This is because whatever early rhetorical positions are adopted by negotiators on either side, the fundamental truth is that a deal will be done that delivers this, because it is in everyone’s interest.
But as this process gradually unfolds, and indeed both sides are coming to the conclusion that a rush job is in no-one’s interests, we should not forget the parallel process that will take place – and that is what the government will do to ensure the UK remains a good place to do business. This is something the business community should speak out on, because whilst Brexit negotiation remains vital to business interests, there is plenty that can and must be done to improve the landscape here.
We have already seen the beginnings of a policy response with the governor of the Bank of England announcing measures to boost lending by £150bn, with likely announcements on interest cuts and quantitative easing to follow. The chancellor has chimed in with an announcement that corporation tax will be cut from 20 per cent down to 15 per cent by 2020. The SME community now needs to come forward with a sensible manifesto of what else can be done to burnish our credentials. From our experience working with businesses, here are a few suggestions.
Business rates have long been the bane of SME existence in the UK and the Budget announcement of doubling the relief for small businesses so that 400,000 properties are exempt till 2017 is to be welcomed. But now is the time to lock this in for the long term.
Venture capital trusts and the Enterprise Investment Scheme have been hugely valuable in helping to raise capital for our startups and the last parliament could fairly be characterised as the time when the UK became Europe’s capital for entrepreneurship. Yet these were also schemes that were restricted by EU State Aid rules.
Now whatever deal is worked out on State Aid, we must ensure we continue to use these schemes and others, as an opportunity to cement our reputation for enterprise, so that even outside of the EU, the UK is still the best place to start a new business, and raise capital to help it grow. Other nations such as Italy have introduced similar schemes to ours so this is no time to take our foot of the pedal in attracting investment.
Many small businesses, especially tech startups, may become concerned about recruiting the right people. But this is as much an opportunity as it is a threat. Skills shortages for tech firms are nothing new and now is the time for the government to re-evaluate its system of visas, so that whether from inside the EU or the rest of the world, UK SMEs have access to the talent they need to help them innovate and grow. At the same time, we need to improve our education system so we can provide school and university graduates with the tech skills most valued by entrepreneurs and SMEs.
So what then is the overall outlook for corporate finance and SME growth? Well right now we know there may be opportunities for M&A as overseas investors look for bargains created by the pronounced slide in Sterling, which is also providing a considerable upside for UK exporters. But more importantly, buyers, sellers and advisors need to look beyond the immediate market froth, to the fundamentals of the UK as a place to raise capital and grow a business.
If the SME community can come together to make the argument that now we have voted to leave the EU, the government must double down on measures to make the UK more attractive for business, we can improve our competitive position still further. If we do this, we can replace initial Brexit uncertainty, with the knowledge that Britain is still by far the best place in Europe for SME growth.
Caroline Belcher is exit planning partner at Cavendish Corporate Finance.
Elsewhere, entrepreneur and influencer Barry James makes a visceral and calculated case for Britain now being at it’s most exciting point in history – rather than languishing in post-Brexit doom and being dogged by never before seen political upheaval.
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