At a glance
- Our latest SME Risk Index considers the opinions and concerns of small businesses in the lead up to the referendum
- British businesses are still torn, with almost half (49%) of those surveyed saying they would vote to remain in the EU
- 73% of SME decision makers think skills shortages are a problem for British business
As the European Union (EU) referendum draws closer, much of the debate is focussed on how a Brexit would affect businesses and the wider economy.
Small and medium enterprises (SMEs) are often championed as the engine for jobs and growth in the UK, and their success is critical to the country’s economy.
To discover what SME owners think about the upcoming vote, Zurich surveyed 1,000 SME decision-makers to find out more about their concerns, and how they are expecting to vote on 23 June.
In or out?
In line with leading opinion polls, SMEs seem equally divided on the issue.
Two-out-of-five (39%) of the decision makers surveyed would vote to leave the EU, while half (49%) would choose to stay. The remainder said they were either unsure (11%) or were not planning to vote (1%).
There are significant regional differences. Our survey showed that pro-EU sentiment was strongest among SME decision makers in London and Scotland, with more than three-fifths (61%) of small businesses in these regions backing a ‘remain’ vote on 23 June.
With the exception of the North West – where 58% would vote to remain in the EU – the rest of the UK seems much less supportive of Britain remaining in the EU. Only 32% of SME owners in the east of England, for example, wish to retain our ties with Europe, with the remaining regions ranging between 40% and 47% in support of the ‘remain’ campaign.
However, overall, SME owners appear to be predominantly pro-Europe, with only two of the 11 regions surveyed having a higher proportion of ‘leave’ voters than ‘remain’.
Will the economy be better off?
Our survey also asked SME decision makers to give their views on the potential effects of Brexit.
The impact on economic growth is a factor for both campaigns, and SMEs appear to be more convinced that leaving the EU would have a negative impact on the UK economy. Forty-two per cent believe this would cause economic growth to slow, while only a fifth (19%) believe it would aid growth.
Again, there are variations between sectors, most notably between the manufacturing and service industries. For example, double the number of SMEs in the legal sector (56%) believe an EU exit would negatively impact growth compared to SMEs in the manufacturing sector (28%).
Impact for SMEs
While SME owners seem to favour the view that Britain’s exit would be bad for the economy as a whole, fewer are concerned about its effect on their own business.
These companies are the heartbeat of the British economy and it is essential they have the tools to enable and support growth.”
Anne Griffiths, Head of SME Propositions at Zurich
In fact, while 42% believe an exit would harm the economy, only a third (29%) say it would be harmful to their business, and more than half (53%) believe it would have no impact at all.
Recruiting talented workers is a current concern for British SMEs, with almost three-quarters (73%) saying that skills shortages are already a problem for them, and almost all (92%) in agreement that the UK needs to work harder to develop its own skilled workforce.
In the event of a ‘leave’ vote, more than a third (35%) believe the situation will worsen, and the UK will not have enough skilled workers in five years’ time.
What is clear from the latest Zurich SME Risk Index, is that opinion is still very much divided on the key issues surrounding Brexit.
“Whether most concerned about economic growth or a skills shortage, the noise surrounding the EU referendum is clearly creating a lot of uncertainty about the risks to small and medium businesses,” says Anne Griffiths, Head of SME Propositions at Zurich.
“In the event of leaving or staying in the EU, these companies are the heartbeat of the British economy and it is essential they have the tools to enable and support growth.”
For more information on how we can help you and your SME customers please speak with your local Zurich contact.