SMEs to carry on with Europe trade

Yorkshire Post - Business - - FRONT PAGE - IS­MAIL MULLA BUSI­NESS RE­PORTER Email: is­ Twit­ter: @Is­mailMulla

TALKS: The ma­jor­ity of small busi­nesses in Bri­tain that cur­rently trade with Euro­pean mem­ber states will con­tinue to do so af­ter Brexit, re­gard­less of the out­come of the ne­go­ti­a­tions, ac­cord­ing to a sur­vey.

The study sug­gests SMEs are still fo­cused on keep­ing their EU trade ar­range­ments in­tact.

It’s clear our trad­ing land­scape will re­main very Euro-cen­tric.

Rus­sell Smith, di­rec­tor of Rus­sell Smith Char­tered Ac­coun­tants

THE MA­JOR­ITY of small busi­nesses in Bri­tain that cur­rently trade with Euro­pean mem­ber states will con­tinue to do so af­ter Brexit no mat­ter what the out­come of ne­go­ti­a­tions is, ac­cord­ing to a sur­vey.

Just 5 per cent of Bri­tish SMEs cur­rently work­ing with EU part­ners or sup­pli­ers will seek to take ad­van­tage of in­ter­con­ti­nen­tal trade deals, data from fi­nan­cial firm Rus­sell Smith Char­tered Ac­coun­tants shows.

In­stead, 88 per cent in­tend to main­tain their re­la­tion­ships fol­low­ing Brexit, even while fac­ing the prospect of red tape and in­creased trad­ing tar­iffs. The sur­vey of over 300 Bri­tish small busi­ness own­ers found that of those 12 per cent, that would look to change their trad­ing re­la­tion­ships, the re­main­ing 7 per cent would move to do­mes­tic op­tions, mak­ing in­ter­con­ti­nen­tal trade the least favourable choice.

Di­rec­tor Rus­sell Smith said: “There is a lot of chat­ter about trade with coun­tries like the US and China. SMEs, though, are much more fo­cused on keep­ing their EU trade ar­range­ments in­tact.

“Whether out of loy­alty, ease of ac­cess, cur­rent lev­els of sat­is­fac­tion or ap­pre­hen­sion of in­vest­ing re­sources in new trad­ing part­ners, it’s clear our trad­ing land­scape will re­main very Euro-cen­tric even af­ter we of­fi­cially leave the EU.”

Rus­sell Smith Char­tered Ac­coun­tants also sur­veyed 55 SME di­rec­tors and CEOs on Brexit.

The sur­vey found that 56 per cent of SMEs chose to re­main and that 18 per cent of those who backed leave would change their vote in a sec­ond ref­er­en­dum, com­pared to only 8 per cent of re­main­ers.

The ac­coun­tants also un­cov­ered that 47 per cent of small busi­nesses have been eco­nom­i­cally un­af­fected by the vote so far while of those that have seen an eco­nomic change, 44 per cent ex­pe­ri­enced a neg­a­tive or very neg­a­tive ef­fect.

Only 7 per cent said they have been pos­i­tively or very pos­i­tively af­fected by the Brexit vote.

Rus­sell Smith Char­tered Ac­coun­tants found that 80 per cent of SME own­ers in the UK want free­dom of move­ment and goods to be part of a Brexit deal.

Post-Brexit, 40 per cent of busi­nesses ex­pect no change in how they op­er­ate.

Last month, the SME Con­fi­dence Tracker from busi­ness fun­der Bibby Fi­nan­cial Ser­vices found that 35 per cent of small firms are re­signed to hard Brexit and that only one in five, 20 per cent, ex­pect Brexit to be achieved by March 2019.

Brexit is now ac­cepted as a done deal with less than one in ten, 8 per cent, pre­dict­ing that divorce from the EU will not go ahead. While the vast ma­jor­ity, 71 per cent, of SMEs are clear that Brexit will hap­pen, over half, 51 per cent, are an­tic­i­pat­ing a tran­si­tional phase be­fore the UK can leave the Euro­pean Union.

SMEs are agreed that Brexit will hap­pen but what it looks like is still up for de­bate with the busi­ness com­mu­nity evenly split. Over a third of SMEs, 36 per cent, are ex­pect­ing a soft Brexit, while an­other third, 35 per cent, are pre­par­ing them­selves for a hard Brexit.

Ed­ward Win­ter­ton, UK CEO at Bibby Fi­nan­cial Ser­vices, said: “Un­cer­tainty isn’t good for busi­ness and Brexit is un­cer­tainty in its most acute form. One thing the SME com­mu­nity is cer­tain about is we are leav­ing the EU. What is less clear is what Brexit will look like.”

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