Small firms '˜resilient' amid faltering trust on Brexit deal

Scottish SMEs' trust in Westminster to secure a good deal for UK businesses in their Brexit negotiations has faltered in the wake of June's general election, a survey has found.

Citibase said its survey results were a 'wake-up call' for government. Picture: John Devlin
Citibase said its survey results were a 'wake-up call' for government. Picture: John Devlin

However, small and medium-sized enterprises north of the Border appear more resilient than their peers elsewhere in the UK, according to the latest Citibase confidence index.

It reveals that trust among Scots SMEs in the UK government’s ability to secure a decent deal for businesses after Brexit has fallen by five percentage points to 39 per cent, compared with the previous quarterly snapshot.

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The survey of more than 1,100 SMEs across the UK shows that, despite this drop in trust, just 14 per cent of Scottish businesses have seen revenues drop as a result of Brexit, compared with 21 per cent UK-wide and 28 per cent in London.

This has dropped from 17 per cent in Q2 and 22 per cent in Q1, suggesting some resilience among Scottish businesses. However, 80 per cent of Scots respondents had seen a fall or no increase in business confidence following the uncertainty surrounding the Westminster election.

Steve Jude, chief executive of flexible office provider Citibase, which has four serviced office facilities in Scotland and is looking to add more, said political and economic uncertainty caused by Brexit and a minority Westminster government was creating an appetite for “cost-effectiveness and agility” in the business community.

He added: “These results are a wake-up call for both the UK and Scottish governments. SMEs are the lifeblood of our economy and it is essential to rebuild their confidence in the future for UK business.

“Scottish small businesses have realised that in the face of uncertainty a nimble approach is vital for success, and this is reflected in the ongoing popularity of our four Scottish centres, where we have seen almost a 60 per cent rise in first viewings during the first half of this year compared to the second half of 2016 and an increase in sales value of over 500 per cent.”

Jude, who is looking to scale the business up to between ten and 20 centres in Scotland, highlighted particular success in Edinburgh, where the firm has expanded to take the whole of its Gyleview building to the west of the city.

He added: “Thousands of small companies – the engine room of a healthy economy – are thriving in flexible office space. The age of the long lease is over for the majority of businesses – and that includes larger corporates too.”

The latest survey also found that opinion was split on who is best to lead the Brexit negotiations.