Post-Brexit Britain: What will happen to the UK’s tech scene?

Back in March, I went to parliament for a debate on how Britain’s tech scene would cope in the event of a vote to leave the European Union. Back then – and, in truth, up until this morning – a vote for Brexit seemed unthinkable, but it’s definitely worth returning to the piece now to examine exactly what the outcome of the EU referendum means for Britain’s tech scene, and the jobs that depend on it.

I have received a few comments in my inbox from tech business types, but the most interesting so far has been from Ed Molyneux, the CEO and co-founder of FreeAgent (an accounting service for freelancers, so on the pulse of not just startup culture, but also those with less secure incomes). Here is what he said in full:

“This result is a big blow to the UK’s micro-business sector and I think that a lot of people will be very concerned about what the future will hold.

“It was clear during the run-up to the referendum that the overwhelming majority of micro-business owners and freelancers were in favour of the UK remaining in the EU, and that they did not think a ‘Brexit’ would be beneficial for their own businesses or the economy in general.

“The ramifications of leaving the EU are going to be huge – especially for small businesses who sell products and services worldwide, rather than just domestically. And we now look set for a lengthy period of uncertainty while negotiations presumably take place over the terms of the UK’s exit.

“I would therefore urge the government to be as swift as possible in providing updates about how these discussions are progressing, and give every business owner in the UK clear, up-to-date information about what the effects of Brexit will be on important issues such as trade and tax. The last thing the business sector needs is to be kept in the dark.”  

The original article continues below: 

At 9.35 on Wednesday 16 March, I finally managed to navigate parliament’s airport-style security and found my way to a small chamber at the back of Portcullis House, regretting not taking the ‘allow 15 minutes’ instruction seriously. I needn’t have rushed – as it turned out, the debate on the British technology industry in the event of an EU exit, organised by the Parliamentary Internet, Communications and Technology Forum (PICTFOR), hadn’t quite got under way. They were very possibly waiting for stragglers like me to show up, but judging by the number of badges left unclaimed, scheduling this debate on the day George Osborne announced the Budget probably wasn’t great for take-up.

There’s a certain irony that the annual statement on Britain’s finances should distract from the future of UK technology. The majority in the room seemed to feel that voters calling time on our 43-year union with Europe would cause economic upheaval.portcullis_house_eu_debate

The panel was chaired by the BBC’s Rory Cellan-Jones, and the majority of panellists were tech-sector CEOs and experts, broadly of a Europhilic bent. Eamon Jubbawy, co-founder of Onfido, said his company “operates best in a borderless world”, while Julian David, the CEO of techUK, claimed that 70% of his members plan to vote to remain within the EU, citing international investment, access to the EU market and a competitive sector as their main influences. Bindi Karia, an advisory board member of Startup Europe Initiative offered similar statistics, saying seven out of 10 startups surveyed would move away from London in the event of Brexit, and highlighting anecdotes suggesting that the uncertainty of the situation is actively harming international investment in British technology.

Just one politician appeared on the panel – Conservative MEP Daniel Dalton, who was broadly in favour of remaining in the EU due to concerns that a freshly Brexit-ed UK would struggle to access the single market. There were, however, a handful of MPs and peers in the audience, some of whom raised points during the 90-minute discussion. A quick glance at the attendees list shows more SNP and Tory interest than Labour, although Chi Onwurah, the shadow minister for culture and the digital economy, did arrive half-way through proceedings, apologising for the delays due to ‘Budget Day’.

On the Eurosceptic side was Peter Chadha, CEO of DrPete Inc, who suggested that many of the arguments against the EU (that it’s expensive, stubborn, unmanageable and featuring too many unequal economies) were especially damaging to technology in the UK. “We hear about risk every day,” he explained early on, “but if we stay, things can’t change.”

He faced a somewhat uphill struggle, representing, as he did, just one man’s opinion, albeit one that was based upon real experience of dealing with the EU in the 1990s. While others on the panel were able to discuss the views of the startups they represent and deal with on a daily basis, Chadha’s views were usually prefaced with “I think” and “I believe”. Everyone knows that there’s a degree of uncertainty in a Brexit vote, but this demonstrated it pretty clearly for anyone in the room left in any doubt. While the Europhiles could cloak themselves in the wisdom of crowds, Chadha appeared a frequently isolated voice.science_eu_brexit

Still, he did come prepared. The UK, he explained, imports £100bn more than it exports, leaving Britain in a strong position to negotiate access to the single market should the population vote to cut and run. He even made the somewhat contentious point that tech giants minimising their UK tax commitments were partly enabled by EU membership.

The other recurring theme for those backing a Brexit vote was that although membership of the EU gives us access to a marketplace of over 500 million people (both as potential talent and customers), it is at the expense of business with the rest of the world. Even the pro-EU Jubbawy conceded Chadha’s point that securing the visas of talented American, Canadian or Russian workers was prohibitively difficult.

Still, the practicalities of finding ourselves suddenly outside of the European Union were brought home by a couple of interesting hypotheticals, the first raised by David, who suggested that there are certain aspects of the recently passed Investigatory Powers Bill that the EU may take exception to, if no longer enacted by a member state, potentially increasing the red tape rather than reducing it, and damaging our ability to play nicely with our European neighbours.

And while even the most arch Eurosceptic sees the EU as an advantageous trading block when approached from outside, one questioner asked about an unforeseen consequence of Brexit: what if Britain’s exit sees the collapse of the whole European project? Dalton fielded that question, and argued that it’s possible, and if it did transpire, then Britain would no longer have the option to deal with a single 500-million strong market, but 28 different markets with their own unique laws.

These may sound like bureaucratic hypotheticals, and to a degree they are, but they’re also practical ones. As Dalton emphasised in his opening statement, “digital is global by default”, and anything that makes inter-country cooperation more difficult isn’t helpful.

“The digital single market is going to happen in or out, and if we’re out, it’s going to be much more protectionist,” he explained in his closing statement. Chadha, however, struck an optimistic note for Brexiters, saying: “There is nothing to fear, and change is what this is about. I do risk every day – I don’t see any of these risks as insurmountable.”

Perhaps the most memorable quote, however, was attributed to a surprisingly unlikely source: Otto von Bismarck. One audience member quoted the first German chancellor in reference to the way that EU regulations are brought to life: “If you like laws or sausages, never watch how either are made.”

That may well be true, but if the informal vote at the end of the debate was anything to go by, the British tech sector would rather see these particular sausages maintain their continental flavour. Whether the public at large will agree with that assessment in June is still very much up for grabs.

READ NEXT: Brexit and science – what impact would Britain voting out have on the country’s scientific output?

Image: PICTFOR. Image from Bobby Hidy and UK Parliament used under Creative Commons

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