Should British SMEs be worried about the EU referendum?

The much-anticipated Queen’s speech included an EU Referendum Bill to deliver David Cameron’s promise of a public vote on the UK’s membership by the end of 2017. Does this spell disaster for SMEs?

Should British SMEs be worried about the EU referendum?

The election has come and gone and many businesses have breathed a sigh of relief that there is at least some certainty in the economy again. However, that solace may be short lived as businesses get a fix on the fact that a referendum on Britain’s membership of the European Union is looming. As laid out in the Queen’s speech, an EU Referendum Bill means we’ll be going to the polls to decide Britain’s future on the continent by 2017. 

A lot of people look at opinion polls and try to make predictions but given how badly the pollsters got it wrong in last month’s general election there’s little comfort to be found there. Paddypower’s latest odds for the EU referendum may point to a 73% chance of us remaining in the EU but even that is a cold comfort at this stage.

One thing is for sure: an exit from Europe would change the UK dramatically. And while some would welcome this with open arms, others aren’t so sure and are waiting with bated breath. There is much to be concerned about: how would a Brexit impact on investment in the UK? How would it affect recruitment? How will our exports hold up? It’s no wonder Britain’s relationship with Europe is now at the top of the City of London’s political agenda and banks are already fretting about the uncertainty. Are SMEs also on the tenterhooks?


“The issue will soon be put to bed,” Alastair Campbell, founder, Company Check

SMEs have little to worry about over the long term. There’ll be a period of uncertainty in the run up to any referendum but it’s unlikely that we’ll vote ourselves out of the EU. The fact that the government is now in a position to hold a vote means that soon, one way or the other, this debate will finally be put to bed. 

With businesses big and small lining up to state their preference that our relationship with Europe continues, it’s likely that we will end up with a stronger position within the EU outlined and agreed in principle before any referendum. 

Germany wants us to remain a strong partner and so they won’t let us go easily. We have a vested interest in getting ourselves more control over what happens within the trading block. There’ll be plenty of posturing in the months to come but behind the scenes I’m confident a deal will be worked out that means the ‘yes’ vote wins and we can get back to business.

Right now, we are concentrating on our work and avoiding being dragged into the debate as a whole or having a view ‘as a business’. I have a view but my business doesn’t – instead it respects the different views of my staff and my customers who may have different views and other companies should bear this in mind. We’re also really conscious to avoid the noise of social media and other discussions, which could potentially alienate customers. 


“Be afraid, be very afraid,” Richard Stone, managing director, Stone Junction 

SMEs shouldn’t just be worried about the impact of leaving the EU, they should be terrified. This referendum is the biggest issue British business faces and the potential prospects are disastrous. Leaving would have an immediate impact on trade as membership increases the amount of businesses that British SMEs do with other EU countries. Leaving the EU would mean negotiating to retain those trading benefits, which is a process that could cost substantially more than it saves. 

The second issue is the impact that leaving the EU will have on our ability to employ non-EU workers. Employing multilingual staff is a key way to differentiate an SME from a larger business with a more conservative recruitment policy. At present, free movement of labour means that British companies can source skilled staff very easily from across Europe. Quite simply, immigration is a boon for the UK.

The last issue is the impact that leaving the EU will have on England, Wales and Northern Ireland’s relationship with Scotland. The SNP would be in a very strong position to request a further referendum for Scottish independence if the UK was no longer an EU member because remaining in the EU is one of party’s key objectives. And it’s clear that the business environment in the UK would be a whole lot weaker without Scotland.

In the run-up to the referendum, we may also start to feel the effects of an exit as other countries become more nervous about trading with us. 

Ryan McChrystal
Ryan McChrystal

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