Theresa May has managed to convince the EU to extend the Brexit deadline until October 31. So what do British small businesses think about it?
The Brexit saga continues. After Theresa May failed to get her deal through parliament despite giving MPs three opportunities to vote on it, she returned to Brussels to seek an extension for the process of leaving the EU. The member states debated it for six hours and concluded that the leave date be pushed to Thursday October 31.
Speaking at a subsequent press conference, May said: “I continue to believe we need to leave the EU with a deal as soon as possible. And vitally, the EU [has] agreed that the extension can be terminated when a withdrawal agreement has been ratified, which was my key request of my fellow leaders. For example, this means that if we are able to pass a deal within the first three weeks of May we will not have to take part in European elections and would officially leave the EU on Saturday the first of June.”
This news comes after two years of negotiations where UK politicians has found themselves in many awkward situations – like David Davis having to own up to the fact he’d lied about there being analysis reports about the impact of Brexit on different sectors. May initially presented her failed draft withdrawal agreement in November 2018, which was subsequently rejected by parliament three times in the first three months of 2019.
With all the twists and turns of the process and the uncertainty it’s caused, Andy Soloman, founder and CEO of Yomdel, the tech firm improving customer experiences, thinks the new leave date is rather fitting. “A Halloween Brexit is probably quite appropriate as any deal that does materialise will be a Frankenstein’s monster, pieced together from various deals along the way,” he quipped.
He’s not the only leader in the SME ecosystem to be tired of the procedures. “It’s chaotic at the moment,” argued Mark Brownridge, director general of the Enterprise Investment Scheme Association, the trade body for SMEs. “With the political backdrop we are currently experiencing, how can any business plan for the future? What SMEs need to thrive is certainty. Uncertainty breeds fear and a reticence to expand and that’s what we will see more of with the latest delay. We will now almost certainly see a slow-down in the economy that could have been easily avoided.”
He continued: “If the markets and the economy know what the issues are, they can react and solutions are put in place to counter them but with the current Brexit calamity all bets are off. We are entering uncharted waters and anyone who tells you they know how this will play is lying.”
As the negotiations drag on, Jenny Tooth, CEO of the UK Business Angels Association, the investment trade organisation, feared it could impact the funding to SMEs in more rural areas. “Funding for SMEs in the regions has been somewhat forgotten about recently,” she explained. “This will subsequently impact regional SMEs more than larger businesses that can take the hit or areas such as London or the Golden Triangle which receive the majority of domestic investment.” Moreover, she argued that losing out on investment resources like the European Regional Development Fund, Horizon 2020 and the Jeremie fund “could create a huge investment gap in UK.”
Nigel Driffield, professor of international business at Warwick Business School, the academic department of the Faculty of Social Sciences of Warwick University, was happy that the cliff edge had been avoided at the moment. “However, nothing has changed in terms of offering business any certainty,” he said. “The fundamentals of the economy are strong but too many projects are on hold and that will not change until we know how and when we are leaving the EU and what impact that will have on international trade. There is still a risk that businesses will look to invest elsewhere, rather than the UK.”
Striking a slightly more optimistic chord, Luke Davis, CEO and founder of IW Capital, the private investors, believed small-business leaders will continue to thrive despite the uncertainties. “Over the last year or so, we have seen a concerted effort to get on with business, regardless of Brexit and the eventual outcome,” Davis explained. Noting the deal flow going through the company has increased, he felt rather bullish about the future. “What Brexit ends up looking like will not affect the fantastic range of innovative, growing SMEs we work with that are likely to drive our private sector forward,” he said.
Given the last few months of political instability, SME leaders better prepare themselves for the rollercoaster of Brexit to continue for some time.