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Over half of the UK’s SMEs call for second referendum as flight to flexibility escalates in Brexit Britain

  • SMEs take “flight to flexibility” with almost three quarters preferring short-term office contracts of under three years
  • 54% of SMEs would welcome a second referendum on whether or not to accept any EU exit deal that is reached
  • Just 33% of SMEs trust government to secure a good deal for UK businesses post-Brexit
  • 56% of SMEs do not expect Theresa May’s premiership to continue for a full term – however she is still considered the best person to lead the UK’s Brexit negotiations
  • 23% of SMEs see revenue drop in wake of EU referendum

54% of UK SMEs would welcome a second EU referendum on whether or not to accept the exit deal that is reached following Brexit negotiations, according to the latest Citibase Business Confidence Index, reflecting rising uncertainty caused by stalling Brexit talks and the suggestion that Britain could be prepared to walk away from the EU with no deal at all.

Now in its fourth quarter, the survey of over 1,100 SMEs by flexible office provider Citibase, revealed that as a result of the ongoing uncertainty, cost-conscious SMEs are increasingly seeking short-term flexible office contracts, with almost three quarters (74%) stating that they want terms of less than three years. This has risen dramatically since the first quarter survey (Q1 = 57%) and is particularly prominent in the North East, where 90% of businesses preferred this lease length and Scotland (81%), reflecting Citibase CEO Steve Jude’s sentiment that “the battery has gone flat on the long office lease.”

Despite a dramatic Conservative party conference and internal leadership challenges, Theresa May is still the most popular choice as the best suited leader to represent the UK in Brexit negotiations (29%), with Jeremy Corbyn the second most popular choice again (20%). The slightly more outlandish potential candidates, Alan Sugar and Russell Brand, also received nominations. The much debated prospect of Jeremy Corbyn becoming prime minister was met with mixed response, with 34% of SMEs believing he would have a positive effect on their business, and 38% believing he would have a negative effect.

While she is still considered the best leader for Brexit, 56% of businesses do not expect Theresa May’s premiership to continue for a full term, a figure that is slightly lower in London at 48% and particularly pronounced in the North West at 65%. Equally damningly, confidence in the government’s ability to secure a good Brexit deal for UK businesses has continued to drop, with only 33% of UK SMEs now expressing their trust in the government’s negotiation abilities, down 2% from the previous quarter and 11% from Q2.

When asked for their three most important office features, SMEs prioritised high speed internet (71%), flexible short-term contracts (44%) and the ability to easily change the size of their space (44%). Despite being a hot topic at present, extra ‘lifestyle facilities’ such as a bar, ping pong tables and leisure spaces were favoured by only 16% of respondents, suggesting that SMEs want practical, affordable and flexible spaces with superfast connectivity that allow them to get on with running their business as opposed to costly distractions and extras.

The index has also revealed that 23% of SMEs cite Brexit as having a negative impact on revenue, a figure which has grown by 2% each quarter this year (Q1 = 17%, Q2 = 19%, Q3 = 21%). This impact was more pronounced in the capital, with 30% of London businesses reporting a drop in revenues. Meanwhile, 33% of SMEs are expecting a negative impact on their businesses when Brexit actually takes place, the same figure as the last quarter. This figure drops to 25% in the South West and climbs to 42% in London and 50% in the North East.

SMEs are a vital part of the UK economy, numbering up to 5.5 million in total nationwide*. The Citibase Business Confidence Index reflects the views of small businesses across a wide variety of sectors, including travel, finance, marketing, legal, research and IT, gauging opinions on the impact of political events on important factors such as revenue, morale, and expectations for the future.

Steve Jude, Citibase CEO, comments: “The heady combination of stalling Brexit talks, unrest within the Government and the suggestion that Britain may be prepared to walk away with no deal at all is causing unrest among SMEs – which are the lifeblood of our new economy. As a result, we are seeing a significant shift towards flexibility and agility, with nearly three quarters of entrepreneurs, start-ups and small businesses now shunning longer term, traditional office leases in favour of shorter terms in our latest exclusive quarterly index. This was particularly pronounced in the North East, where a massive 90% of SMEs expressed their desire for contracts of under three years. This is hard evidence that more and more businesses are waking up to the opportunities of taking low-risk contracts in fully serviced flexible officing hubs, allowing them to focus on what’s important – the success and growth of their businesses.

“These uncertain times also provide a golden opportunity for smart building owners to prosper, by looking to flexible officing companies like Citibase to transform their underutilised workspaces into cash generating assets. Whether it’s an empty floor or entire building, Citibase have nearly 25 years of experience in transforming office buildings. We manage the whole process from start to finish, creating vibrant spaces and filling them with entrepreneurs, start-ups and SMEs, and providing a reliable source of hassle-free revenue for the building owner. The government needs to ensure that they take a similar, agile approach to the future of the UK, allowing SMEs to thrive and paving the way for economic success.”

 

*FSB, UK Small Business Statistics

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