UK SMEs call for snap election after Brexit takes place – as confidence in Government drops26/10/2018

•  59% of SME decision makers would like to see a snap general election after Brexit happens in March 2019, with ‘BoJo’ emerging as most popular candidate for Prime Minister

•  Confidence drops – 52% are confident in Government to negotiate a good deal for SMEs, down from 58% in Q2

•  52% think Government will meet March 2019 deadline, down from 62% in Q2

•  However, 62% have already started, or are about to start, creating a post-Brexit strategy to deal with any issues that may arise

•  74% now want office contract lengths of less than three years – up 10% from last year

Following a precarious few months in the political arena, including the departure of two key Brexit figures, 59% of UK SMEs would like to see a snap general election once we leave the E.U, according to the latest Citibase Business Confidence Index. Confidence in the Government to deliver a good deal for SMEs has also dropped to 52%, down from 58% in Q2 this year, driven by the recent reports of a possible ‘no-deal’, while 54% of SMEs (down from 62% in Q2) think the Government will finalise negotiations by the March 2019 deadline.

The exclusive quarterly survey of 1,046 SME decision makers by flexible office champion Citibase, reveals that during this sustained period of uncertainty, many UK SMEs are taking the initiative, with 62% reporting that they have already started – or are about to start – creating strategies to deal with post-Brexit issues that may arise. Part of this includes de-risking when it comes to office contracts, with 74% now preferring office contract lengths of less than three years, up from 64% one year ago, suggesting that the “fear of commitment” remains – providing stark contrast from the long office leases of years gone by.

When considering an office, SMEs rated high speed internet (59%), flexible, short-term contracts (36%) and the ability to easily change the size of your space (45%) as the top three priorities. While often grabbing the headlines, features such as an on-site café/bar (17%) and lifestyle facilities such as gyms and wellness areas ranked poorly (18%) in terms of importance, suggesting that SMEs want to get on with the running of their businesses without costly extras.

Financially, 60% of UK SMEs have seen revenues rise or stay the same – down from 67% in Q2, suggesting that Brexit jitters are starting to be felt in parts of the country. 46% have found it harder to attract investment or raise finding, down slightly from 49% in Q2 this year but still up from the 37% in Q1. Those in London (61%) and the North East (67%) have found it most difficult.

Despite making numerous incendiary remarks and being at the heart of a ‘civil war’ among his own party, 23% of SMEs would still like to see Boris Johnson as the next Prime Minister, closely followed by Theresa May (21%) and Jeremy Corbyn (17%). Interestingly, support for ‘BoJo’ is particularly high in the North East at 30%, while unsurprisingly Nicola Sturgeon takes precedence in Scotland with 23% of the votes.

Steve Jude, Citibase CEO, comments: “While confidence levels have stooped to a new low, it is reassuring to see many SMEs already making post-Brexit business strategies as they look to de-risk. A large part of this is the shunning of traditional long lease offices in favour of agile, flexible work spaces that allow them to thrive without being tied down for the long-term.”

“Smart building owners and landlords can also thrive during these uncertain times, turning to flexible office providers like Citibase who can transform their underused spaces, whether a single floor or an entire building, into profit-generating assets packed with a vibrant community of SMEs.”

The exclusive quarterly Citibase Business Confidence Index, now in its second year, reflects the views of 1,046 small businesses across a wide variety of sectors including marketing, PR, financial services, travel and recruitment.

Key headlines and regional splits

•  59% of SME decision makers would like to see a snap general election after Brexit happens in March 2019, with ‘BoJo’ as the preferred candidate for Prime Minister. In the North East, Jeremy Corbyn is the favourite (32%), as well as in Yorkshire (36%), while in the South East, South West and East/East Anglia it is Theresa May

•   Confidence has dropped – 52% are confident in Government to negotiate a good deal for SMEs, down from 58% in Q2

•   54% think the Government will meet the March 2019 deadline, down from 62% in Q2

•   74% now want office contract lengths of less than three years – up 10% from last year

•   Almost three quarters (74%) desired short term office contracts of three years or under, up 10% from this time last year

•   61% of SMEs would like to reverse the Brexit process and stay in the EU – down from 66% in Q2 2018

•   46% of SMEs have found it harder to raise funding or attract investment since the referendum – up from 49% in Q2 2018. Those in London (61%) and the North East (67%) are most likely to have found it more difficult

•   Business leaders in all regions apart from East/East Anglia are most likely to think their own region will be hardest hit by a no-deal result. E.g. 59% in London think it will be London, 28% in Scotland think it will be Scotland, 42% in the North East think the North East

•   The priorities that SME decision makers consider to be the most important for the Government’s Brexit negotiations are negotiating strong trade deals (31%); controlling immigration (27%) and regaining control of laws (19%)

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