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Trade and skills top of small business wish list as Brexit countdown hits one year

With a year left on the Brexit clock, small businesses are urging the Government to inject much needed momentum into agreeing the future economic partnership with the EU.  

According to FSB research, the EU single market is a priority trading bloc with 63% of small firms wanting to see a trade deal prioritised with the EU post Brexit. However at an individual country level the US is the country that the highest percentage of exporting small businesses would want to see a trade deal done with post Brexit (49%) –with 29% wanting to see a trade deal with Australia and 28% with China. 

Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said: “The landmark agreement on the terms of a transition period should provide the much needed certainty for the UK’s small business community. Attention must now turn swiftly towards hammering out new trade arrangements and pressing ahead with designing our future immigration system, post the implementation period.

“The freedom to ratify new trade agreements during this time will ensure that small businesses benefit from existing trade agreements while enabling them to make progress on trade deals with new partners across the world. It is vital that the right balance is struck between ensuring as frictionless trade as possible with the EU while exploiting new, exciting trading opportunities with growth markets across the world.”

It is important that small businesses are given every chance to seize the opportunities presented by any new trade arrangements. To achieve this, FSB is calling on Government to include a dedicated small business chapter recognising the bespoke support small firms will need to realise their exporting and wider trade ambitions. Coupled with this, the Department for International Trade’s Global Growth Programme must be rolled out to small and micro businesses, as well as mid-sized businesses to allow these firms to access financial support to assist them with for example translation or intermediary costs.  

Mike Cherry said: “It is clear that small firms trade with countries based on ease, cost and value. It is vital that any future trade deal, irrespective of whether with the EU or non-EU markets, must deliver these key priorities. A small business chapter, as part of all new trade arrangements, will help allow small firms to fully realise the benefits of international trade.

“Small businesses up and down the UK are excited about the prospect of opening new avenues of trade across the globe. To maximise these opportunities, small firms must be given the tools to do so. Tailored trade support, like financial incentives to support costs attached to international trade including small business trade missions, whether in their own right or as part of supply chains, will empower many to reach out and connect with new markets.”

It is not just about trade, skilled labour is just as important to the success of UK small businesses and it is essential that the Government delivers an easy, cost effective future immigration system, post the implementation period.

One fifth (21%) of small employers currently have EU staff and over half 59% of small businesses are concerned about accessing the skills they need post-Brexit. 

With such a strong need for skills and talent from the EU, it is critical that the design of any future immigration system is easy, cost-effective and does not add additional red tape for small employers. 

FSB is calling for an employer driven immigration system to ensure that businesses can meet their skills and labour needs and allow easy transfer of EU workers between UK employers. This system must not replicate the complexity of the current non EEA, UK points based immigration system which 95% of small businesses have no experience of using.   

The new system must  also work for the self-employed and small business owners looking to come and set up in the UK, as well as those in the UK looking to carry out assignment and contracts in the EU. 

Mike Cherry said: “As the UK wrestles with its productivity challenge and the skills shortage grows, having access to the people that they need is critical for small business success. Without easy and cost effective access to EU workers, firms will be faced with medium term chronic, unresolvable skills gaps, particularly in the mid skilled area. This will impact growth and even the survival of many small businesses.

“It doesn’t matter if you are hiring a packer, mechanic, fruit picker or engineer, small employers need to be able to hire the right people, for the right job, at the right time. 

“The Home Office must work hard to deliver an immigration system that that is affordable and easy to navigate. Small businesses should not be put off hiring the right talent or losing staff because the new processes take too long, add too much paperwork or has become too expensive.”

Brexit: The view from Scotland

Andy Willox, Scottish policy convenor for FSB, said: "The March publication of the transition period terms definitely counts as progress. Many Scottish firms will have breathed a sigh of relief when they saw an agreement that will largely mean they can continue to operate broadly as they do now until the end of 2020.

"But now we need to look beyond these interim measures.  Businesses need details so they can firm up business plans.  Nine in ten small UK exporters have links with the EU single market, so it’ll be vital that future European trade links are both comprehensive and determined quickly.

"What is also clear, however, is that this negotiation is going to require compromises.  That’s hardly a surprise.  The real crunch between now and next March, though, will be the points on which we are ready to move in order to secure a concession from the other side.   And the worry, as is always the way when governments go all strategic and big picture, is that it’ll be the interests of the big players in the same handful of glamour sectors that trump everything else.

"Ministers need to take the pulse of the economy and country as a whole.  If ever there was a time to listen to the most constructive voices, not just the loudest, this is it."