goes with it.
Europe - apparently - does not want Britain to Brexit, as we are such a valued trade partner. Data from the International Monetary Fund (cited by The Economist) shows that 6.6 per cent of EU goods are exported to Britain. We send our goods predominantly to Germany, the Netherlands, France, Ireland and Spain. Whether these relationships are put at risk or strengthened under Brexit is yet to be determined.
Travel and work
At the moment we Brits enjoy free passage and the right to work in the EU, without need for visas. This allows for visits to trade conventions, supplier meetings and going on exploration trips that could result in the development of new products. Depending on the route we go down, should the vote swing toward 'leave', this ease of passage could be jeopardised; a major point on the remain camp's list.
That said, Brexit would also mean that we could (and we deliberately only say 'could' here) abandon certain EU employment legislation, such as that which revolves around health and safety. This may improve recruitment and working practices. It's worth knowing, however, that many so-called EU
laws are actually English laws which may simply have been adapted to fit with the EU, so there may not be any marked differences.
It's not yet clear whether any EU nationals working legally in the UK will be able to stay, though it's an important consideration because this could drastically impact the UK's workforce.
British economy can grow: just like handing over your subs at Scouts, the UK has to pay for EU membership. It is thought this amount totals some £350 million per week, so not only could substantial savings can be made if we didn't have to stump up, it could be reinvested into the most needed areas and help the economy grow. Whether the UK remains in the EU or not, though, we would still have to pay to access the single market.
If we do leave, there's a possibility that the economy could also be positively impacted through not having to wait around for Brussels' bureaucracy, instead being able to effect change at a faster and more profitable rate. There's equally a possibility of the reverse, with Bank of America Merrill Lynch warning that the pound could 'depreciate sharply'
and Morgan Stanley suggesting Britain could suffer another recession.
You're unfazed, apparently
There have been lots of studies commissioned with the hope of canvassing a definitive stance on Brexit. A poll by YouGov on behalf of easyJet
found that the majority of Britain's business owners 'remain unfazed' at the prospect of leaving the EU. Apparently, 70 per cent of respondents (SMB owners) said EU membership has no impact on their business planning, compared with 26 per cent who cite either major or minor effects. That said, less than half confessed to possessing sufficient knowledge to make an informed decision.
Whether or not you yet know which way you are going to vote, there's no denying it's an interesting situation.
Also see related content...
Changes to the Consumer Rights Act: What do they mean for me?
What would an EU exit mean for small businesses?