Brexit: View from the tech sector

By Paul Hide, Director of Marketing and Membership, techUK

As we approach 29 March, the date the UK is due to leave the European Union, the chances of leaving without a deal remain significant. As our Brexit Survey revealed, many of our members have not yet taken active steps to prepare for such a situation.

While techUK has been vocal in its opposition to a No Deal Brexit, we have been actively briefing our members of the various steps that they can take to mitigate some of the potential impacts of leaving the EU without a deal. There are a number of pieces of information from various Government bodies that you should be aware of if you have not yet started your planning.

Business Hub

The Department for Business has created a Hub to help businesses prepare for Brexit. The EU Exit Business Hub contains a survey that you can use to identify any of the Government’s Technical Notices on No Deal that may apply to your business. You can also find more user-friendly guides to issues such as how EU workers can apply for Settled Status, changes to the legal basis for using personal data and how rules covering import and export of goods will operate.

The Information Commissioner’s Office Hub

The Information Commissioner’s Office has published its own webpage on data protection and Brexit. This includes a “six steps to take” guide and a tool that can help you identify what, if any, Standard Contractual Clauses you may need to insert into contracts in order to maintain the legal basis for the flow of personal data between the UK and the EU.

In addition, it is also important to note that US companies that utilise the EU/US Privacy Shield will need to amend their public commitments to ensure that the UK remains included come 29 March.

Further preparation

In response to the overwhelming rejection of the Withdrawal Agreement by Parliament, techUK released results of a poll showing that 70 per cent of our members who responded believe that a No Deal Brexit this March would have a negative impact on their business. The survey also shows that 84 per cent of respondents believe the UK overall is unprepared for No Deal.

The poll, which was conducted in December ahead of the planned Parliamentary vote on the Withdrawal Agreement, sought the views of techUK members on what they thought should happen if Parliament failed to support the Withdrawal Agreement. techUK has consistently warned of the risks of No Deal and the need for an orderly exit that would allow for a close future relationship with the EU.

When asked to rank their preferences for what techUK should do if the Prime Minister’s deal failed to secure the support of Parliament, 51 per cent of the 276 respondents said that supporting calls for another referendum would be their first preference choice. 63 per cent of members selected a second referendum as one of their top three preferences.

Only 11 per cent of members responding viewed accepting No Deal as their first preference, with less than one third (27 per cent) listing it in their top three preferences. Very few respondents (two per cent) selected a General Election as a first preference and only 25 per cent included it in their top three preferences.

The survey further suggests that while most larger firms (250+ staff) have taken steps to prepare for a No Deal Brexit, many smaller tech businesses are unprepared for the UK leaving without a deal, with 65 per cent of smaller firms (<50 staff), and 46 per cent of mid-sized businesses (50-249 staff) who responded to the survey, saying they have taken no active steps to prepare for No Deal. When asked why they have not taken steps to prepare for No Deal, many firms said it was because they were unable to predict what impact it would have (49 per cent) or were unsure what steps to take (37 per cent).

The survey also suggests that the majority of techUK members want a close relationship with the EU after Brexit, with six in 10 respondents supporting closer alignment with the EU compared to ‘looser’ alignment. techUK believes this runs counter to the view expressed in the Chequers White Paper that more flexibility over the rules surrounding the digital sector would be preferable post-Brexit, even if it meant losing some access to EU markets.

Commenting on the survey, techUK CEO, Julian David, said: “techUK has consistently warned of the dire risks of a disorderly exit from the EU. The Withdrawal Agreement would have provided a workable route forward, but this has been overwhelmingly rejected by Parliament. The UK now risks No Deal by default unless the deadlock can be broken.

“Our polling suggests that many of our small and mid-sized members in particular do not have the resources or information needed to effectively prepare for No Deal. They want a deal that works and a future relationship that retains a high level of alignment and access to the EU market on issues that matter to the sector, such as the free flow of data, regulation and the availability of talent. We believe a simple ‘Canada-style’ free trade agreement would not be an acceptable outcome for most of techUK’s members.”