Today marks one year since the referendum that ultimately decided the United Kingdom should leave the European Union. Here at Informi, we were keen to find out how small businesses feel they have been affected in the year that has passed, and their thoughts on what Brexit may ultimately mean for their business. So, we spoke to around 800 small business owners across the UK, surveying equal numbers of Remain and Leave voters, to find out. The results show that there is still a great deal of uncertainty for business, as we wait for the final Brexit details to become clearer.
Brexit: The Story So Far
We first wanted to establish whether owners had seen many immediate changes to their business as a result of the referendum vote.
While the vast majority reported business as usual, we found that:
- Almost one in ten (9%) of owners have reduced the number of EU employees in their business, while only 2% have increased the number.
- 9% of owners have reduced the amount of exports to EU nations they make, compared to 5% who have managed to increase exports.
- 7%, meanwhile, have seen an increase in exports to non-EU nations, with 6% reporting a fall.
- 9% of owners say they have reduced imports from EU markets, compared to 3% who have increased them.
- 6% of owners, meanwhile, have reduced imports from non-EU markets, while 5% have increased them.
These answers show that a handful of businesses may already be considering how to reduce their reliance on EU markets, ahead of the change in the relationship between the UK and the EU.
Looking to the future
Next, we asked business owners to do some future gazing to see how they anticipate their business being affected by Brexit. We first asked whether they believe Brexit will make it easier or harder for small businesses to thrive in the UK.
We found a fairly even split in the response: 37% of owners believe it will make it harder, while 33% said that Brexit will make it easier, and 30% said they don’t know.
Owners were also invited to share views on some of the likely changes that Brexit may cause over the coming years. We found that:
- 23% of owners think that Brexit will have a negative effect on their ability to trade with EU countries, with 15% believing it will have a positive effect.
- In contrast, 22% believe that there will be a positive effect on their ability to trade with non-EU countries, with 10% thinking there will be a negative effect.
- Almost a quarter (24%) think it will lead to positive changes in business regulation, but 18% think it will lead to negative changes.
- 15% think Brexit will have a negative impact on their ability to recruit unskilled employees, with just 11% thinking it will have a positive effect.
- Over a quarter (27%) believe Brexit will have a negative effect on interest rates, with only 15% perceiving it may have a positive effect.
- Nearly a third (29%) think Brexit will lead to a negative effect on foreign exchange rates, with only 15% again believing there will be a positive impact in this area.
- 19% of SME owners think it will have a negative effect on their business’ ability to access finance, with 13% believing there will be a positive impact here.
These answers again demonstrate that some owners think their ability to trade with EU nations may suffer, but that they might see a gain in trading with non-EU nations. Additionally, some owners think Brexit will lead to improvements in business regulation, but think it will have negative effects on their ability to recruit unskilled employees, and may also cause some turmoil for finances.
Let’s make it work
Interestingly, despite some of the uncertainty resulting from the referendum and subsequent political fallout, a number of remain voting business owners have reconciled to themselves to leaving the EU. Of those who voted to Remain, 7% say they would now vote to Leave. By contrast, only 3% of leave voters would now vote Remain.
There were some interesting responses from those who’ve adopted the so-called ‘re-Leaver’ position. These tend to chime with the national mood of the last few months, signified in the election results, that Remain voters are now looking ahead to a post-EU landscape and making sure Britain gets a good trade deal.
“The outcome of the referendum must be given a fair chance to succeed” said one respondent. “Both Labour and Conservatives stood on election manifestos promising to honour the outcome of the referendum. The British people have had enough of unnecessary ballots. We should not even be talking about having another one.”
Another ‘re-Leaver’ expressed their distaste for the EU despite voting Remain on a precautionary basis. “The majority have already voted to leave. The UK population would look ridiculous to change its mind. I voted to Remain under the precautionary principle because the Leave campaign gave no idea about life after Brexit. This is now becoming clearer, and the EU has let me down ever since I voted Yes in 1975.”
However, of the 3 per cent of Leave voters who would now vote Remain, there was less confidence in the plans that have been laid out for life outside the EU. “We weren’t told what would happen if we voted to Leave. Now it’s obvious, I think we would work to change it from the inside” said one.