The last five years have seen an extraordinary phenomenon. The powerhouse that is the UK tech sector has boomed to a value of more than £180bn, outpacing the sluggish UK economy as a whole. Want to buy clothes online? Asos and FarFetch are leading the world. Play games on your smartphone? You’ve probably enjoyed one made by King.com. Hoping for better healthcare? Babylon Health or Doctify will see you now. The list of great British technology successes goes on and on.
The best way to continue growing this fast-paced sector is for the UK to stay inside the EU. That’s what the vast majority of the sector believes and it stands to reason when you think about the benefits: easy access to a large market, the free flow of coders and product managers and the availability of billions of funding, led by the European Investment Bank. You can find people who work in technology who support Brexit but they are rare and unrepresentative. They mainly work in the supply chains of large vendors rather than in disruptive startups.
The only problem is that staying inside the EU isn’t an option, whatever the polls say. The #PeoplesVote has gained traction lately but has no chance of succeeding as long as the Conservative and Labour leaderships are both against it – and they show no real sign of shifting their view. And the idea that a new Tory leadership would – in time – swing its MPs behind a grand pro-referendum deal with Jeremy Corbyn defies belief. Even if the referendum could be re-run, the process to get there would be very hard. A divided and unwhippable parliament would have to agree to postpone Article 50, and hope the EU would disregard its own legal position and allow the UK to do so. Parliament would then need to agree on a referendum bill and decide on issues such as thresholds, franchise, spending limits etc. Hard doesn’t begin to describe what would lie ahead. You would be better trying to fit two Sundays into a week.
The alternative to all that is a no deal Brexit. For the technology sector, this would be disastrous. There would be no rules governing the exchange of data – so no UK companies selling to Europe could offer any services. There would be no access to high-skilled labour. Few overseas investors would want to take a risk on UK startups.
And the government would be spending billions preventing a crash, money that would not be able to support R&D or replace lost funds from the European Investment Bank going into new companies. The extent to which the government has been distracted in the last two years would be nothing compared with its crisis management under a no deal scenario. Forget the kind of championing of technology that we saw especially under David Cameron and that Emmanuel Macron has shown in France.
That leaves Theresa May’s deal or a still-to-be defined or prepared-for alternative. The 500-page UK-EU deal isn’t going to be priority reading for most of the UK’s entrepreneurs. But at this stage it contains the best possible way forward for the Silicon Roundabout, glen, canals and valleys that have shot up across the country, from London and Edinburgh to Birmingham and Cardiff.
The reason is because it delivers the three things the community needs: market access, high-skilled labour and rules on the transfer of data. Under the deal, the UK and EU will work together to facilitate non-personal data flows and tackle any unjustified data localisation barriers that disrupt businesses by setting rules on where data must be stored and processed. There is also a good chance under this deal that the EU will accept that the UK’s privacy regime adequately meets the EU’s standards and so will ensure continuity of data flows. With the deal there would be no immediate disruption but an orderly process of decoupling, the Gwyneth Paltrow-Chris Martin of international diplomacy.
Finally, the deal sets the country up for a larger discussion about the future relationship with the EU, which will most likely take the form of a free trade agreement along the lines of the one Canada has with the EU, but even deeper. That is going to be critical for companies who need a long-term foundation for their businesses. In recent days there has been a lot of talk of several votes in parliament, an over-confident belief that the UK could get a better deal if only a different set of people were to go to Brussels, as well as unrealistic expectations that various alternatives to May’s deal could quickly be found.
For the sake of the UK’s booming technology sector, Theresa May’s EU deal is the most realistic option. It’s not perfect. Staying in the EU would be better. But that’s not an option. The idea of a new referendum is an understandable but ultimately unrealistic desire. No deal is no fun, to say the least.
For those reasons, MPs from constituencies that have large technology sectors – like London, Manchester and Birmingham but also in Belfast, Leeds and Brighton – should back the prime minister’s deal. And let the country – and its technologists – get back to building the companies and the economy that has proven so successful in the last decade.