“Hard Brexit” could trigger an increase in business failures

SMEs

Confirmation that the UK is set to leave the single market is likely to have caused a degree of unease among many in the business community.

This week Theresa May made clear that her government intended to withdraw from the trade bloc as part of Britain’s departure from the European Union.

There are concerns that such a move may lead to an increase in the number of companies going into insolvency.

A survey conducted by the trade body R3 prior to Mrs May’s speech made clear that a so-called “hard Brexit” – the option which ministers are now set to pursue – carried greater risks to businesses.

Over three quarters of those who took part in the poll believed that the move would trigger an increase in business failures. Of these, 41 per cent thought that there would be a “moderate increase” in corporate insolvencies, while 35 per cent feared a “significant increase.”

Less than one in ten respondents believed that there would be no rise as a result of UK’s departure on these terms.

The majority of members also had concerns about a spike in the number of personal insolvencies, believing that economic fluctuations would inevitably take their toll.

The survey was conducted in November last year and 343 R3 members took part.

Independent columnist James Moore said: “[It is] worth remembering that these people have no particular political axe to grind.

“They aren’t a part of any ‘project fear’. They are simply reporting on business conditions as they find them, and as they expect them to be.”

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