UK businesses of all sizes in favour of remaining in EU, but most are unprepared for a possible Brexit.
New research from leading business and financial adviser Grant Thornton UK LLP suggests that UK businesses – large, small and mid-sized – are largely in favour of remaining in the EU, but few have considered the practical implications of a 'Brexit' and are unprepared for a potential vote to leave.
Following agreement on the package of reforms negotiated by the Prime Minister, a nationwide survey of over 200 senior executives suggests that 65% would vote to remain in the EU. Amongst London businesses this rises to 80% in favour of remaining. Outside of the capital, 59% of businesses would vote to remain in the EU. The survey finds a majority in favour of remaining in the EU amongst small businesses (60% in favour of remain), mid-sized businesses (61%) and large businesses (76%).
When asked about the effect of a possible Brexit, nearly half (48%) of respondents believed it would have a negative impact on growth and jobs in their business, 38% thought there would be no change; 10% believed a Brexit would have a positive impact; and 7% did not know.
Those businesses who only trade in the UK were in favour of remaining inside the EU (62% in favour of remain) as well as those who export to other EU markets (63%). This rose to 72% in favour of remain amongst those businesses who trade internationally outside the EU; amongst this group of exporters, 67% thought leaving the EU would damage their growth prospects.
Respondents also felt a vote to leave the UK would make it more difficult to export goods and services or operate in the EU (47%) and access the skills they need (32%).
Robert Hannah, chief operating officer at Grant Thornton UK LLP, commented: "With the package of reforms now agreed, the date of the referendum firmly set and both sides of the debate campaigning in earnest, organisations need to start considering the scenarios that could play out once the dust settles and the votes are tallied. Whilst it is clear how business leaders in small, mid-sized and large businesses would vote personally in a referendum, some said they don't know what impact Brexit would have on their business and the majority have not done any planning for a possible Brexit."
The survey found that organisations are largely unprepared for a possible vote to leave the EU. Over 65% of respondents said they have done no planning at all.
Robert Hannah continued: "As things stand, if the referendum results in Brexit then British businesses will be ill-prepared for the consequences In our role as a critical friend to business, we are advising all companies based in the UK to ensure that they take appropriate steps to examine in detail the possible impact of Brexit. Whichever way individual company directors may vote, in their corporate capacity they should ensure that the company they run is adequately prepared for all eventualities.
"Last year many companies carried out detailed assessments of how they might be affected by the exit of Greece or other countries from the eurozone. We recommend all companies should carry out a similar impact assessment for Brexit that considers different scenarios and works through how each might affect the operations of the company. Whilst there is a lot of uncertainty about what the UK’s relationship with the EU would be if the referendum results in a ‘Leave’ decision, identifying the 'known unknowns' that might affect your business is an important step in being prepared."
Survey respondents predominantly represented CFOs / financial directors, MD's / CEOs and other senior decision makers at private and not-for-profit organisations throughout the UK. The survey was carried out between 22 and 29 February 2016.