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Third of SMEs want Brexit reversed

Nearly a third of SMEs (31%) want a new government that would reverse the Brexit decision, according to new research from Hitachi Capital Business Finance.

The survey asked over 1,000 owners and directors of small and medium sized enterprises nationwide which policies a new government could enact to help their businesses grow.

In Wales, which voted by 53% on 23 June to leave the European Union, this figure rose to 36% – the highest outside of London where 41% of SMEs would reverse the decision on Brexit. The proportion in Scotland was similarly high (36%), however their top priority from the list of options was a clear and final position on Scottish Independence – an issue for 49% of business owners.

The results showed a correlation between the desire to reverse the Brexit decision and a business’ outlook for the next three months. 45% of SMEs predicting decline or struggling to survive said they wanted a government that would reverse the Brexit decision compared with 27% predicting growth. This reflects previous research from Hitachi Capital at the beginning of the year which found that 61% of SMEs expecting decline said there were no opportunities for their business as a result of the UK leaving the EU, compared with 33% predicting growth.

Among the various sectors, 48% of those in the agriculture industry were keen to see a government that was committed to negotiating favourable trade deals beyond the EU – far higher than the average figure across all sectors of 24%. Amongst the manufacturing sector, this figure was 37%.

While Brexit prompted strong opinions amongst survey respondents, the key demands from SMEs were a reduction of red tape (40%) and lower taxes (35%). Indeed, red tape reduction was a top three wish for every sector in the survey, peaking in the agriculture sector where it was a priority for 70% of business owners.

Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, said: “In recent years, our research has shown SMEs to have a bullish resilience and their business confidence has not been adversely swayed by external events such as the Scottish or EU Referendums or General Elections.

“The latest view from SMEs on Europe, particularly those struggling, is a reminder to whoever forms the next Government that many SMEs value an era where British small businesses can have a positive working relationship with Europe rather than a confrontational one. This perhaps offers a clue on the kind of leadership small businesses would like to see in how the EU exit negotiations are conducted.

“More broadly and beyond Europe – with around two in five SME’s predicting growth over the last 12-months, their shopping list in our survey for a new Government gives a clear picture of the issues they want tackled to ensure that small businesses can continue to be driving force behind the British economy.

“Simplified regulation, re-visiting business rates, lower taxes and holding interest rates are also big issues that tackled well will help small businesses believe they can grow.”

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