The UK economy, particularly small companies, are currently facing the twin challenges of Brexit and the pandemic. The FCA (the Financial Conduct Authority) and FSB (Federation of Small Business) have both published figures this month that show the alarming impact on SMEs (see below).  Whilst the Government recognise that it is a challenging year and are helping with grants, they do not appear to have recognised a distortion in the market, caused by Brexit, that is affecting one of the UK’s most important sectors.

The MD of UK Business at Amaiz (www.amaiz.com), the business banking app, Steve Taklalsingh has today called on the Government to urgently address the distortion. Taklalsingh says: “On Brexit, we urge the Government to focus on resolving and ensuring clarity on the sectors that have the most impact on the UK economy, particularly the service sector and especially financial services.

“What’s most unfair about the current situation, is that EU FinTech companies can operate in the UK, but without e-passporting, UK companies cannot now operate in the EU. We can see challenger banks based in the EU, particularly in Amsterdam and Germany, eyeing up the UK market already.

“Financial Services is 12% of UK’s GDP and our vibrant start-ups are a key part of that, so it really can’t be ignored like it has been.”

Steve Taklalsingh is available to provide further comment on the topic. Amaiz recently published a report looking at the impact of Brexit on SMEs and their readiness for change. The report is available free to download from http://journal.amaiz.com/amaiz-guide/ 

If you would like more information please do drop us a line at kat@onyxcomms.com and anne@onyxcomms.com // 020 7 048 2700 

The Statistics

The FSB found that just under 5% of smaller companies expect to be forced to close this year, the largest proportion in the history of the Small Business Index and could mean that 295,000 companies will go under [1]. 80% did not expect their prospect to improve during the year and a quarter had already cut staff numbers. 16.8 million people work for small business so the impact on the economy, as well as lives, will be very significant.

At the same time the FCA found that 59% of smaller financial firms expected that their profits would take a hit this year [2]. 

[1] https://www.fsb.org.uk/resources-page/at-least-250-000-uk-small-businesses-set-to-fold-without-further-help-new-study-warns.html

[2] https://www.reuters.com/article/us-health-coronavirus-britain-markets/up-to-4000-financial-firms-could-fail-due-to-covid-says-uk-regulator-idUKKBN29C0R7?edition-redirect=in