HISTORIC PRESS RELEASE : More Small and Medium Sized Firms Getting Ready for the Euro [November 1998]
The press release issued by HM Treasury on 25 November 1998.
Action to prepare for the euro on 1 January 1999 among UK small and medium sized enterprises (SMEs) has more than doubled since May,Minister for Trade and Competitiveness Lord Simon announced today.
But the overall level of preparation suggests that many SMEs have still not recognised that they may be at risk of losing out in the new economic environment which the single currency will bring, according to a survey for the Treasury published today.
Commenting on the survey results, Lord Simon said:
“This survey shows clearly that the number of UK businesses preparing for the launch of the euro on 1 January 1999 has more than doubled. This growing number shows that the Government’s work with business organisations across the UK has had positive results.
“We are making progress, but not fast enough.Almost half UK SMEs have trading links with EU markets and risk losing competitiveness. Of these, only a quarter (23%) have begun preparations so there is more work to be done. But this is double the number who had prepared in May and the trend is encouraging.
“The survey suggests that about 200,000 SMEs who need to prepare are getting ready to face the opportunities and challenges ahead, attending courses and seminars and talkingto suppliers and customers. But we should not be complacent.There are still many who have so far done nothing.
“The report also shows that very few SMEs have focussed on the key market-related preparations which are so important to win business. Customers and pricing strategies are just not getting the attention in comparison to changes to IT and accounting systems. Marketing changes remain a priority to ensure UK SME competitiveness.”
These figures are included in the results of the second survey of SMEs carried out for the Treasury Euro Preparations Unit (EPU). This follows up the first survey carried out in May 1998 which formed the benchmark for the Government’s national information campaign to raise SME awareness of the euro.
The surveys track overall awareness of the single currency, the sectors of SMEs likely to be affected by having direct or indirect EU trading links, and how far they have made preparations. Comparative figures for levels of awareness and preparation in England, Scotland and Wales are:
May 1998 October 1998 October 1998
| (All respondents) | (All respondents) | Those with EU links | |
| Awareness of single currency | 90% | 94% | 97% |
| Awareness of 1 January 1999 | 11% | 23% | 27% |
| Will the euroaffect my business? Q. not asked | 48% | 62% | |
| Is it important for my business to prepare? | 31% | 34% | 49% |
| Businesses already made preparations? | 5%; | 13% | 23% |
Column 1 and column 2 show responses from all SMEs, in the surveys of May and October 1998 respectively. Column 3 shows responses only from those SMEs (approximately half) who have one or more trading links with the EU.
Levels of awareness and preparation for Northern Ireland are generally higher than in the rest of the UK The survey shows that SMEs in Northern Ireland had higher levels of awareness and preparations than Great Britain. 99 per cent were aware of the single currency. Over half (54 per cent) thought that it would affect their business; 47 per cent considered it important for their business to prepare; and 17 per cent had already made preparations.
Outlining action to help British business prepare for the euro, Lord Simon said:
“Since the election, the Government has worked continuously with British business to ensure that information and support to prepare for the euro are available. Firms will be able to hold company accounts and pay tax and VAT in euro if this gives them a business advantage.
“We have held business seminars across the UK and set up regional forums for business representative organisations to coordinate their preparations in every region. I am impressed by the determination of businessmen and women to ensure that their businesses are ready.
“Our set of 20 fact sheets, helping businesses look at their trading activities and identify action points, have been very popular as an excellent starting point for firms looking to prepare. Boosted by our TV and other advertising, over 300,000 have already been requested.
“The Government will continue to help UK SMEs up to and beyond 1 January 1999. It is vital that they do now take urgent steps to prepare for the coming change to the whole European business environment.”
