The FSB (federation of Small Businesses) has responded to UK Prime Minister Theresa May’s confirmation that Article 50 will be triggered on March 29 – and revealed their research on ‘What Small Firms Want from Brexit.’

‘The Starting Gun for A Pro-Business Brexit’Brexit Deal

Responding to Theresa May’s announcement that Article 50, which will begin the Brexit process, will be triggered on March 29th, Mike Cherry, National Chairman of the FSB said the move “needs to be the starting gun for a pro-business Brexit.”

“Smaller businesses want to make sure that easy access to the EU single market and the right talent feature prominently in the forthcoming negotiations,” he continued. ““A fifth (21%) of small businesses with staff employ non-UK EU citizens with almost half of these (47%) relying predominantly on mid-skilled staff. They include care, construction and production workers who often require specialist skills and training. The right to remain for these non-UK EU citizens must be guaranteed at the earliest opportunity to provide reassurance to smaller firms and their work forces. Settling this issue is crucial to business owners and the economy.”

He also warned that any future immigration system “must ensure that small firms can easily recruit the right person, for the right job, at the right time without adding additional administrative burdens on already time and resource strapped small businesses.”

Keep Trade Easy: what small firms want from Brexit

“One in three FSB members trades overseas, with the vast majority trading with the EU (92% of small business exporters and 85% of importers). The Government must ensure that its proposed comprehensive Free Trade Agreement with the EU retains the same ease of trade currently enjoyed, with no new barriers for small businesses,” says Mike Cherry.

His statement echoed the findings of the FSB’s newly-released report, ‘Keep Trade Easy: what small firms want from Brexit.’

Their research revealed:

  • the top priority market for small firms is still the EU single market (63%), although 49% of FSB members named the US as a priority market
  • 27% of exporting small firms would be genuinely deterred from trading with the EU should any tariff – no matter how low – be introduced for UK-EU trade. “Nearly half (47%) of exporting small businesses say that tariffs play a role in where they export,” says Mike Cherry. “Non-tariff barriers (for example customs administration) are of equal importance.”
  • 58% of smaller firms find the EU single market easier to trade with than non-EU markets (6% find it harder to trade with the EU single market).
  • Nearly half (45%) of current exporters find trading with the EU single market cheaper than trading with non-EU markets. Only 9% find it more expensive.
  • Over half (53%) of current importers find trading with the EU single market cheaper than trading with non-EU markets. Only 8% find it more expensive.
  • 32% of exporting small firms are expecting to export less to the EU
  • 26% expect to export more to non-EU markets.

“Small firms trade with countries based on ease, cost and value and any future trade deal must deliver on these key aspects both with the EU single market and non-EU markets,” says Mike Cherry.

“The top non-EU countries of choice for trade deals include the US and China. However, the reality is that the EU single market is still a crucial market for smaller firms and cannot be undervalued. Compared to larger companies, small businesses typically work to tighter margins with limited resources, meaning changes to the trading landscape will hit them disproportionately hard. We call on the Government to ensure that a sensible phased implementation arrangement is put in place to avoid a cliff edge, once we have left the EU.

“The impact of potential tariffs and non-tariff barriers to trade with the EU is shown to be a real concern for small businesses trading overseas, at the very time that the UK economy can least afford to see a slowdown in exports. FSB calls on the Government to secure the easiest and least costly access to the EU single market in the Brexit negotiations.

This includes a new customs arrangement with the EU that allows for frictionless cross-border trade. And we call for greater support for small businesses to gain full benefits from future trade deals with non-EU markets. A small business chapter to cater to our member’s specific needs in all future trade deals is crucial.”