Brexit threatens Britain’s EU-dependant SMEs

Nearly three quarters of UK SMEs struggle to export beyond the European Union, new research has found.

This could mean they may be disproportionately disadvantaged if the UK votes to leave the EU in an upcoming referendum.

According to the study by insurance group RSA, 82 per cent of SMEs see European markets as important to their future growth with more than half (52 per cent) deeming those markets very important.

A quarter of SMEs described themselves as a European business, but 56 per cent complain that uncertainty around Britain’s EU exit (Brexit) is already holding back their growth and 55 per cent say the Government is not supportive in dealing with Brexit. A total of 66 per cent called for greater clarity on the UK’s future role in Europe.

The survey found that 74 per cent of SMEs believe the perception that small businesses are local by default is outdated and damaging, with the same proportion saying that international growth is important to their business. However, despite this, 72 per cent struggle to export beyond EU borders.

David Swigciski, RSA SME director, said: “The UK’s SMEs are stuck in the gravitational pull of the EU. Current Government export support isn’t working for our smaller businesses, who are struggling to trade beyond Europe. We need a 21st century framework for the 21st century SME.”

The RSA survey coincided with another that showed companies are less confident about their prospects than at any time in the past three years, amid fears about the global economy and uncertainty about Britain’s place in Europe.

The findings warn that the UK is now suffering from problems in the global economy, particularly China’s slowdown and signs of weakness in America. The turmoil in the Middle East is also hitting confidence.

The second survey also found that an impending EU referendum, expected as early as June, is fuelling uncertainty for UK businesses looking at their long-term prospects.

Meanwhile, a major donor to the campaign to leave the EU has been embarrassed by an admission that a vote to leave could harm his business.

CMC Markets, set up by Eurosceptic Peter Cruddas, who has donated £1m to Vote Leave, said in its IPO prospectus that Brexit would hit profits and lead to regulatory challenges.

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