More than a quarter of London small businesses still say Brexit is holding back their growth almost a decade on from the pivotal referendum that pulled the UK out of the European Union.
A new poll of small business founders and owners in the capital found that 26% cited Britain’s exit from the free trade bloc as a barrier to growth.
That is higher than any other region in the country and a four-year peak in an annual survey conducted by Novuna Business Finance.
The 10th anniversary of the hugely divisive 2016 EU referendum called by then Prime Minister David Cameron falls in just under a month’s time on June 23.
The nation voted by a slim majority of 52% to 48% to back the Leave campaign and end its 43 year membership of the Brussels headquartered club of European nations, which the UK joined in 1973.
A decade on, the latest survey findings suggest that a large minority of vital growth businesses in London are still struggling to navigate the extra paperwork and duties that they have been saddled with since formally quitting the EU on January 31 2020.
The proportion citing Brexit as a barrier to growth has jumped from 22% last year, suggesting Brexit friction is getting worse rather than better.
After London, Brexit was named as a brake on growth by 25% of Scottish businesses and 22% in Wales and the south east.
The poll findings come as the possibility of Britain rejoining the EU was put back into the mainstream political spotlight by former Health Secretary Wes Streeting who called Brexit a “catastrophic mistake” that left the UK “less wealthy, less powerful and less in control than at any point since the industrial revolution.”
The latest Novuna survey of 1000 small companies conducted last month shows they are being buffeted by a whole host of geopolitical headwinds that are making it hard for them to deliver growth.
Overall, the percentage in London saying they are fighting barriers to growth has hit a five year high of 88%, up from 84% last year, and just 77% in 2024 when Keir Starmer led Labour to victory in the general election.
As well as Brexit, issues named by the companies polled include general macroeconomic uncertainty – cited by 50% of those surveyed – followed by rising oil prices, a factor mentioned by 31% of respondents, and the “impact on higher running costs,” named by 27%.
Not surprisingly, firms in the transport and distribution sector were most likely to say that rising energy and fuel prices were holding back growth with 58% citing this as a barrier.
Jo Morris, head of insight at Novuna Business Finance said: “Our findings show how quickly and how deeply London-based small businesses have felt the impact of rising energy and fuel prices in the UK. Businesses that rely on heavy equipment and transport seem to have felt the impact most significantly.
“Whilst the vast majority of enterprises started the year working on new initiatives to secure growth, this is counter-balanced by the very high number that are trying to overcome obstacles and external market pressures.
“Our tracking suggests that if we want to see a major upturn in UK small business growth forecasts for the summer and autumn months, it is the barriers that need to be tackled first – and urgently.
“Today’s figures on barriers to growth give us an early indication of what to expect from actual growth forecasts for the months ahead.”
