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Brexit: Government must help small businesses survive amid Brexit uncertainty, FSB warns

Written by Latifa Yedroudj on Monday, 07 October 2019. Posted in Politics, Global, Analysis

As Brexit negotiations are still ongoing, authorities are urging the government to deliver Export Vouchers to small businesses in order to help them stay afloat

Brexit: Government must help small businesses survive amid Brexit uncertainty, FSB warns

With less than a month until Brexit, small businesses are still left uncertain over how Britain’s EU departure will affect their exports. With the rising probability of a no-deal Brexit on the table, how will small businesses meet the demands of a global economy? Now, the Federation of Small Businesses (FSB) is urging on the government to deliver Export Vouchers to help them prosper during a time of mass political uncertainty.

The FSB is calling on the Department for International Trade and the Treasury to give vouchers to small businesses across Britain enabling government “price-match” any overseas investments they make.

The vouchers, going up to the value of £3000, will help firms on a range of costs including investments in translation services, additional market research, and finding new clients through overseas trade fairs.

According to research by the FSB, over half (53%) of small business exporters to the EU believe a no-deal Brexit will negatively impact their business growth.

Meanwhile, 40% of small business exporters say the uncertainty of Brexit is casting a shadow of doubt over their exporting ambitions.

Small firms who export to the EU have spent an average of £2,880 in no-deal Brexit preparations and up to £3,000 for businesses who export and import across the bloc.

Further research shows that the potentially positive impact of the depreciation in Sterling on exporters has been offset by the volatility in Sterling, along with the rising uncertainty Britain will leave the EU without a deal.

Around 21% of small firms currently export, according to the FSB, but with additional government assistance authorities believe those numbers could double.

“Exporting is a critical part of the British economy, especially to small firms hoping to expand and grow their businesses. But in order to succeed, it’s time that the Government stepped in and gave small firms the help that they need in order to realise their exporting ambitions,” FSB National Chairman Mike Cherry said. “The introduction of export vouchers up to the value of £3,000 will alleviate some of the strains that exporting firms are facing at the current time.”

“Small businesses are being made to wait for the updated publication of the Government’s revised UK tariff schedule that would apply in the event of a no deal Brexit scenario, which must be published as a matter of urgency. This will allow smaller businesses to understand the terms on which they may be trading with the EU and indeed the rest of the world from the 31 October, in the event of a no deal scenario,” he added.

Uncertainty over Brexit is “harming” small firms’ when it comes to planning exports and managing the future of their business, Mr Cherry said, saying it is vital that the government delivers added incentives to allow small firms to grow and prosper.

“The use of these incentives will help on a number of fronts ranging from investment costs for items like translation services as well as additional market research and fact-finding visits. These financial incentives are a great way to support our small firms that want to begin their exporting journey as well as those looking for ways to increase their exporting potential,” Mr Cherry added.

Mr Cherry stressed how small businesses provide the “backbone” to Britain’s economy and should be the government’s focus during Britain’s transition out of the EU.

“Close to half (46%) of smaller businesses that think they will be negatively impacted by a no deal scenario would welcome some form of financial assistance in the form of either Brexit Vouchers or tax credits/breaks. Small firms are the backbone of the economy, which is why the Government must help equip businesses to succeed and flourish,” he said.

The EU will decide next week whether a Brexit deal is possible. Prime Minister Boris Johnson believes a deal can be achieved and it will only be a matter of time before SMEs are provided with a little bit more certainty over the future of their businesses.

About the Author

Latifa Yedroudj

Latifa Yedroudj

Latifa Yedroudj has joined the Elite team to fully immerse herself in the business side of journalism, a strong passion of hers cultivated from young having co-run her mother's start up business since she was 18. Her interests lie in a wide range of subjects, including start ups, business, travel, and anything entrepreneurial she can get her hands on. She has worked for some of the biggest names in journalism including The Guardian and The Mirror. Follow her on @latifayed on Twitter for her latest journo rants.

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