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COLUMN: Neil Warwick - Leaving the UK in jeopardy?

THE recent Close Brothers Business Barometer has shown that as many as 38% of North East SMEs believe that the UK should leave Europe.

THE recent Close Brothers Business Barometer has shown that as many as 38% of North East SMEs believe that the UK should leave Europe.

Ignoring the irony that the term SME (small and medium-sized enterprises) is entirely a construct of European law, this figure is not surprising and is slightly higher than the national average. The survey highlights that 32% of all SMEs simply want to leave the European Union, but a larger and more considered 58% believe that struggling European economies would harm our economy.

These statistics are timely, given the debate over whether or not there should be a referendum on the subject. It should however be noted that 46% of SMEs surveyed stated that we should stay in the European Union as we would potentially isolate ourselves as a country if we were to leave. As with all statistics there is a need to analyse what these potentially conflicting messages can tell us. For example, given the North East has a higher pro rata percentage of SMEs than any other region in the UK (or more accurately a much lower pro rata percentage of larger companies) it is not surprising that more SMEs in the North East were opposed to Europe. This is particularly pertinent as the concept of Europe is synonymous with red tape in the eyes of SMEs.

A significantly higher proportion of businesses felt leaving Europe would have an isolating effect. Again this will be more acute in the North East as it is the only region in the UK to export more than it imports and its largest trading partner is Europe. The fact that 58% of those surveyed felt the weaker accession states and the Southern European economies could affect the UK economy would be accurate if we were part of the European Monetary Union, which thankfully we are not.

In 2012 the UK’s contribution to Europe was £12bn. However, the return to the UK was almost exactly the same amount. The difference being that when the EC returns the money to the UK it does so with certain conditions on how the money may be spent.

From a North East perspective, whilst some aspects of the European Union are undoubtedly imperfect, there is still a better chance of Brussels being sympathetic to our region’s needs than there is of Whitehall having the same view.

:: Neil Warwick, partner at the region’s leading law firm, Dickinson Dees.



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