The Brexit Debate

February 15, 2016 by Andy Crow

The Brexit Debate

There has been much discussion in the press recently regarding the effect on Britain if we leave the EU or Brexit as it is being called. The referendum will be by the end of 2017 so there will be much time for debate.

As with any argument there are two sides with supporters on both sides happy to air their views and in some cases scare-mongering about the consequences.

Here are some of the opinions being stated.

For leaving

• Certain EU trade regulations are seen as burdening many SMEs with red tape. Leaving the EU would free the UK Government to liberalise these regulations, which often impact SMEs disproportionately.
• Not having to contribute to the EU budget will theoretically mean an immediate cost reduction of around €180 per person in the UK, raising the prospect of tax reductions that could benefit businesses
• The concept of free movement of workers and open access to markets are widely acknowledged as beneficial, but the critics argue added bureaucracy and overregulation in the EU hold back small business
• Some argue that membership of the European Economic Area but not the EU (as Iceland are), brings all the key benefits of Europe, such as access to the internal market, without having to deal with red tape

For staying

• For British businesses export to the EU, the potential erosion of the UK’s position within Europe may deal a blow to their plans to expand on the continent, as cost and complexity of trade could gradually rise if tariff changes are made against UK goods and services
• Lack of import taxes within the EU mean British businesses compete on a level playing field across the continent. Leaving the EU would create significant uncertainty , which may be enough to cause foreign businesses to cut back on investment here
• The UK benefits from a number of free trade agreements with non-EU countries. In case of leaving the EU, these might no longer apply to the UK. These would need to be renegotiated and may be on less favourable terms.

The reality is that SMEs will only support Brexit if it favours them financially and we can expect opinions from business interests to differ depending on the size of the business and the sectors in which they operate.

If you would like information on any business issues please contact Chorus Business Advisers on 0845 867 1263 or email info@chorusadvisers.co.uk