SMEs remain evenly split on EU referendum

Big business might be largely in favour of remaining as part of the European Union, but with less than three weeks to go until the referendum, small and medium enterprises appear to be evenly divided on the issue.

A survey of just over 500 companies employing fewer than 250 people, carried out by research consultancy firm TNS, found that 37% of SMEs were in favour of exiting the EU. Those wishing to remain had a slight majority at 38%. That left a quarter of SMEs undecided on the issue.

Of those who were undecided, many said they did not feel well-informed about how leaving the EU could affect their businesses. Half of all respondents, including those who expressed a preference one way or the other, were unable to give a clear business reason for both sides of the argument.

Some on the Remain side listed personal reasons such as cheaper holidays but business reasons such as economic stability and free trade were also cited. The main result of the TNS survey mirrors another poll of small businesses with fewer than 50 employees, carried out on behalf of Bank of Cyprus UK. In that poll the ‘Remain’ and ‘Brexit’ camps were perfectly balanced at 37% each.

The majority (60%) said they did not believe that a potential Brexit would have a discernible effect on their recruitment policies. A quarter did, however, report that they have been delaying business decisions due to uncertainty in the lead up to the referendum. An additional 14% thought that the costs of recruitment could rise if the UK voted to leave.

Fewer than one in five small businesses polled see an exit as having the potential to reduce red tape when it comes to recruitment, and just 10% believe it would increase their ability to hire a greater number of staff. Only 9% think it would enable them to hire more skilled staff.

Business owners should implement contingency planning so they are ready to move forward, regardless of the outcome of the vote. That should provide some level of long term security and could also provide an escape route should a company find itself facing a difficult financial situation.

By Phil Smith

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