This article was first published on City am on 12 May 2016.
As an MP I have always championed small businesses and, when shadow businesses secretary, instigated Small Business Saturday UK – a day devoted to supporting and celebrating our small firms and the contribution that they make to our economy and local communities. Launched in 2013, it is now a successful annual event pushing over half a billion pounds worth of trade to small businesses every year.
Next month small businesses face an important choice: to remain in or leave the European Union.
The Leave campaign often claims that our micro, small and medium-sized businesses are more in favour of leaving Europe than our bigger businesses, who favour remaining.
But there is no evidence for this. Not only are the polls clear – a majority of small businesses consistently support staying in the EU – so is the logic.
Our small businesses benefit from the EU’s Single Market – tariff-free trade and full access to a market of 500m people. In the Single Market, they benefit from a simple set of rules meaning they don’t have to have multiple production lines due to differing product standards.
Many of our small firms are in retail where the impact would be stark. Growth in the sector is already slow. Losing the benefit of our current trading arrangement with the EU could harm growth further by pushing up prices. Currently 28 per cent of produce on our high street shelves comes from the EU. If we left, yes, we could keep these imports coming under World Trade Organisation rules, but these products would face import tariffs, driving up the prices that businesses have to charge customers.
Small firms need stability and certainty to continue growing, not the economic damage and disruption that a leave vote would bring. The London School of Economics has warned that leaving the EU could make the UK economy 9.5 per cent smaller – similar to the damage suffered during the 2008-9 global financial crisis.
Small businesses are more globally minded than ever before and Europe is their largest export market. In 2014, 100,000 small firms exported to the EU. Of all British small and medium-sized businesses that export, 88 per cent do so to the EU. And UK startups that trade are also disproportionately reliant on the EU.
And while small businesses benefit today, there are also opportunities around the corner as the Single Market develops. Outside Europe we would lose this.
Of course, we know the EU is not perfect and we want to see reform. It must improve access to new markets, facilitate access to finance, and promote competition and innovation. But the benefits of today and tomorrow far outweigh the risks.
The Leave campaigns like to claim business opinion is split down the middle on the EU but this is deliberate misinformation. If they were retailers, Leave campaigners would be reported to Trading Standards for selling dodgy goods on this point. Surveys by business organisations, from Tech UK and the EEF to – just this week – the Institute of Directors, show an overwhelming majority backing EU membership. Even after the row over its ex-director general departing to the Vote Leave campaign, a clear majority in the British Chambers of Commerce’s poll continues to back Britain staying in the EU.
So, no matter which way Leave campaigners try to spin it, British business overwhelmingly wants us to stay in. That is why I’d encourage all small business owners, employees, and customers to vote for us to remain in the EU on Thursday 23 June.