Future PM must focus on EU to fix Brexit damage, says business group

The next UK government should focus on a better trading relationship with the EU after Brexit costs made exports more difficult, one of the country’s most influential business groups has said.

The Federation of Small Businesses (FBS) published its election manifesto on Friday, citing “stronger trade relations with the UK’s major trade partners, including the EU” as one of its priorities.

Martin McTague, national chair of the FSB, said Britain’s decision to leave the EU has impacted some small businesses negatively if exporting to the EU.

He told The Independent: “What we are seeing in specific areas is a really big drop-off for exporters…

“Location is very important and a lot of small businesses don’t have the resources to take on the distant markets. Vicinity is important. A lot of them have been put off by the additional burden that Brexit has caused.”

The EU headquarters in Brussels
The EU headquarters in Brussels (Copyright 2023 The Associated Press. All rights reserved)

Asked whether improving relations with the EU was important, he said: “I think that’s much more important to the small business community. The larger businesses have got the capacity and resilience and resources, frankly, to weather whatever storms are out there and deal with the problems.

“And they are prepared to up sticks and move to the continent, whereas that is not an option for most small businesses. So having a better trading relationship is important.”

Mr McTague said that although an improved relationship with the EU is “slowly emerging”, his organisation would like any incoming government to “put more emphasis on that”.

Previously released research from the FSB showed that almost one in 10 small firms that used to export or import goods has stopped doing so in the past five years, in part due to costs, the volume of paperwork, and supply chain or logistical issues.

The FSB’s manifesto also calls for a future government to reform business rates and enshrine in law measures to clamp down on big businesses with poor payment practices towards smaller suppliers.

In addition, the group wants to improve small businesses’ access to finance and secure a 33 per cent statutory public procurement target for small and medium-sized enterprises (SMEs).

A survey by the FSB found that 96 per cent of small business owners intend to vote but 20 per cent have yet to decide for which party. 33 per cent have a good idea for whom they will vote, but could still change their mind.

The top concern for small businesses is that any future government will raise taxes, according to the survey.

The FSB’s policy chair, Tina McKenzie, said: “Small business owners and the self-employed are a shrewd and motivated part of the electorate.

“They’re used to weighing up competing offers when running their businesses, and it’s clear from our research that when it comes to the election they’re looking for which of the parties has the most compelling pro-small business offer.

“Small businesses are the key to securing economic recovery, driving innovation, and creating jobs in all parts of the UK.

“Our small business manifesto sets out the measures needed to create the conditions for that to happen, many of which do not involve additional spending.

The Independent previously reported that Brexit is leaving a hole of almost £100bn in annual UK exports, making Britain’s economy worse off than it would have been, had it remained in the European Union.

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