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Head to head - EU referendum

With the critical referendum on the UK’s membership of the European Union just weeks away, First Voice asked the official ‘Leave’ and ‘Remain’ campaigns for their one-page pitch on why small businesses should vote with them. Here’s what they said…

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Better together

Small businesses in particular benefit from the EU’s free trade and common regulation, argues Richard Reed from Britain Stronger In Europe

Richard-Reed

Richard Reed is Deputy Chairman of Britain Stronger In Europe and co-founder of Innocent Drinks 

In 1999, along with two friends, I quit my job to set up a smoothie company. We started off selling the stuff at a music festival in Cambridge. Plenty of people thought we were mad. But now, Innocent Drinks has a turnover of more than £200 million, employs more than 250 people in the UK, and is a success story.

Running a small business is challenging, risky and rewarding. Small business is the backbone of Britain’s economy and must be cherished and protected as such. And small business benefits from our place in the EU, and there is no greater imminent threat to business than the possibility that we could vote to leave.

The greatest business advantage of remaining in Europe is our full place in the EU’s free-trade single market. It slashes costs and opens opportunities for small businesses in two important ways.

Firstly, it has eliminated tariffs on goods traded within Europe. So the 200,000 British businesses that sell to Europe face no such barriers to exporting to the world’s largest market. This market is the destination of 45 per cent of all our exports as a nation. Likewise, any business that sources products from Europe benefits from this free trade. CEBR research has found that quitting the single market and trading under World Trade Organization rules would increase the cost of imports by £11 billion a year nationally.

‘The greatest business advantage of remaining in Europe is our full place in the EU’s free-trade single market’

There is a second advantage to being in the single market – one that could not be replicated outside. It is a framework of regulation, collapsing 28 sets of national rules into one standard. This framework has slashed the red tape that hits small business the most, and made it much easier for small firms to start their export journey by selling into Europe. 

It is no wonder that 88 per cent of all British small firms that export do so to the EU, while just 13 per cent export to the big emerging markets. And the single market is being extended into services, which make up the majority of our economy and are our country’s greatest strength. The benefits of this  extension will be incalculable; the costs of being outside it not worth thinking about.

Those campaigning for Britain to leave Europe claim that only large, established businesses benefit from our place in Europe. They couldn’t be more wrong. HMRC has found that almost three-quarters of goods exports from businesses that are up to one-year-old go to the EU, compared with 47 per cent of goods exports from businesses that are more than 10 years old. 

New UK businesses that import are also most reliant on the EU, with 64 per cent of imports coming from the EU for businesses that are up to three years old, compared with 51 per cent for businesses that are over 10 years old. For new, insecure companies, having the world’s largest market on their doorstep is a massive advantage.

Thousands of small businesses across the UK are strengthened by EU funding, particularly in poorer areas. The European Social Fund pays for training and apprenticeships; the Horizon 2020 programme for research and development; and the EU’s flagship investment plan uses private capital to generate private investment across Europe.

A key question for Leave campaigners is: what would our relationship with Europe be if we quit the EU? The preferred option of Leave campaigners, a Canada-style free-trade agreement, would be disastrous for Britain. Not all tariffs would be eliminated, the agreement would not cover most services, we would not be a full member of vital EU programmes, and it could take years to negotiate. According to research by PwC, moving to such a deal could reduce growth and increase unemployment by more than 500,000.

Europe makes it easier for Britain’s small firms to export, source products, hire, train workers, invest and expand. The alternatives to membership would put our prosperity at risk. If you know your businesses is stronger in Europe, and want to ensure a ‘Remain’ vote on 23 June, sign up to strongerin.co.uk/businesses and support our campaign to keep Britain Stronger in Europe.


Regaining control

The freedom to trade with the EU without being controlled by Brussels offers the best of both worlds, argues Alastair MacMillan from Vote Leave

alistair-macmillan

Alastair MacMillan is a founding member of the Vote Leave business council and owner of hydraulic pump company White House Products, Port Glasgow

We are less than two months away from the biggest political decision this country will face in our lifetime. Do we remain trapped to an EU bloc that stops us taking the decisions we need to take, or do we Vote Leave and take back control of our economy and our future?

We cannot negotiate our own trade deals – we have no free-trade agreements with India, China or the US. While non-EU countries are becoming increasingly important to the UK, we lack the power to strike free-trade deals with our partners outside the EU. 

The UK is a far more open economy than other EU countries. According to Eurostat, in 2014, the share of UK goods exports going to countries outside the EU was higher than every other EU member state bar Malta. Being in the EU means that Brussels has full control of our trade policy. We don’t even have an independent voice on the World Trade Organization – Brussels negotiates everything on our behalf and is unable, or unwilling, to effectively represent British interests.  

Meanwhile, European countries outside the EU have forged ahead. Both Iceland and Switzerland have signed free-trade deals with China, giving their businesses better access to 1.4 billion customers. If a country with the population the size of Coventry’s can do this, imagine what we could do. As the fifth largest economy in the world, we would be able to strike a deal superior to those of both Iceland and Switzerland. 

While non-EU countries are becoming increasingly important to the UK, we lack the power to strike free-trade deals with our partners outside the EU

Furthermore, we have a significant trade deficit with the EU. In 2014, we sold £228.9 billion-worth of goods and services to the EU, but bought £290.6 billion-worth from it. It would want a friendly trade negotiation to preserve trading arrangements, and this would benefit small and medium-sized businesses across the country. Leaving the EU would allow us to regain control of our trade policy, opening up opportunities for businesses in emerging markets across the globe.

Moreover, when we leave the EU, we will be able to tackle the ridiculous regulation that inhibits business expansion, such as the many directives that come from Brussels. 

If we Vote Leave, we will get back the £350 million we send to Brussels every week. This will allow us to spend our money on our priorities. This extra funding could revitalise our public services such as health, schools, education, transport and more. 

We are historically a trading nation, with a seat on the UN council, a widely spoken language and a world-renowned legal system. These are qualities that the UK has in or outside the EU. With control over our own affairs, we can have sensible regulation and an opportunity to spend our money on our priorities. That’s why I will Vote Leave on 23 June. You can pledge your support at voteleavetakecontrol.org