We’re ten days away from the most momentous vote in a generation, the EU Referendum. To fully comprehend what’s at stake for UK SMEs, GrowthBusiness is bringing together business leaders from the campaigns for and against a Brexit on the 22nd of June. Ahead of then, here are the top three arguments on both sides of the debate
The EU referendum is just a little over a week away, and the socioeconomic reasons to vote to stay and leave abound. With surveys and opinions from business leaders and politicians making waves in the media, it’s easy to wonder which way you should vote, and why a vote either way would even matter.
With SMEs accounting for nearly half of the UK’s economy, the effect of the referendum on the UK economy hinges on how a vote either way would affect the nation’s greatest source of revenue. A recent Forum of Small Business (FSB) report shows, of all SME owners surveyed, 47 per cent of members divulged their interest in remaining in the EU, compared to 40.9 per cent saying they would vote to leave. 11 per cent are undecided.
These figures summarise the almost equal split this divisive issue has among the business community.
Three reasons to vote REMAIN
- In 2014, SMEs and technology companies in the UK benefited from a €90 million investment from EU grants. Even today, the EU offers a variety of funding options for SMEs, from the seed stage for start-ups, to R&D grants for growing businesses. A vote to leave the EU would cut this source of funding out for SMEs.
- The UK’s national current account deficit is a huge pull for foreign investors, set at 5 per cent of the GDP. This is tied to the UK’s EU membership, and despite the notorious bureaucracy of EU regulations, a vote to leave the union will make it difficult for European banks and foreign investors to finance British SMEs. With only local financiers available for SMEs, there may be less availability of funds and higher interest rates.
- All businesses within the EU are regulated, controlled and standardised in the interest of leveling the economic playing field regardless of whether companies are founded in Belgium or Bulgaria. These checks and balances make sure business activities in the region are fair and just, without which there would be little standing in the way of businesses undercutting your profit, or even cheating British businesses out of their customers.
Three reasons to vote LEAVE
- Considering the steep cost of being an EU member totals £18.4 billion, the UK government could make up for the loss of external funding from the EU through higher valued government grants.
- Although the FSB reports that more small business owners are leaning to vote to remain, most of these businesses are in favour of reforms that shift power from the EU to the UK, including the Working Time Directive. A vote to leave would give the UK complete autonomy to adopt any business-related practice it deems fit for the domestic landscape.
- It’s also important to remember that the UK buys more from the EU than it sells, which shifts the power for wider economic gains to the UK. As it stands, the EU currently has no trade deal with China, Japan, India, Australia or the USA. However, the UK has enough buying power carve out new international trade relationships with countries all over the world, with or without the EU.
Regardless of predictions and projection, both sides of the campaign clearly suggest that there will be a period of uncertainty and a potential temporary dip in GDP if the UK chooses to leave the EU, but either way, this impact would even out over the course of the financial year.
Still not convinced? No problem! Join us next Wednesday, 22nd June at The Savoy to hear the business case for and against a Brexit. Attendance is free for business owners and managers, so register now.
The EU Referendum debate – Meet the speakers
