Brexit pulse check: how do small businesses view Brexit?
On 29 March 2018, the UK enters the final year of negotiations on leaving the European Union.
So one year on from the triggering Article 50, and with just one year to go until the UK officially leaves the EU, we wanted to find out what the nation’s small businesses think as the deadline draws nearer.
Over the next 12 months, AXA will be tracking the sentiment of small business owners in the UK¹ to get their views on Brexit, how recent negotiations have been going, and how their views may have changed over time.
Current Sentiment:
Moderately remain
So what do small businesses really think?
How did you vote in the EU referendum 2016?
To begin, we wanted to find out how the respondents in our survey voted in the referendum in 2016.
In comparison to the official referendum result (51.9% leave, 48.1% remain), the respondents in our survey voted to remain in the European Union by small margin, 49% to 45%.
We also found that the most pro-EU industry (at the time of the vote) in our sample was professionals, who voted to remain in the EU by 54% in 2016 , while the only sector to vote Leave in 2016 in our survey was the trades group, who voted Leave by 49% to 45% Remain.
If the referendum was held again tomorrow, how would you vote?
Since the referendum in 2016, overall there has been a small shift in sentiment towards remining in the EU, from 49% to 51%.
This change is seen most starkly in the service audience segment, which has moved six points in favour of Remain from 47% to 53% since 2016. Retailers have also seen a shift towards Remain, from 50% in 2016 to 54% in our survey.
In contrast, the professionals group is the only segment in our sample which has seen a shift towards a Leave vote since 2016. Despite being the most pro-EU segment at the time of the referendum (at 54% Remain), there has been a four point swing towards Leave, although the majority still favour staying in the EU.
(DON'T UNDERSTAND)7%
(COMPLETELY UNDERSTAND)68%
How well do you feel you understand what Brexit means?
Overall, the respondents in our survey believed they were quite well informed about what Brexit means and the impact for the UK. 68% said they understood Brexit to a good to high degree, with just 7% saying they didn’t understand what Brexit entailed.
As with other segments, professionals on average came out on top, with 76% saying they understood what Brexit meant compared to 63% of retailers.
How do you think the recent Brexit negotiations are going?
Across the board the view of current negotiations was negative, with just 17% of respondents believing the negotiations were good for the UK.
Interestingly, despite viewing Brexit more positively that other groups in our survey, professionals viewed the negotiations more negatively that other groups. 63% of professionals said things were going badly for the UK and just 14% said they believed they were going well.
The tradesman segment were the least decided about the current state of Brexit negotiations – they had the highest level of ‘don’t know’ replies in our survey at 36%.
Do you think Brexit will have a positive or negative impact on your business?
From our survey, this question had by far the most mixed response, with an even split between those who thought Brexit would have a positive and negative impact on their business, suggesting that businesses are still unsure about the long-term impact of Brexit.
Again, professionals had the highest percentage of positive responses at 33% to 27% negative, while retailers felt least optimistic about the future impact of Brexit. 38% of retailers thought Brexit would have a negative impact on their business, compared to just 26% positive.
Conclusion
Our findings suggest that, while there has been a small shift towards Remain, small businesses are largely sticking to their initial instinct on Brexit. And despite an overall negative impression of the UK’s current negotiation strategy, there is little evidence of panic yet.
A we move into the final year of negotiations, and with questions still unanswered about the Single Market, the so-called ‘divorce bill’ and trade deals following Britain’s EU exit, the next 12 months will be crucial for the UK’s small businesses.
Have your say
What’s your view on Brexit? Has your opinion changed since the vote in 2016? Or are you more unsure than ever about the impact the vote will have on your business? Have your say in the comments below, or tell us about it on social media @axainsurance.
1AXA survey of 500 small businesses, initial wave conducted November 2017