EU Referendum

Sajid Javid warns small businesses over EU exit

Sajid Javid Image copyright EPA

Leaving the EU would be bad for small businesses, Remain-backing minister Sajid Javid has said.

The business secretary said 1.2 million small and medium firms were involved in exporting to the EU, saying they would be "on the front line" if the UK votes for an exit on 23 June.

But Leave campaigners said Mr Javid had "changed his mind" on the EU.

Vote Leave said the government's figures were "highly questionable" and that EU "red tape" damaged businesses.

In a speech in Birmingham, Mr Javid claimed EU regulation was "getting lighter" because of UK lobbying and predicted a "screeching" return of tariffs in the event of an exit.

He appeared alongside Piers Linney of TV show Dragons' Den, after seven past and present members of the show's panel backed a vote to stay in the EU.

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With the UK in the EU, Mr Javid said, small and medium-sized enterprises (SMEs) were able to export to the world's largest market, "right on our doorstep".

He warned of an "economic shock" that would come if there is a vote to leave.

"Small businesses are the backbone of the economy," he said.

"Let's not break that backbone by taking a leap in the dark."

Leave campaigners have said small businesses are more sympathetic to their cause than large multinationals, due in part to the effect of "red tape" emanating from Brussels.

Mr Javid said it was "myth" that only large firms wanted to remain, adding that 1.2 million SMEs were "involved in exports to the European Union" including 400,000 who sell directly to the EU.

Louise Stewart, of the Federation of Small Businesses, said members of her organisation were divided on EU membership and the organisation was remaining neutral in the debate.

She told BBC Radio 4's Today programme FSB members "really want more information".

"We might be talking about it every day in the main, but there seems to be more heat than light in some cases."

Vote Leave's John Longworth, the former head of the British Chambers of Commerce, pointed to Mr Javid's previous criticism of the EU, suggesting his backing for Remain was motivated by his "political career".

"EU rules damage all British businesses, and smaller businesses in particular - and hold us back from trading freely with the rest of the world," he said.

While 6% of British firms export to the EU, he said, "100% are caught up in red tape and costs from Brussels".

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