After more than two years of turmoil resulting in a further six months of uncertainty, we remain in the dark about what the future of our country – and the business landscape – will look like in the medium-term. This is not good for the UK and it is not good for business.
I’ve made my views on Brexit clear from the start. I voted to remain as I firmly believe leaving the EU is the wrong decision for our future generations, business and the long-term competitiveness and even relevance of the UK.
Continued globalisation is inevitable despite the current period of nationalistic push-back. What we can expect from Brexit is more red tape, trade uncertainty and generally more friction for business, which is essentially more cost. This would come at a time when the UK economy, and our high streets, are in a fragile state.
A unified, connected world is a better and safer world
The long shadow of Brexit will not stop entrepreneurs from starting new businesses, but reduced access to finance and cautious corporate customers or suppliers, paralysed by Brexit uncertainty, will impact the pace of growth and increase risk.
We are forcing our entrepreneurs to attempt take-off with limited fuel into a stiff headwind and uncertain weather. I hope that people aren’t deterred when it comes to starting new businesses as the future of our economy relies on innovation and those willing to take personal and financial risk.
However, I fear that their chances of success are lower during this period of great, and unnecessary, uncertainty.
For more established businesses with ambitions to grow and scale up, there are a number of already identified issues that they face. Research by the Scale Up Institute has highlighted that the UK’s scale-ups already face challenges such as a growing skills shortage, the need to develop leadership skills as well as access to finance and appropriate infrastructure.
Scale-ups are the engines of growth in developed economies with the potential to add billions of pounds and create hundreds of thousands of new jobs in the UK. Last year saw a 15% increase in scale ups in the UK. Limiting the free movement of labour and talent across the EU limits the size of the talent pool and the diversity of thought required for success in global markets.
UK SMEs have been able to access EU funding through the European Investment Fund (EIF) and the European Investment Bank (EIB), which lent €659mn to UK SMEs in 2017.
Local Enterprise Partnerships (LEPs), have also been able to access funding from the European Regional Development Fund (ERDF) and European Social Fund (ESF) to invest in UK businesses.
There are plans to replace these important sources of funding, but EU funding dried up as we approached Brexit and now a further six-month wait will create a funding gap as EU funding becomes inaccessible and before new sources can be provided.
The impact of Brexit on business is tangible and negative and the sooner the outcome is finalised the better for business and especially for our businesses with ambitions to scale up as it is on these businesses that the wealth of our nation depends.
Piers Linney is one of the UK’s most recognisable businessmen, SME champions and entrepreneurs. He is best known for his role as an investor on Dragons’ Den and is a non executive director of the government-owned British Business Bank.