The majority of Britain's small businesses think Brexit would damage the UK economy.

The Zurich SME Risk Index showed on Wednesday that 54 per cent of small businesses believes British withdrawal from the EU would be bad for the country compared with 33 per cent who want to see Britain leave Europe.

The polls continue put the Tories and Labour neck and neck, so the prospect of a referendum on EU membership remains uncertain. However, according to Open Europe's Brexit Barometer there is only a 17 per cent chance of Britain leaving the EU in the next Parliament.

“Two months ahead of the general election, we wanted to take the temperature of SME attitudes towards the changing political situation and how it could affect them", said Jason Eatock, head of SME at Zurich.

"Interestingly, while Britain’s businesses are currently unsure about what the effects of the election itself could be, they have strong views on an EU exit and its effects on the wider economy" he added.

Aside from the issue of Brexit, 43 per cent of SMEs said they wanted to make cutting red tape a top priority. On the day of George Osborne's last budget of this Parliament, respondents were split on whether the coalition had been good for SMEs.

Almost 40 per cent had a positive view of the government while just under a third said it had no impact and a quarter said it had been negative.