Article by Robert Scammell – Verdict
Parliament is prorogued, the House of Commons speaker is stepping down and prime minister Boris Johnson has lost six votes in as many days.
But for all the fanfare in Westminster, the country remains in stasis, none the wiser as to whether the UK will still be in the European Union come 31 October and if not, whether it will be with a deal.
The UK’s technology industry has reacted to the latest Brexit developments by reiterating the same message it has directed at the government for the past three years: deal or no deal, give us certainty.
While MPs successfully passed a bill blocking a no-deal Brexit – forcing Johnson to apply for an extension should he not secure a deal – there is speculation that the government is seeking ways to get around this.
“Even though no deal has been blocked, we have seen over the past three years that things change quickly, so we have to be prepared,” says James Butland, vice president of global banking at Airwallex, a fintech firm specialising in international payments.
“Whichever way you voted, Brexit has been a huge distraction for businesses and a lot of hours have gone in to preparing for all eventualities. We now need certainty from the government so that we can focus on our core mission to build the best product for our customers, globally.”
Guy Tweedale, regional vice president of sales at Rocket Software, a software development company, said that the legislation to block a no-deal scenario “should be welcomed across the tech community” but warned the sector isn’t “out of the woods yet”.
“As we’re now skidding towards the Brexit ‘deadline’ at the end of October, we’re seeing increasing nervousness in the automotive industry about the global nature of manufacturing, with many components crossing borders multiple times,” says Butland.
“No-deal Brexit, or increased tariffs on EU car sales in the UK, will put the automotive industry into a further decline and most likely slow down electric vehicle sales growth, as a proportion of total vehicle sales, as a result. And this is something we will continue to prepare our customers for.”
Majority of UK firms not prepared for Brexit
But research conducted by Ivalua, a procurement platform, found that companies like Rocket Software are in the minority, with just 23% reporting that they have fully developed Brexit contingency plans.
“Despite the spectre of leaving without a deal, many businesses are in no-deal denial, completely unprepared for the free movement of goods to come to an abrupt end,” says Alex Saric, smart procurement expert at Ivalua. “There will be no transition period and no time to prepare, meaning the business environment will literally change overnight.”
The craving for Brexit certainty among the UK’s tech industry has even lead to some Remain-supporting business leaders preferring the certainty of no-deal over the current uncertainty.
“We have always been focused on Europe and see ourselves as a European business, so the best scenario is to remain,” said Simon Hill, CEO of idea management platform Wazoku. “But as that can’t happen now, I had come around to the idea that no-deal would be preferable to more uncertainty.
“The country (and tech community within it) desperately needs clarity, leadership and direction and another long period of stasis would be damaging. The whole situation is a mess and we need clarity and stability sooner rather than later.”
Brexit impact on tech talent
Other tech sector leaders voiced fears about the impact of Brexit on attracting top tech talent to UK shores.
“With so much up in the air, the ongoing Brexit saga is a rallying cry to tech companies in dire need of the talent it will take to survive,” says Jonquil Hackenberg, head of c-suite advisory at Infosys Consulting.
“The science and technology sector is already strapped by a scarcity of talent – which Brexit delay will only exacerbate. This will affect existing talent in the UK as well as potential talent from Europe and beyond, whether or not no deal is off the table.”
Malcolm Taylor, director of cyber advisory at cybersecurity consultancy firm ITC Secure, said that that the technology sector “craves certainty”, much like the rest of British industry.
“The technology sector remains extremely concerned that a crash out exit would be extremely damaging and cost investment, revenue, jobs and businesses,” says the former British intelligence officer.
“Whilst the government has been reluctant to produce detailed ‘no deal’ scenario planning, there is a consensus that all of them are damaging; that is not viewed any differently in the tech sector.
“Indeed, in an industry carrying both a skills shortage and very portable labour, there is a concern that the sector may feel it more than some.”
Data sharing post-Brexit
Taylor also questioned what happens regarding data sharing arrangements post-Brexit. It is a question on the minds of many, with recent research conducted by NetApp revealing that 43% of UK tech leaders have concerns about where their data will reside post-Brexit.
The UK’s government’s leaked ‘Operation Yellowhammer‘ no-deal preparation documents warns that if an agreement on data is not reached between the UK and the EU, this could “disrupt the flow of personal data from the EU, where an alternative legal basis for transfer is not in place. In no-deal, an adequacy assessment could take years”.
However, the UK’s data regulator, the Information Commissioner’s Office (ICO), published a recent blog explaining some of the myths around post-Brexit data sharing.