Small businesses speak out on Brexit in absence of strong voice from Northern Ireland Executive

ONE third of exporting small businesses expect to see a decline in their export levels as the UK leaves the EU, according to research published today by the Federation of Small Businesses (FSB). 

FSB, the leading business organisation, highlighted the need to have a strong Northern Ireland voice, to ensure that the interests of local small businesses are actively supported during this crucial period as the UK starts the official process of leaving the EU.

The findings of the six month research programme on the business impact of leaving the EU, conducted by FSB, follow the Prime Minister’s key Brexit speech last week.  This is the first substantive business research published since the speech and underlines the importance of having Northern Ireland’s politicians negotiating to secure the greatest possible access to the EU single market and address issues around the border with the Republic of Ireland.  

One in three (32%) of small businesses are involved in overseas trade as an exporter and/or importer, with the vast majority trading with the EU single market (92% of exporting small firms and 85% of importing small firms). As a result of Brexit, one-third (29%) of exporting small firms, regardless of destination, expect their level of exports to decline, while one in five (20%) expect it to increase. The difference is starker for current importers, where one-third (31%) expect to see a decrease compared to seven per cent that expect to see an increase. 

Wilfred Mitchell OBE, FSB Northern Ireland Policy Chair, said:   “Today’s research highlights that one in three FSB members trade overseas. Small business exports have been on the rise since the referendum, with the lower value of the pound making UK goods and services more competitive. As the UK leaves the single market any new agreement must maintain the current ease of trade with the EU and not lead to additional administrative or financial burdens. In order to boost our competitive stance in the global market, there needs to be an enhancement of specific support for small exporters to reach new customers and to negotiate ambitious trade deals with large and emerging markets; this should be the priority of the Northern Ireland Executive.”

FSB research reveals that one in five (21%) small business employers employ non-UK EU citizens, with the majority of these employees already residing in the UK with the right to work here. In addition, almost half (47%) of small businesses that employ EU citizens predominantly rely on mid-skilled workers, such as mechanics or care workers, whereas a fifth (21%) of businesses mainly rely on lower-skilled labour such as farm workers, integral to the Northern Ireland’s large agri-business base.

“FSB research clearly shows the importance small businesses place on being able to access the skills and labour they require. Mid-level skills are vital for small firms, and businesses are calling for the right to remain for those EU citizens in the workforce here. The design of any future immigration system must ensure demand can be met, twinned with a supply-side focus on improving UK education and skills. Equally, continuing to attract the very best high-skilled international talent is essential for small businesses operating in sectors such as digital and tech”, Mr Mitchell continued. 

“This is one of the reasons that we welcome the Prime Minister’s commitment to prioritise the maintenance of a Common Travel Area (CTA) with the Republic of Ireland in the forthcoming negotiations and her recognition of the special relationship that exists between the Republic and the UK. Her confirmation that the government will make the delivery of a practical solution a priority will help to assuage the immediate concerns of business owners who are affected; but it is essential that we see detail on the mechanism as soon as possible.”

Mr Mitchell concluded: “The UK will shortly start the official process of leaving the EU. Evidence from our members today shows the need for our local politicians to ensure effective representation of Northern Ireland to safeguard and promote an easy trading landscape, and to make sure small businesses have access to the right talent at the right time. We also see opportunities to revamp future funding for business support and access to finance, and for a lighter-touch regulatory system that promotes growth and productivity.”

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