‘No-deal Brexit, on back of Covid, will finish off SMEs’
BRITAIN’S small businesses will be left with a mountain to climb and desperate for state aid if Boris Johnson’s pro-Brexit government decides to leave the EU without a deal in place.
As the latest round of UK-EU talks look set for further stalemate and argument, the country’s small and medium-sized enterprises (SMEs) – many crippled by six months of lockdown – are desperate for signs that they will not be left to rot.
The Federation of Small Businesses (FSB) said it wants the government to come up with a “small businessfriendly deal”, and provide “transition vouchers” to help companies which have been too preoccupied with the current economic crisis to contemplate planning for the next.
Meanwhile, business leaders in central England said no-deal Brexit would be the final straw for many.
Mike Cherry, the FSB national chairman, said the small firms that make up 99 per cent of our business community have no idea of what they will be transitioning to in less than four months.
He said: “The economy is in a very different place today compared to the last time we were told to prepare for a no-deal outcome. Small firms don’t have the time or money to get across new bureaucracy, or to stockpile.
“Negotiators need to agree a small, business-friendly deal – and swiftly. Concerningly, unlike all other major UK Free Trade Agreements, the draft terms of the EU deal don’t contain a dedicated small business chapter outlining how it will benefit firms of all sizes.
“We urgently need progress on this front.
“Given that small firms have been flat-out managing coronavirus-linked disruption for the past six months, the government needs to step in with substantial financial support to assist with transition preparations.
“Transition vouchers mark a sensible way forward: set sums that can be spent on expertise, tech and training that will ease the small business community’s move to a new relationship with the EU.”
Jennifer Thomas, the federation’s spokeswoman for Leicestershire, Northamptonshire and Rutland, said the region’s SMEs had been flat-out over the past few months trying to staying afloat, keeping their staff and rebuilding.
She said: “Before Covid, small businesses were already finding the uncertainly around Brexit a challenge, and were reporting feelings of Brexit fatigue at being constantly reminded that they needed to prepare, but not clear what or how exactly to prepare.
“Now, with their attention taken up by the coronavirus crisis, they need clear, specific guidance and financial support to make the necessary preparations to ensure that their recovery isn’t held back by unexpected barriers
or bureaucracy around finding staff or trading overseas – vouchers would go some way in allowing them to choose what services and support they specifically need.”
She said they will be using this autumn’s Leicester Business Festival to discuss with businesses and MPs the kind of support needed.
Richard Osborn, regional director for Excello Law in the Midlands, said: “It’s all a mess – and it is difficult to have faith in Boris’s assertion that all is
going to be good with a no-deal Brexit.
“You can’t help thinking that this will be the straw that breaks the proverbial camel’s back for some businesses, coming after the ongoing Covid issues.
“It’s just a perfect storm of external issues impacting on businesses – there is only so much that businesses can do in the face of these sort of seismic events, but I am sure that businesses will step up and show they are up to it.”
Eileen Richards runs Leicester
based Eileen Richards Recruitment and is vice-president of East Midlands Chamber of Commerce.
She said: “Businesses in Leicester, many of which are just starting to get back from local lockdown, are behind much of the UK where no enhanced restrictions were in place, risking a two-tier economic recovery.
“Despite many calls from the chamber and other businesses representation organisations for enhanced financial support for Leicester and
Leicestershire businesses affected by the local lockdown, government has been silent on this ask.
“Brexit may be one crisis too many for the business community to tolerate.”
Mukesh Patel is managing partner of Freeths law firm in Leicester and works closely with the region’s SMEs, which need certainty more than ever, given the impact of Covid.
He said: “The government needs to set out in clear terms how Brexit will operate in practice from January 1 so preparations can be made for orderly trade between the UK and the EU.
“Uncertainty is damaging and my concern is that vital supply chains will be affected – a point highlighted by the Road Haulage Association and the logistics industry.”
Business consultant Ian Borley, who recently retired as East Midlands senior partner for KPMG, said company owners craved certainty and stability, “both of which have been noticeably absent over the past few months”.
But he warned state bail-outs might not be the answer.
He said: “While Brexit potentially exacerbates the current position, I’m not sure that the answer is to throw money at all SMEs.
“What coronavirus – and Brexit, potentially – will demand of all businesses is the ability to move (change) quickly, to re-skill some of its workforce, to adopt new technology and to re-engineer supply chains.
“Selective, but meaningful, government support to help SMEs invest to achieve those objectives, in my opinion, will be hugely beneficial in realigning today’s businesses to the new reality, whether that’s with a free trade deal with the EU, or not.”
Alister de Ternant runs Associate Events, which has SME clients and runs business festivals in Leicester and the Black Country.
He said: “Small businesses, far and wide, have been through one of the most testing times in living memory and for most the challenge is one of uncertainty and how to survive in the short, medium and long-term postCovid.
“Throwing the ‘B’ word back into the mix adds a whole new level of complexity.
“The combined mixture of Brexit and Covid is likely to topple many SMEs and further destabilise the supply chain.
“Most are stringently planning accordingly, but, as different sectors feel the impact, even the best laid plans won’t necessarily suffice.
“We need a solid business proposition (and quickly) so that all businesses can take decisive action as to their next steps, for themselves and the economy at large.”
It is difficult to have faith in Boris’s assertion that all is going to be good with a no-deal Brexit Richard Osborn