Sophy Ridge on Sunday Interview with Mike Cherry FSB

ANY QUOTES USED MUST BE ATTRIBUTED TO SKY NEWS, SOPHY RIDGE ON SUNDAY

NIALL PATERSON: The Business Secretary told Sky News this week that many thousands of jobs would go if we left the EU without a deal. Many of those jobs could be from small businesses and the Chairman of the Federation of Small Businesses, Mike Cherry, is here in the studio. Mr Cherry, very good to see you again. Just how bad is it for your members at the moment?

MIKE CHERRY: Well clearly at the moment if we just crashed out with no deal it would be a disaster for many small businesses for the simple reason that they don’t have the resource to plan for something that they don’t know what they’re having to plan for and you only have to take this into the complex of where we are at the moment with domestic issues – you have confidence at the lowest it’s been for a considerable amount of time with the fourth quarter index from FSB very clearly showing in negative territory again; you have got cost increases and at the moment business just doesn’t know what it’s got to plan for so how can it plan?

NP: When you say they don’t know what to plan for, surely there can’t be a business anywhere in the United Kingdom that doesn’t consider no deal to be a very real possibility, certainly a lot more of a realistic outcome than it was six months ago.

MIKE CHERRY: Indeed but if you look back at March, many businesses who were able to plan – and that was about one in seven – spent a lot of money, a lot of time either in augmenting or establishing offices overseas, in Brussels, in Amsterdam or in Dublin and of course that never actually materialised. What we don’t want is to go through the same scenario again at the end of October and again have a delay on that, we need to know what we’ve got to plan for, we need to be able to put contingency plans in place if we have to and we need to just get on with this.

NP: And presumably part of that would be some form of financial assistance coming from government, at least on that you are hearing from both the candidates that could be the next Prime Minister that there will be money available to organisation and small businesses.

MIKE CHERRY: Well we certainly hope there is something available but until we know what exactly is going to happen you can’t even say you need money to be available. Business just wants to know what it has to do and if it is a no deal scenario we need government to actually make sure that it is ready itself and be able to inform business what it has to do to comply whether it be tariffs, whether it be customs clearance or other issues.

NP: So has there been anything that’s grabbed you? I mean obviously you will have been paying close attention, as indeed will your members, to the hustings and the debates and the newspaper articles about the next Conservative leader. I mean of the two, who do you prefer?

MIKE CHERRY: No, we don’t choose sides. I think one of the crucial things that people have to remember is that our membership was absolutely split, no different to the general population, almost straight down the middle so we have been concentrating very much on free and open access to trade with the European as much as possible, we need the right people with the right skills and of course we then need to expand, for those businesses that are looking to do overseas trade particularly with the US, Canada, Australia and New Zealand, China and other emerging …

NP: But even within the FSB itself there is a sizeable chunk, not quite half but a sizeable chunk of your membership that is remarkably sanguine about no deal isn’t there?

MIKE CHERRY: There is but that applies on both sides. So we’ve been very, very focused indeed, there have been repeated surveys of our membership on what it is that the businesses need to do, what they want to do to ensure that whether it be a service sector business being able to get their people across into other countries as freely as possible, whether it be trade and even if you had some increases in tax, that would prove hugely detrimental to many, many businesses who are trading with the EU.

NP: Okay, so what happens then, what happens on November 1st to the organisations that you represent, if we leave without a deal?

MIKE CHERRY: Well it is interesting, only the other week I was over in Northern Ireland and you had the example there that a business that currently has all its labels ready to trade within the EU, if there is a crash out on November 1st all of that produce in stock will actually have to be changed if they wanted to deal with the EU and separately within the UK and that is a massive thing for any small business to have to try and contend with.

NP: It is often said – and I just want you to provide a bit of context here – that small businesses are the backbone of the British economy. How true is that today?

MIKE CHERRY: That is very, very true indeed because if you look at how many are actually engaged within a supply chain of one type or another, it’s round about 70% so even though you have only got perhaps 20% exporting, it is a considerable number that are likely to be affected were there to be a crash out with no deal so we’re very, very focused on Parliament coming together, making sure that we have a transition period and making sure that we have a deal so there is only one change that businesses have to contend with.

NP: I come back to the point that I made at the beginning, there cannot be a businessman in this country who doesn’t recognise that no deal is a reality now, it is an outcome that could well come to fruition. On top of that there is the statistic that we talked about previously, that just less than half of your members are kind of quite happy with no deal. Who hasn’t been preparing for no deal?

MIKE CHERRY: Well if I can just come back to the point that I made earlier. At the end of March we had the possibility of no deal and at the end of October we have the reality, the possibility again of no deal but it is a domestic issue and our members are much more focused at the moment on increases in costs. You have got six year, year on year, cost increases on the National Living Wage for those sectors that are having to pay those sorts of wages; you have business rates which is not just on retail; all of these are coming at a perfect time to create that storm that business is being faced with and it’s the domestic issues that are of more concern even now as we approach a new government, a new Prime Minister and the possibility of crashing out at the end of October.

NP: It’s always a bumpy time anyway isn’t it? Mike Cherry, lovely to see again.