FAILURE to secure a Brexit deal is having a negative impact on the exporting ambitions of 40% of the country’s smaller companies, according to the Federation of Small Businesses (FSB).
It said a fifth of small firms are currently exporters and are waiting on the UK Government to provide financial assistance.
Now the FSB has called on the Department for International Trade (DIT) and the Treasury to give them a pre-Brexit injection of support by introducing Export Vouchers, worth up to £3000.
These would help offset a range of costs, from investments in translation services, additional market research and finding new clients through overseas trade fairs, which the FSB said would help to grow individual businesses, as well as the economy as a whole.
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The FSB said its research showed the potentially positive impact on exporters of sterling’s depreciation has been offset by the currency’s volatility and the uncertainty created by the failure to secure a Brexit deal.
It said more than half (53%) of small business exporters to the EU believe their continuity and growth will be hit by a No-Deal Brexit on October 31.
Of those exporting firms which have prepared for a No-Deal scenario, the FSB said the average cost of preparations is £2800, rising to £3000 for smaller firms that import and export.
Mike Cherry, the FSB’s national chairman, said exporting – especially among smaller firms looking to expand – was a critical part of the UK economy, but the Government had to step in to give them the help they need.
“The introduction of export vouchers up to the value of £3000 will alleviate some of the strains that exporting firms are facing at the current time,” said Cherry.
“Small businesses are being made to wait for the updated publication of the Government’s revised UK tariff schedule that would apply in the event of a No-Deal Brexit scenario, which must be published as a matter of urgency.
“This will allow smaller businesses to understand the terms on which they may be trading with the EU and indeed the rest of the world from October 31, in the event of a No-Deal scenario.
“The continued uncertainty is harming small firms’ ability to plan and prepare for the future with 40% of small business exporters saying that the uncertainty has had a negative impact on their future exporting ambitions.”
Cherry said that 21% of small firms were currently involved in exporting, but with extra assistance from the Government.
“Around 21% of small firms currently export, but the FSB believed that could double with additional assistance from the Government.
He added: “The use of these incentives will help on a number of fronts ranging from investment costs for items like translation services … These financial incentives are a great way to support our small firms that want to begin their exporting journey as well as those looking for ways to increase their exporting potential.
“Close to half (46%) of smaller businesses that think they will be negatively impacted by a No-Deal scenario would welcome some form of financial assistance in the form of either Brexit Vouchers or tax credits/breaks.
“Small firms are the backbone of the economy, which is why the Government must help equip businesses to succeed and flourish.”
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