SMEs divided over Brexit

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There is a lot of discussion amongst Ellis & Co. clients at the moment about the upcoming European Union referendum.

We’ve recently conducted our own unscientific straw poll of a number of clients, which revealed that 60% were in favour of remaining in the EU, 30% wanted to leave and 10% were still undecided.

This compares with a survey carried out by Zurich, which saw 1,000 SME decision makers asked for their thoughts on the upcoming referendum.

Almost half (49%) of those surveyed said they would vote to stay in the EU, with one of the key reasons for doing so being economic growth. More than two in five (42%) of those surveyed believed that leaving the EU would have a negative effect on the UK economy over the next five years. Just one fifth (19%) thought that leaving the EU would have a positive effect on the economy.

Another key consideration emerging from those polled was the skills shortage, with nearly three quarters (73%) of participants indicating that skills shortages are already an issue for businesses across the UK.

If Britain were to leave the EU, more than a third (35%) of SMEs said there would not be enough skilled workers in five years’ time. Respondents agreed almost unanimously that Britain needs to work harder to develop its own skilled workers (92%).

To add to the concerns, Chancellor George Osborne said earlier this week (23rd May) that leaving the EU would tip the country into a year-long recession. As many as 820,000 jobs could be lost within two years, Osborne claimed.

The results of the survey do suggest, however, that Britain leaving the EU may have less of an effect on certain business sectors than first thought. 51% of respondents in the construction sector, and 51% working in manufacturing, indicated that they would not be too concerned if Britain were to leave the EU. Both industries are widely considered to be reliant on trade links with the EU, but respondents suggested that leaving would not have a big impact on import/export trade.

Nevertheless, SME decision makers in the North West are more in favour of staying, according to the survey. 58% of those polled by Zurich would vote to remain in the EU, a view shared by business respondents based in London and Scotland, who made up the largest proportion of business decision makers in the survey. Three fifths (61%) of those based in London and Scotland are in favour of remaining in the EU.

The least enthusiastic about remaining in Europe are SMEs in the East of England with 56% in favour of Brexit.

Robert Ellis, Principal at Ellis & Co., said “A small poll of our clients mirrored the above results in the North West with 60% voting to remain, 30% to leave and 10% undecided.

“The main reason for staying is slower growth if the UK votes to leave and its impact on business profits. The reasons for opting out are controlling immigration and the poor state of EU finances.”