Claim: The EU Single Market stops small businesses from thriving
Summary of the Claim
Rupert Lowe has periodically argued that the EU Single Market holds back smaller firms and prevents them from thriving. His comments generally suggest that the regulatory framework of the Single Market benefits larger corporations and disadvantages small businesses that lack the resources to navigate complex rules. This fact-check examines whether evidence supports the broad claim that the Single Market stops small businesses from thriving.
Where the Claim Was Made
While no single definitive statement from Lowe has been universally cited, he has repeatedly framed EU regulation and Single Market rules as bureaucratic burdens on small firms. These comments typically arise in discussions about Brexit, deregulation, and the competitiveness of British businesses. The claim analysed here reflects the general assertion he has made in interviews and online posts.
Verdict: ℹ️ Lacks Evidence
The claim cannot be substantiated. There is no clear empirical evidence that the EU Single Market systematically prevents small businesses from thriving. Research in this area consistently shows that outcomes for small businesses depend on factors such as industry, export orientation, and firm size. Some firms face challenges, but many others benefit from reduced trade barriers, expanded market access and shared regulatory standards. The available evidence is mixed and does not support a generalised claim.
Evidence and Analysis
1. Academic research shows mixed effects, not universal harm
A comparative study titled “The Single European Market and SMEs: A comparison of its effects on small and medium-sized firms” found that the Single Market has varied impacts depending on the type of business involved. Some firms benefit from access to a large unified market, while others experience pressure from increased competition.
The study did not conclude that the Single Market stops small firms from thriving. Instead, it presented a complex picture where opportunities and risks depend heavily on sector and export activity.
2. Research on UK SMEs before Brexit contradicts Lowe’s claim
A 2019 study by Brown, “The Potential Impact of Brexit on UK SMEs,” found that many UK small businesses valued access to the Single Market. In survey responses, a significant proportion of SMEs expressed concern that leaving the Single Market would increase costs, reduce market opportunities and disrupt supply chains.
This contradicts the idea that the Single Market inherently disadvantaged small businesses. Many firms viewed it as an asset rather than a barrier.
3. Economic research indicates the Single Market reduces barriers that disproportionately affect small firms
Trade barriers such as border checks, divergent product standards and customs procedures tend to be more burdensome for smaller firms with limited administrative capacity. The OECD’s working paper “The trade impact of the UK’s exit from the EU Single Market” found that leaving the Single Market would reduce trade by around six percent and increase the complexity of exporting.
If the Single Market were stopping small businesses from thriving, then leaving should logically improve their prospects. The OECD’s analysis indicates the opposite: small firms are more vulnerable to the increased frictions that arise when leaving the Single Market.
4. Post-Brexit evidence shows smaller firms struggled more outside the Single Market
Research from the London School of Economics in 2024 found that small firms experienced disproportionately higher declines in EU exports after the UK left the Single Market. Larger firms were better able to absorb new administrative costs, while small exporters were more likely to scale back activity.
This supports the conclusion that the Single Market had reduced some of the regulatory and trade burdens that disproportionately harm SMEs, rather than preventing them from succeeding.
5. Sector-specific challenges exist, but do not support a general claim
Some sectors with heavy regulatory requirements, such as food production or chemicals, may experience higher compliance costs within the Single Market framework. However, these sectors also gain from frictionless trade with 27 member states, which reduces logistical and procedural costs.
For other sectors, especially service-oriented or digitally-focused small firms, Single Market rules often provide clearer protections, predictable standards and simplified cross-border operations. In many cases these features support, rather than inhibit, growth.
6. Parliamentary evidence shows SMEs were among the groups most affected by leaving the Single Market
Written evidence submitted to the UK Parliament’s committees on Brexit and trade policy repeatedly highlights that smaller firms face substantially higher costs when trading outside the Single Market. These include administrative overheads, customs delays and increased red tape.
This indicates that the Single Market removed friction that disproportionately affects small firms.
Conclusion
The claim that the EU Single Market stops small businesses from thriving lacks evidence. Across academic work, government analysis and trade research, the conclusion is broadly consistent: small businesses experience a mix of benefits and challenges within the Single Market, and outcomes vary by sector. There is no substantial empirical basis for Lowe’s general claim. If anything, multiple studies show that leaving the Single Market has created new obstacles for SMEs that previously benefitted from reduced barriers and predictable regulatory standards.
Because the claim overgeneralises complex economic conditions and is not supported by reliable data, it is rated Lacks Evidence.
Sources
• Smallbone D., “The Single European Market and SMEs” (Middlesex University)
• Brown R., “The Potential Impact of Brexit on UK SMEs” (University of Essex)
• OECD Working Paper: “The trade impact of the UK’s exit from the EU Single Market”
• Sampson & Novy, “Brexit and UK Trade” (LSE)
• Written Evidence to UK Parliament Committees