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How the EU Referendum Might Affect SMEs

On Thursday 23rd June, the UK has been given the opportunity to vote on whether we remain inside, or leave the European Union. Many would say that the EU referendum debate has been wholly negative to date, with campaigners from both sides predicting disaster and disarray should their opponent win. There is no denying that whatever the decision the country makes, it will have life changing repercussions, not only for us, but for future generations.

As the date draws ever closer, it is obvious that many people are still unsure of exactly how they will vote. Conflicting polls show both the ‘Remain’ and ‘Leave’ campaigns ahead, depending on where the information was gathered. Perhaps the most positive aspect of the referendum though is the way it has encouraged debate across generations. Voters, both young and old, are being given the opportunity to shape the future of the country, and it appears that both are grabbing it with out-stretched arms. Traditionally, it is the older demographic who vote more regularly, whether nationally or locally. In the case of the referendum though, this dynamic is perhaps a little less clear, with emotions running high regardless of age.
The referendum means different things to different people as well. Some look to base their argument around borders and the control of immigration, whereas others point towards the potential economic impact, both positive and negative depending on your standpoint. Brexit campaigners criticise Brussels for appearing to rule the UK from afar. Remain supporters point to the EU’s part in securing workers’ rights, and the need to protect them.
At PA Business Support we have decided to stick to what we know, and present the arguments for and against membership of the EU in terms of the impact to small business. We understand that our clients, much like the rest of the country, may well be struggling to make a decision on which way to vote on the 23rd. Head and heart may not always meet, which is why for SMEs perhaps it is their business interests that should lead them towards a resolution.
Although we do have our own opinion on which way we feel the nation should vote, it isn’t for us to influence individuals one way or another. Instead, we intend to present the arguments equally, with pros and cons for both remaining and leaving clearly stated. Hopefully, when weighing up the argument in these terms, we can all begin to crystallise in our minds exactly what we feel is important to us, our businesses and our country, and vote accordingly.

Leave Campaign

  • There are certain trade regulations set out by the EU that many believe restrict British businesses from taking full advantage of the export of food. It is believed that by leaving the EU, the UK government will be able to loosen these regulations and create a more proportionate system for our suppliers.
  • Many point to the money we send to the EU as a good reason to leave. Were we to no longer have to pay those costs, we would immediately save €180 per person in the UK, extra funds that could result in tax reductions for UK businesses.
  • An excerpt from a letter* sent from 200 small businesses and entrepreneurs:

“As entrepreneurs, we deal with the EU’s constant diet of unnecessary regulations which add to our cost base, reduce our bottom line, and raise prices for our customers for no return. If EU institutions are tone-deaf to the genuine desire for change to remain competitive, the EU is destined to fail.
We believe in the future of our country. We believe that our economy can do better and create more jobs, without being held back by the EU, thus we should vote to leave.”

Remain Campaign

  • The UK has been a major part of the European Union for many years. This position as a major nation has allowed businesses to expand across the continent and trade in other European countries. There is a worry that should we leave, this position will be under threat, and changes in tariff for UK goods and services will hugely impact on a company’s ability to take advantage of the European market.
  • The lack of import taxes for businesses in the union mean that British companies are able to compete with every other country across the continent on exactly the same level. Stepping outside of this policy is likely to create uncertainty, something business owners seldom react well to. It is believed that less investment would come to the UK as a result, with potential investors unsure as to the country’s standing.
  • An excerpt from an article** by Chuka Umunna, former Shadow Business Secretary:

“Our small businesses benefit from the EU’s Single Market – tariff-free trade and full access to a market of 500m people. In the Single Market, they benefit from a simple set of rules meaning they don’t have to have multiple production lines due to differing product standards… small firms need stability and certainty to continue growing, not the economic damage and disruption that a leave vote would bring. The London School of Economics has warned that leaving the EU could make the UK economy 9.5 per cent smaller – similar to the damage suffered during the 2008-9 global financial crisis.”

Ultimately, the decision on Thursday 23rd June 2016 comes down to the British people. Politicians have spoken, campaigners have rallied, but it will be each and every person who puts a ballot in the box that will frame this country’s future and once again show the enormous influence of democracy. Whatever your decision, please make sure to read the arguments carefully, both for and against, and ensure that your head and your heart help to guide your vote.


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