Over three-quarters of SME business managers want the UK to stay in the European Union and fear that leaving could damage the economy, according to research conducted by private equity house Key Capital Partners.
This comes as senior Conservatives continue to back calls for Britain to leave the EU and pressure increases on David Cameron to legislate for a referendum.
Tory grandees Nigel Lawson and Norman Lamont called for Britain to quit the EU and are in favour of a referendum on the UK’s membership. Likewise, Education Secretary Michael Gove made it clear that leaving the EU would be “perfectly tolerable” and bring some benefits.
Respondents to Key Capital Partner’s Growth Panel revealed that businesses are concerned that free trade will disappear and, rather surprisingly, that increased red tape will slow down business.
Businesses currently benefit from universal regulations from country to country in the EU but this could all change if the UK leaves. Quitting the EU would also mean all foreign staff would require work permits, making it difficult for businesses to hire quickly.
Carl Birch, sales and marketing director at Staffordshire-based manufacturer Wells Plastics, says: “As a company with an extensive, established European customer base it is critical that we are brought closer together as trading partners rather than separated. The purpose of the EU is to provide a harmonisation of rules and regulations, resulting in a better platform for free movement within the member states for trade, people and capital.
“Companies from outside the EU who manufacture and who currently use the UK as a base for manufacture will have a diminished incentive to invest in the UK if we were to withdraw, with obvious significant economic repercussions.”
David Bondi, manager director of TSC Foods, based in Scunthorpe, says: “We are a part of Europe and we need to keep the relationship with continental countries strong. The EU was founded for very specific and important reasons and the union has provided security and stability socially, politically and economically.
“We rely on relationships with continental Europe and it would be very wrong to think that trade relationships would remain the same if we left the EU. Free trade would go out the door.”
Owen Trotter, managing partner of Key Capital Partners, says: “Membership of the European Union is a very divisive issue. The survey shows that this is a concern for businesses, the majority of which focus on the benefits that being an EU member bring. The EU is the UK’s largest trading partner so it is only natural that businesses should be concerned about a possible exit.”
