UK tech sector responds to the escalating prospect of a no-deal Brexit

What a week! As Theresa May’s Brexit deal, which is not due to be voted on until mid-January, faces apparent unwavering resistance from many of her own MPs, preparations for a no-deal Brexit has escalated.

3,500 armed forces personnel are on standby and according to the UK Health Secretary Matt Hancock, the UK is now the world’s largest buyer of fridges as the NHS attempts to stockpile drugs. (At least we will have plenty of ice- Ed)

The prime minister’s spokesman said: “Cabinet agreed that with just over three months from our exit from the EU, we have now reached the point where we need to ramp up these preparations. This means we will now set in motion the remaining elements of our no-deal plans.”

The European Commission has begun implementing its “no-deal” Contingency Action Plan. The plan looks to address 14 key areas where a no-deal would create “major disruption for citizens and businesses” including financial services, air transport and customs.

Amidst the chaos, numerous business organisation and trade bodies including, the CBI, Institute of Directors and the manufacturing body EEF have put together a joint statement accusing MPs of focusing on “factional disputes” instead of protecting jobs.

Their joint statement says: “Businesses have been watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward. The lack of progress in Westminster means that the risk of a ‘no-deal’ Brexit is rising. Businesses of all sizes are reaching the point of no return, with many now putting in place contingency plans that are a significant drain of time and money. Firms are pausing or diverting investment that should be boosting productivity, innovation, jobs and pay, into stockpiling goods or materials, diverting cross-border trade and moving offices, factories and therefore jobs and tax revenues out of the UK. While many companies are actively preparing for a ‘no-deal’ scenario, there are also hundreds of thousands who have yet to start – and cannot be expected to be ready in such a short space of time.”

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A no-deal for tech

Leading figures and spokespeople from the tech sector has been quick to weigh-in.

In a Statement techUK CEO, Julian David, said: “Digital businesses were assured that they would have clarity on Brexit by the end of 2018. Instead, they will now go into the New Year facing real uncertainty about the direct impact of Brexit on their business and its wider impact on the UK economy.

“Brexit uncertainty is imposing more costs on tech businesses and driving jobs and investment away from the UK.

“The only thing worse than continued uncertainty is the risk of a no-deal Brexit. Those who talk about a ‘managed no-deal’ are pedalling a fantasy. While tech businesses will prepare for a No Deal as best they can, the reality is that many of the hard challenges that tech companies would face in the event of No Deal cannot be ‘managed’ away. Commercial contracts, investment, staffing and data are all at critical risk in any No Deal Brexit and anyone suggesting otherwise needs to listen to the tech businesses of all sizes who will be directly impacted by a disorderly exit from the EU.”

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“The Government has now confirmed that the vote will take place in the week of 14 January. This date must not move again. Time is running out to reach a Brexit agreement, and the digital businesses that are building the modern economy cannot wait much longer for certainty.”

Mike Butcher, editor at large for TechCrunch, took to Twitter and argued: “How does business prepare for no-deal Brexit when we still have no idea what regulatory framework we’ll be working within? Or how badly the currency will tank? The only viable way to prepare is to offshore, thus creating jobs abroad, not in the UK. #BrexitShambles.”

Meanwhile, the Information Commissioner’s Office (ICO) has urged British businesses to review how they handle personal data as the potential of a no-deal Brexit hovers. In a statement, the ICO warned that leaving the EU without a clear deal could impact how data in transferred between the UK and the rest of the European Economic Area. While Theresa May’s proposed deal allows for the existing data transfer legislation to continue.

Elizabeth Denham, Information Commissioner at the ICO, said: “Organisations will need to carefully consider alternative transfer mechanisms to maintain data flows and the guidance we have produced will help you weigh the options and take action if this proves necessary.”


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Andrew Ross

As a reporter with Information Age, Andrew Ross writes articles for technology leaders; helping them manage business critical issues both for today and in the future