Why do some small businesses want a new treaty with the EU?

With a possible ‘Brexit’ on the not-so-distant horizon, a new poll of 601 small business owners, commissioned by Conservative party donor Howard Shore, found that over 40% of SMEs believed that the EU was a hindrance to their business.

The survey results in numbers

75% of respondents believe Britain should begin trying to take back powers from Brussels, enabling negotiation of their own trade deals, whilst 70% said a new treaty was required in order to initiate “meaningful change” between the UK and EU. Only one-fifth perceived EU regulations to be of benefit to their business.

Pros vs cons of renegotiation

If Britain were to renegotiate terms with the EU, it could enable the Treasury to forgo high membership levies, potentially opening up opportunities for deals to be struck with trade blocs elsewhere. Economists have also pointed out that the majority of SMEs do not trade directly with the EU, but are subject to EU charges.

Opponents of renegotiation point out that the unprecedented move would have unknowable ramifications. Britain would undoubtedly lose much of its negotiating power within the EU bloc, which could affect the country on the global political stage.

Business would face uncertain new trade rights with other EU member nations, whilst specific industries (such as farming) would lose the right to receive EU subsidies. Also, highly skilled economic migrants in specialist areas such as medicine would be dissuaded from travelling to the UK, which could negatively impact the long-term economy.

The EU debate is unlikely to be settled shortly, but one thing we do know is that it pays for small businesses to get professional advice in uncertain times. If you want to know more about how renegotiation may affect your business, you can contact one of our expert accountants today.