The Spring Statement for 2019 was announced on Wednesday 13th March by the Chancellor of the Exchequer, Philip Hammond. The Chancellor states that he is committed to the growth of the the UK economy and therefore needs the focus of leaving the EU, to be a ‘smooth transition to a partnership that protects the complex trading relationship, businesses have built up over 45 years’. Such optimism is welcomed by many trade experts, as the expected increase in import tax, if there is a no-deal Brexit, will force businesses to stop trading.
Furthermore, Hammond announced that Britain will invest up to £260 million for innovate borderlands growth, which includes allocating funds for a new supercomputer in Scotland, medical advances, climate change and photonic facilities. This eases some anxiety within the innovative sector as it is predicted that both high- growth and technological advances will be one of the most affected industries as the UK withdraws from the EU.
On a positive note, cumulative growth is slightly higher then what was forecast in the last budget, which shows that productivity has recovered from the initial shock of the Brexit vote; suggesting the economy is not looking so bleak.
It is vital to address the impact of leaving without a deal and what this will mean for businesses especially SMEs. The chaos and disruption would be a short term fix, eventually reflecting in the long run, which will lead to a less prosperous economy. However, what is reassuring is that Hammond held a strong position on protecting capital investment. He states ‘our capital is the world’s financial centre’ and ‘our businesses are at the edge of tech revolution’.
With this in mind, let’s analyse how SMEs will be directly affected. The most worrying outcome will be the immense struggle for growth due to lack of trade, investment and funding to name a few. Such struggles are expected to cause businesses to find themselves in a state of limbo where they may be forced to navigate their way through the storm, so to speak. SMEs contribute greatly to the global economy, but especially within the UK. In London alone, 49.8% of employment has been attributed to SMEs. So, the wider societal impact as a result of a ‘difficult trade’ situation or a no-deal result will be disastrous.
With all this being said, until Brexit is actually executed, no one is for certain on what will happen, even Hammond. However, what we can do is take steps to prepare ourselves for the best and worst possibility of the outcome.