HM Treasury News Release
200/98 25 November 1998
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MORE SMALL AND MEDIUM SIZED FIRMS GETTING
READY FOR THE EURO
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 talking
to 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 90% 94% 97%
single currency
Awareness of 11% 23% 27%
1 January 1999
Will the euro
affect 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."
NOTES FOR EDITORS
1. The second Treasury survey was carried out for the Central
Office of Information by Taylor Nelson Research Ltd (TN)
between 15 and 30 October 1998. 1,768 interviews were carried
out with SMEs, on a statistically representative basis. Both
reports are available on the EPU website at www.euro.gov.uk.
2. The survey showed that the Treasury national advertising
campaign reached more than 75% of those interviewed, raising
awareness of the introduction of the single currency and its
possible implications. An analysis of business responses to the
advertising and follow up mailshot to 1.6 million SMEs was
announced on 12 November (HMT press release 189/98).
3. Media copies of the survey are available from the Treasury
Press Office on 0171 270 5188.
4. Copies of the factsheets ("business preparations for the euro")
and other euro related material can be obtained by calling
08456 01 01 99 or from the EPU website, at www.euro.gov.uk.
5. Contact details for the regional Euro Forums can also be found
on the EPU website.
6. If you have access to the Internet, you will find this press
release and material on other Treasury issues at
http://www.hm-treasury.gov.uk.
# = pounds sterling