Reverse Brexit, say eight in ten small Scottish businesses

The number of Scottish small businesses which would like to reverse Brexit and remain in the EU has soared to almost eight in ten, according to new research.

Citibase chief executive Steve Jude said there is still 'a palpable sense of uncertainty' in the SME community. Picture: Mischa Haller

Figures released by serviced office space provider Citibase show that 78 per cent of small and medium-sized enterprises (SMEs) in Scotland would choose to reset the Brexit process and continue the UK’s EU membership.

This is a significant rise from the 58 per cent recorded in the third quarter.

The release of Citibase’s Business Confidence Index follows the UK government’s decision earlier in the week to postpone a parliamentary debate on Theresa May’s Brexit deal until early January.

However, the figures also revealed that confidence in the government’s ability to secure a good withdrawal deal for SMEs substantially increased in the last three months, with just over half of participants agreeing with the statement, a jump from 18 per cent in the previous quarter.

Despite this, 61 per cent of SMEs north of the Border said that they would like to see a snap general election after the UK departs the EU, with First Minister Nicola Sturgeon emerging as the most popular candidate for prime minister.

The number of Scottish SMEs preparing for Brexit has risen by 8 per cent, with 68 per cent reporting that they have already started – or are about to start – creating strategies to deal with potential post-Brexit issues.

Citibase chief executive Steve Jude said: “Despite the chaos in Westminster it is reassuring to see confidence levels spike amongst the Scottish SME community, however there is still a palpable sense of uncertainty, resulting in many wanting to do a U-turn on Brexit.

“In light of this, it is encouraging to see many SMEs already making post-Brexit business strategies as they look to de-risk.

“SMEs are cautious about the future and don’t want to commit to anything that may stifle their success, such as long-term office contracts that don’t allow them the flexibility they crave to be agile, successful businesses.”

This came as the Office for National Statistics (ONS) confirmed that the UK economy grew by 0.6 per cent during the third quarter, but that business investment is crumbling as firms are spooked by Brexit.

In its latest estimate of gross domestic product, the ONS said economic growth was in line with earlier readings, driven by strong retail sales during the World Cup.

Yet business investment fell by 1.1 per cent for the third quarter in a row, the first time this has happened since the financial crisis.

Howard Archer, chief economic advisor to the EY Item Club, said: “This strongly suggests businesses were cautious over investment as doubts mounted as to whether a Brexit transition arrangement would come into being next March and companies looked for greater clarity over the UK’s likely long-term relationship with the EU.”