Fast-growing companies opposed to leaving EU, says ECI Partners survey

Sir Danny Alexander
Sir Danny Alexander
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FAST-GROWING companies are overwhelmingly opposed to Britain leaving the EU, according to a survey by a leading private equity group.

The survey by ECI Partners found 91 per cent of rapidly growing businesses oppose a so-called “Brexit”, with 53 per cent saying that quitting the EU in the referendum on Britain’s membership due by the end of 2017 would damage their companies.

But Business for Britain, the group headed by Yorkshire businessman Alan Halsall that is campaigning for fundamental EU reform, called the survey “disingenuous” and said it did not reflect the breadth of opinion across companies.

The survey found by region, Scotland and the North East were the most Eurosceptic, with London and the North West being the most supportive of EU membership.

Slow growth in Europe and the strong pound are hindering exports, with 27 per cent of companies not expecting to grow outside the UK in the next 12 months.

The number of companies seeing sterling strength as a barrier to exporting rose from 24 per cent in 2014 to 34 per cent this year, and 77 per cent in the industrials sector cited sterling as a key barrier to growing exports.

Business for Britain, whose co-chairman is Mr Halsall, chairman of Silver Cross, the Yorkshire manufacturer of prams and nursery products, said the survey did not present an accurate picture of business opinion.

Communications director Paul Stephenson said: “It seems to be heavily skewed to people who want to export to the EU, but we know from national figures that only five per cent export, so we’d question how representative it is.

“We published a survey of SMEs last week that showed the EU was hindering rather than helping business. There is a real divide across business opinion, but I think trying to claim 91 per cent of businesses want to stay in the EU is disingenuous.”

Besides its findings on remaining in the EU, the survey reveals 91 per cent of companies are still plagued by skills shortages which present a long-term challenge for businesses. IT, sales and marketing skills were most in demand.

Almost half of companies would welcome tax incentives for investment in staff training to help address the problem and boost productivity.

However, the funding landscape has improved. A record high of 73 per cent expect it to be easy to secure finance. Only a quarter expected difficulties, down from a third in 2014.

Businesses are increasingly looking to private equity to fund growth with 69 per cent considering it.

However, manufacturers are still struggling, with 43 per cent saying it will be difficult to obtain funding.

ECI partner Charlie Johnstone said: “Our sixth annual growth survey shows that UK gazelles continue to battle with serious obstacles including widespread skills shortages, and the impact of the strong pound.

“They must also contend with growing uncertainty around the planned referendum on EU membership.”

And the former Lib Dem Chief Secretary to the Treasury, Sir Danny Alexander, said: “ECI’s research gives us clues as to why fast growing businesses, the real drivers of our economic recovery, are so overwhelmingly pro-Europe.

“Exporting businesses see Europe as a key market. Firms facing skills shortages can recruit across the EU.

“Many foresee the negative consequences of Brexit for their businesses. To thrive in a competitive global economy, I believe that Britain needs to be fully engaged in Europe.”

ECI’s portfolio includes Harvard Engineering, which is based in Normanton.