Fear of hard Brexit sparking SME exodus

The number of SMEs looking to establish operations overseas to make sure they can avoid the worst consequences of a hard Brexit has reached the level of 1 in 3.

Figures from the Institute of Directors (IoD) indicated that 29% of those firms its surveyed had moved operations out of the UK or were planning to do so.

Those findings come on the back of research from Agilitas IT Solutions which reported back in September that 52% of UK channel businesses were actively looking to expand their business internationally.

Most of the firms that the IoD spoke to were looking to open offices in the EU and there have already been moves from some in the channel to do just that, with both Softcat and Computacenter opening Dublin offices.

With just weeks left until the UK exits the EU it is still unclear what sort of departure it will be with the odds of a hard Brexit increasing due to the ongoing impasse over the question of the border between Northern Ireland the the Republic.

“It brings no pleasure to reveal these worrying signs, but we can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies," said Edwin Morgan, interim director general of the Institute of Directors.

“While the actions of big companies have been making headlines, these figures suggest that smaller enterprises are increasingly considering taking the serious step of moving some operations abroad. For these firms, typically with tighter resources, to be thinking about such a costly course of action makes clear the precarious position they are in," he added.

Along with many others Morgan called for more clarity from the government to provide business leaders with some clear ideas of what is going to happen so that those still wavering about the future could make decisions.

“We still have a chance to stem the flow, and provide enough certainty to the firms that are considering moving but haven’t yet done so. The UK’s hard-won reputation as a stable, predictable environment for enterprise is being chipped away," he added.