‘Brexit at 10’
Drawing on 12-years of tracking research, exploring small business growth outlook since 2015, Novuna Business Finance today releases a new report ‘Brexit at 10.’ The report for the first time draws together research on small business owner sentiment to Brexit, and their reactions – good and bad – to the anticipated and unforeseen Brexit impacts, which endure to this day.
Some key highlights over time from the report:
January 2017: Six-months after the Brexit vote, 56% of small business owners believed there would be positive opportunities for their business as a result of Brexit. The top factor cited at this time was small business owners believing the UK Government would be obliged to do more to support British small businesses (22%). In addition, 21% of respondents felt there would be less red tape holding small businesses back and 18% thought that UK consumers would become more likely to buy goods from UK businesses.
Set against this, 44% of small businesses didn’t feel there would be positive opportunities for their business as a result of the UK voting to leave the EU – and by July 2017 this figure had risen to 48%. The regions where small business owners were least likely to see business benefits from Brexit were the West Midlands (51%), Scotland (47%), Wales (46%) and London (46%).
June 2017: A month before the 8 June 2017 General Election, small business owners were asked what they would like to see a new government do to help their business grow. Beyond the immediate issues of simplifying regulation and red tape (40%) and lowering taxes (35%), Brexit emerged as a top issue. Nationally, 29% of small businesses said they wanted to see strong leadership in managing the UK’s exit from the EU (29%) – whilst 31% of small business owners said they wanted a new government to reverse the decision on Brexit. A further 24% of respondents said they wanted the new government to get on with negotiating favourable trade deals beyond the EU.
January 2019: Reflecting on 2018 and looking into 2019, many small businesses cited Brexit as an issue that had negatively impacted their enterprise (30%). The second biggest concern (16%) was the falling value of Sterling (16%) and the rising cost of imports ranked third (12%).
Spring 2022: As the UK re-emerged from Covid restrictions, 27% of small businesses that mentioned barriers to growth pointed to the impact of Brexit. And by Spring 2026, this figure still stood at 20%. For the last five years, the legacy of Brexit has been a top-five growth barrier for small businesses, never falling below 20%.
Growth in the domestic market: One clear shift over the last decade has been a growing move by small businesses to open up new markets and customer segments within the UK. The percentage of small businesses looking to expand into a range of EU markets has shrunk.
A Brexit link to underlying growth forecasts: Small business growth forecasts have settled at a lower level since 2022. This correlates with the period when Brexit was cited by small businesses as a long-term barrier to growth. This can’t be taken as cause-and-effect – because many factors contribute to small business growth forecasts – but it can be considered to be a correlating factor, because the time periods are the same.
Jo Morris, head of insight at Novuna Business Finance comments: “One benefit of having studied small business sentiment for 12 years is our Business Barometer data covers the full duration of significant events. We have the before, during and after data on how the pandemic impacted small business outlook; we can see how small business views have changed ahead of different General Elections, and we have observed the business impact of the cost-of-living crisis since it started back in 2022.
“These full journeys of insight help us to understand the events and issues that small businesses have had to react to – and to spot the trends that have evolved over time. There are differing views on Brexit today, as there were in 2016. For some small businesses, it has been greeted as an opportunity, for others Brexit is still viewed as a challenge. The one thing that hasn’t changed over 10 years is that people continue to disagree on whether Brexit is a good or a bad idea.”