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UK small businesses urge government to avoid Brexit cliff edge
[LONDON] British small companies are urging the government to seek a transitional arrangement with the European Union to avoid a damaging reversion to World Trade Organization tariffs.
A quarter of companies with fewer than 250 employees would be "genuinely deterred" from trading with the EU should tariffs of any magnitude be introduced, while a third would be put off by tariffs of between 2 per cent and 4 per cent, the Federation of Small Businesses said in a survey published Tuesday.
Sixty-three per cent of companies said that securing free trade with the EU remained the top priority.
"The EU single market is still a crucial market for smaller firms and cannot be undervalued," Mike Cherry, chairman of the FSB, said in a statement.
"We call on the government to ensure that a sensible phased implementation arrangement is put in place to avoid a cliff edge."
The plea comes a day after the British government said it would serve formal notice to the EU on March 29, firing the starting gun on two years of complex negotiations that will pit the UK's desire for a trade deal against the bloc's view that Britain must not benefit from Brexit.
The FSB joins the Confederation of British Industry, the manufacturing lobby group EEF and the Institute of Directors in asking for arrangements to be put in place should new trading relations with the EU not be agreed within the negotiating period.
The business lobby also said its members want a new customs agreement with the remaining 27 members to ensure that exports aren't impeded by tariffs and non-tariff barriers, such as customs checks, once the country leaves.