The UK and Europe

The UK’s smallest businesses need the full picture before the EU referendum

Simon McVicker / Nov 2015

Photo: Shutterstock

The day Britain heads to the ballot box and determines our future role in the EU might not be until 2017, but the debate is already hotting up.

Both the “remain” and “leave” campaigns have been launched in the last month with influential politicians, industry leaders and TV personalities adding their voices to one side or the other. But there are uncertainties around what each of the campaigns are offering the electorate.

In the “leave” campaign, things have been fractious; disagreements between Nigel Farage’s “Leave.EU” group and the more mainstream “Vote Leave” camp led by Lord Lawson were such that a single united group to campaign for exit couldn’t be formed from the outset. Two conflicting views of “Brexit” between a fortress UK and a global trading nation have shown a lack of clarity over what the future outside the EU would look like – and it is something the ‘out’ campaign needs to address before the campaign really gets underway.

Meanwhile, David Cameron’s demands for a renegotiation with Brussels are finally on the table. But whether they amount to much has been questioned as Eurosceptic Tory MPs rounded on the reform plans. Jacob Rees-Mogg described David Cameron's EU reform plans as "pretty thin gruel", saying that people expected much more, while Bernard Jenkin, another Conservative, asked: "Is that it? Is that the sum total of the government’s position in this renegotiation?" John Baron added: "In his letter, the Prime Minister fails to adequately address the central issue of sovereignty

So what is he asking for? He wants to exempt the UK from the treaty commitment to “ever closer union”. He wants to protect Britain’s access to the Single Market, cut red tape and ensure competitiveness is written into Europe's DNA. The final and most controversial demand is to restrict access to benefits for migrants from inside the EU. He’s keen to get things moving and agree the reforms before the next EU summit on 17-18 December, with the potential to hold the referendum as early as June 2016. But even with these rather general asks he’s likely to face staunch opposition from other Member States, particularly in Eastern Europe where restrictions to EU migrants’ access to welfare will be unpopular. Martin Schulz, the hugely powerful president of the European Parliament, says he thinks David Cameron's plan to restrict migrant benefits could be illegal. Other countries such as France and Spain have strong reservations about giving a greater role to national parliaments. Therefore reaching a deal that works for the PM could be tougher than he hopes.

IPSE wanted to know what all this means for independent professionals in the UK. We’ve been surveying our members to find out how the self-employed feel about the possibility of a “Brexit” and what would be the best outcome for their businesses. Around 15% of the UK’s workforce is self-employed and of those, 11% have worked abroad in the last twelve months. IPSE is the strongest voice for this group in the EU, representing 67,000 independent professionals, contractors and self-employed people, and we also work with the European Small Business Alliance and the European Forum of Independent Professionals.

We wanted to know whether most freelancers understand how the renegotiation could affect them and what they’re expecting from the PM before 2017. Of the 3,150 respondents to our survey, 61% said they’re likely to vote to stay in because that’s what’s best for business, while only a quarter (24%) would vote to leave. There is a caveat though: although 41% of freelancers are likely to vote to “remain” regardless of whether any reforms are achieved, a further three in ten (29%) need to see real change before they can be convinced that our membership is worth keeping.

Respondents identified a wide range of things they’d like to see from the Government in order to support membership. The most common concern (for 64% of independent professionals) was around keeping UK businesses on a level playing field with their counterparts in the EU, by ensuring the UK doesn’t “gold-plate” EU legislation and make regulations tougher in the UK than in other EU countries. A similar number (61%) want to ensure all countries within the EU implement the rules to create a level playing field within the single market. Making the EU more accountable for its actions and subject to greater scrutiny to Member States and parliaments is also important (60%), as is tightening the rules on immigration rules for non-EU citizens (58%).

We know the Prime Minister is pushing both for the EU to be more competitive and for a reformed immigration policy for EU migration to the UK, which reflects some of the concerns of our members.

What was also significant was the number of independent professionals who simply don’t know how membership of a reformed EU would affect their business. For example, when asked whether employment legislation would be less burdensome for business if we left the EU, one in five respondents (19%) had no idea. A similar number are unsure whether the overall regulatory burden will be lower if we vote to leave.

There’s still lots of uncertainty among the smallest businesses. We’re using this feedback to inform our position on Britain’s EU membership and we’ll be pushing hard to ensure that the concerns the self-employed have raised are being taken into account. We’ll also be sharing it with decision-makers, business groups and the campaign groups.

It’s unclear as to whether David Cameron will return triumphant from his negotiations with Brussels. What we do know for sure, though, is that the UK’s vast self-employed community needs to know exactly what the consequences are of a “Brexit”, or indeed staying in a reformed EU, before they cast their votes.


Simon McVicker

Simon McVicker

November 2015

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