The UK’s narrow vote to leave the European Union has exposed deep splits over what the effects will be, not least among entrepreneurs.
Askar Sheibani, founder and chief executive of Comtek, a telecom equipment repair business based in north Wales, with a £12m turnover, thinks the implications are so serious that the UK government will not dare go through with it. “If we are out of the single market, it will be highly damaging and the UK will be isolated,” he says.
Yet Meenu Malhotra, chairman and chief executive of Malhotra Group, a family-owned leisure, care homes and property company based in Newcastle, with a turnover of £30m, says: “As the dust settles and we get our trade agreements in place, I think Britain as a nation will be better off.”
Surveys before the referendum suggested that while there was a clear majority among bosses of larger companies in favour of staying in the EU, those running small and medium-sized businesses were more evenly divided.
On the Remain side were entrepreneurs such as Lord Sugar, presenter of BBC television’s The Apprentice and government “enterprise tsar”, and Virgin Group founder Sir Richard Branson. The Leave side had figures such as Luke Johnson, chairman of café chain Patisserie Valerie, and the inventor Sir James Dyson.
As the UK develops plans for quitting the EU, differing hopes and fears are also emerging. While some business owners are relaxed, others fear barriers to exporting, difficulties in hiring and a potential drift of technology start-ups to other countries.
Mr Sheibani, originally from Azerbaijan, came to the UK in 1972. After studying electronics at Liverpool Polytechnic, he worked in telecommunications before starting Comtek from a garden shed in Reading in 1989.
About 40 per cent of Comtek’s business is exports, mostly to Europe. Mr Sheibani plans to mitigate potential harm from Brexit by transferring some activity to offices in Frankfurt and Amsterdam. Comtek employs 200 people, half in the UK, including engineers from Italy, Greece and the Netherlands.
He fears hiring staff from EU countries will be harder. Before the vote he planned to double the number of UK-based employees within three years. Now, “our best scenario is we will stay the same and in the worst case we would reduce the number of employees.”
Mr Malhotra, who came to the UK from India 37 years ago, does not believe Brexit will hinder his business plans. He expects his UK-based employees to rise to 1,200 this year, up 150 on a year ago, and to exceed 2,000 within five years.
The business is building three hotels and aims to construct seven care homes within five years, as well as opening half a dozen restaurants and bars. “There are huge opportunities,” he says. “We Brits are quite resilient. We just get out and do it.”
John Mills, a leading Labour party donor and Brexit campaigner, is “reasonably buoyant and optimistic” about the prospects for JML, the consumer products company he founded in 1986, specialising in retail promotions, TV home shopping and ecommerce. It employs 300 and exports account for 40 per cent of its £80m turnover, including 15 per cent to Europe.
Mr Mills wants Britain to pursue policies to drive the pound’s exchange rate down further in order to make the economy more competitive and spark a manufacturing revival. JML imports products but has previously done some manufacturing in the UK, and could “easily” do so again. “At the moment these products all come from China, where we can buy them for two-thirds of the price we can get them made for in the UK.”
Jo Sellick, founder and managing director of the Sellick Partnership, a financial and legal recruitment firm with offices in seven English cities, was shocked by the referendum result but saw business increase in July and August after a pre-referendum slowdown.
“I am apprehensive about the future but I think there will be opportunity,” Mr Sellick says. He says the department for exiting the EU (Dexeu) is seeking large numbers of lawyers with experience of contract law and Brussels, and he predicts that consultancy firms will “create a huge market for themselves” by advising clients on how to deal with a UK exit. As a provider of temporary and contract staff, Sellick Partnership could benefit.
His main worry is controls on immigration. “There are a lot of hard-working Europeans that contribute to the British economy who soon won’t be able to do that. Who is going to do their jobs?”