Think a Brexit Will Benefit Small Businesses? Think Again

07/06/2016 12:08 | Updated 07 June 2016

Small businesses are the lifeblood of Britain's economy. After all, they bring in a collective £1.8 trillion each year and employ almost two-thirds of the country. At the end of the day, it's undeniably Britain's ambitious, would-be entrepreneurs that keep us moving forward.

And to be honest, that's what makes the ever-increasing likelihood of an impending Brexit all the more terrifying.

First and foremost, let's just go ahead and put the issue to bed right now: there has never been an economic case for leaving the European Union. Never, ever, ever.

The International Monetary Fund, Bank of England, US Federal Reserve and Institute for Fiscal Studies all think it's a dumb idea - hell, nine out of ten economists are advising against it. And bearing in mind that most of us can't even begin to comprehend the finer points of how the global economy actually works, that should be enough to convince even the most sceptical of voters.

But just for argument's sake, let's take a look at what an EU exit would actually mean for our small businesses.

When in doubt, investors like stability - and this farce of a referendum has completely tossed stability out the window. Until this vote has been settled, Britain's economic progress has come to a complete and utter standstill. Company formations have plateaued, business owners are frantically scrambling to liquidate unsuccessful ventures and the pound has plummeted in value. Nobody wants to spend money setting up shop until Britain until we're able to see the tangible results of a Brexit.

And you can hardly blame them. Think British exports are currently being hampered by red tape in Europe? Just you wait until we cut ties with Brussels.

British businesses will instantly become less competitive because they'll be faced a whole host of new, non-tariff barriers. Costly rules of origin, divergence in regulations and various distribution restraints will make it more complicated for small companies to export their goods and services across the single market. British companies will likely face those same barriers when attempting to export to the EU's top trade partners - meaning they'll end up paying far higher costs for their inputs.

Now, plenty of Brexit supporters are willing to scoff at these new trade barriers by arguing that they will pale in comparison to the EU laws that are currently hindering our success. And let's give credit where credit is due: the EU has a few silly trade policies that seem a bit trivial on this side of the English Channel. But any and all gains from shedding European market regulations will be negligent at best.

The UK already enjoys some of the most flexible employment and market regulations on the planet. Where small businesses are concerned, around half of all EU regulation costs come from crucial climate change legislation and working time directives that stipulate we should all be entitled to at least 20 days of paid leave each year. Why on earth would an 'independent' Westminster scrap that?

It's time to face facts: leaving the European Union will not benefit British businesses at all. If anything, a Brexit will only discourage smaller companies from trying to do business abroad. That will subsequently transform this country's thriving small business economy into an insular, nationalistic beast that simply cannot compete on the global stage.

Now, if that's a price you're willing to pay in order to try and slash net migration, just you go ahead and vote to leave the EU on June 23. But if you're gainfully employed by a small business, you might want to think twice.