20 October 2021

City AM: Temporary Brexit? Half of young British business owners expect UK will apply to rejoin EU

A third of SME business owners are convinced that the UK will apply to rejoin the EU in the future, according to new research shared exclusively with City A.M. this afternoon.

Nearly half (47 per cent) of 18-34-year-olds SME owners believe the UK would re-apply to re-join the European Union – these younger entrepreneurs are twice more likely to hold this opinion than business owners aged 55 and over (23 per cent), according to the data from cloud accounting provider FreeAgent.

The younger age group were also significantly more likely to say that they hoped it would take place with nearly 2 in 5 respondents in favour of rejoining (38 per cent); versus 23 per cent of 35-54-year-olds; and 22 per cent of business owners aged 55+.

A third thinks Brexit is here to stay

Although some remain hopeful for re-entrance, the survey also revealed that 35 per cent of respondents said they believe the UK will never reapply and will stay completely separate from the EU going forward.

However, 16 per cent said they think the UK will apply to join the Single Market and or Customs Union in the future.

“Although it’s been nearly two years since the UK left the European Union, and 8 months after the transition period ended, Brexit remains a hugely divisive issue for the SME sector,” Roan Lavery, CEO and co-founder of FreeAgent said.

He told City A.M. this afternoon: “With a third of small business owners predicting that the UK will eventually reapply to join the European Union, and a further 1 in 6 believing it will apply to join the Single Market or Customs Union, it seems that many are pessimistic about how Brexit is progressing and expect to see a dramatic U-turn at some point in the future.”

The findings also demonstrated a gender divide, with male business owners most likely to be of the opinion that the UK will not apply to rejoin the EU, 58 per cent compared to 44 per cent of their female counterparts.

State of play

Despite the challenges of the last 18 months including the impact of Covid-19 and Brexit, the majority (55 per cent) of SME business owners aren’t worried about the future of their business, the primary reason being 67 per cent of business owners deemed their businesses currently “stable”.

This figure rises to 76 per cent for the oldest group of respondents (aged 55 and over) and to 72 per cent for sole traders.  

A fifth (22 per cent) of SMEs are going through a period of growth – this figure doubles for 18-24 year olds (44 per cent), while a further fifth (19 per cent) said that the Covid-19 pandemic has opened up opportunities for their business. 

However, almost half (46 per cent) of those questioned expressed concerns about the future of their business.

Unsurprisingly, the Covid-19 pandemic emerged as the main cause for this concern for SMEs and of those, 62 per cent said that their business had suffered as a result of the Covid-19 pandemic.

57 per cent also said that they are worried about the long-term negative impact(s) of the pandemic. 

“What is heartening to see is that, despite the combined impact of Covid-19 and Brexit on the SME sector, a clear majority of people not only say that their business is currently ‘stable’ but also they are not worried about the future,” Lavery said.

“This shows just how resilient small businesses have been in the most challenging of times, which is a testament to their adaptability and tenacity.”

“However, it is important that we are not complacent about these survey findings,” Lavery stressed.

“The SME sector comprises at least 95 per cent of all businesses in the UK and is vitally important for the wider economy, but many businesses are still in desperate need of support. As we enter into a post-Covid and Brexit world filled with new challenges, the government should make it a top priority to help these businesses thrive,” he concluded.

CITY AM

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