Brexit - SFA warns Small Firms to Prepare for the Worst

Wednesday, 29 March 2017

    • Small Business Brexit Toolkit - SFA Warns Prepare for the Worst
    • Government must act now to safeguard Irish small business
Following the triggering of Article 50 by the British Government today, the Small Firms Association has published a toolkit for small businesses to help them to practically prepare for Brexit in their own business. Sue O'Neill, SFA Chair commented: "Whilst many factors are outside our control, it is important for each small business to assign senior management responsibility to assessing the impact on their own business, and developing contingency plans for likely impacts. Companies should pay particular focus to assessing the potential impacts of currency movements, along with supply chain, commercial contracts, finance and funding and workforce considerations. They should also reassess the impact on technology, in particular issues around data sharing, likely changes to regulation and market access, and change their own operating structures accordingly."

O'Neill emphasised the singular impacts of Brexit on Ireland, over and above other EU members states, and called on the EU Commission to prioritise these concerns in their negotiating strategy. "The UK is a key marketplace for our small exporting companies, with 43% of exports from all indigenous exporters going to the UK market. It is a learning ground when they’re starting up, and it is not easy to diversify into other markets farther afield without significant resources, and in the food sector, differing tastes also acts as a barrier. Equally, the UK is our biggest market for tourism visitors, which has an impact on local economies right around the country. The threat of recession in the UK post-Brexit is very real and we would be very concerned about the knock-on implications of that for our entire domestic economy, given our interconnectedness."

A survey of SFA members identified the three most negative impacts of Brexit on small firms as:

1. Exchange rate movements (48%)
2. Cost of exporting to Northern Ireland/Great Britain (39%)
3. Pricing (38%)

41% of SFA members reported in November that Brexit had already had a negative impact on their firms. 68% expect a negative impact in the next six months. A minority of 10% think Brexit will be positive for their business.


O'Neill called for the Government to act now to ensure that "exemptions can be made to state aid rules to allow our Government to give financial support to those exporting companies that have decimated by an exchange rate decline of up to 24%. A new export financing offering is an important element of Ireland’s response to Brexit, along with Government agency assistance to diversify into new markets, and for innovation. The maintenance of the common travel area with the UK is essential. Issues affecting the border with Northern Ireland and businesses who operate close to the border must be given the attention and sensitivity that they deserve."


In conclusion, O'Neill stated: "Whilst much of the discussion to date has focussed on the exchange rate volatility and investment confidence, it is important that our Government clearly focuses on issues in our own locus of control. Going forward, we need Government to become obsessive about our cost-competitiveness and tax competitiveness vis--vis the UK. Our minimum wage, general labour costs, insurance costs and interest rates are priority issues for us on the costs side, whilst creating a more entrepreneurial friendly tax regime, including reduced CGT and personal tax and innovative employee share option schemes are priorities in this year’s Budget."

Ends

For further comment or interview, contact Sue O'Neill, SFA Chair, on tel: 087 9013311
Issued by: Patricia Callan, SFA Director on Tel: 01-6051602 or 087-6999345; e-mail: patricia.callan@sfa.ie
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