Study: Britain’s Small and Medium Businesses Want Hard Brexit

Brexit
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Britain’s small and medium-sized businesses overwhelmingly want a clean break with the European Union (EU), outside the bloc’s Single Market and Customs Union.

Leaving these institutions would free firms of the bloc’s restrictive rules and labour regulations, which critics say hit smaller businesses harder, whilst opening up trade to growing markets outside Europe.

In contrast, larger corporations and more international businesses largely want to remain tied to the bloc and its rules, which have served them for the past 40 years.

The findings come from a YouGov survey, carried out for the accountancy firm RSM in November and December, and reported by the Financial Times.

Simon Hart, the Brexit Lead Partner for RSM, told the paper that smaller companies were more adaptable and confident in their ability to embrace change.

“The midmarket can be more reactive and move later in the game. Multinationals need to make decisions about where they are locating their head office now.

“It may take nine to 12 months to get product licenses and regulatory approvals through.”

The opinions of 315 companies with an annual turnover of between £30 and £300 million in November and December were polled. The majority preferred a hard Brexit when presented with a range of potential post-Brexit deals.

Twenty-two per cent of midsize businesses said they would prefer a Norway style deal, whereby the UK pays a regular fee to access the Single Market and accepts Brussels regulations.

Around 17 per cent favoured a Switzerland-style deal, where the UK would be forced to accept open borders and signs deals with the bloc to allow for some market access. This model does not, however, allow the sale of financial services around the EU.

Meanwhile, 22 per cent backed a Canada-style a deal, which trades largely tariff-free with the bloc but accepts customs controls and no free trade when it comes to services.

Michel Barnier, the European Commission’s chief Brexit negotiator, has indicated the UK’s red lines on Brexit mean this is the most likely outcome of Brexit talks.

However, 19 per cent said they would prefer to fall back on WTO rules, which is also known as a “no deal”option and is backed by many pro-Brexit campaigners.

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