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More than two-thirds of TechUK members believe a no-deal Brexit on 31 October 2019 will have a negative impact on their business, with questions over skills and recruitment, legal compliance, and continuing data flows between Britain and Europe being some of the biggest worries.
Following a previous study conducted at the end of 2018, TechUK turned again to pollsters Ipsos Mori to quiz 841 members, of which 193 responded, with approximately 41% from businesses with more than 250 staff, 27% from medium-sized firms, and 31% from small businesses employing fewer than 50 people.
Since the previous study, TechUK members have held firm in their views of the impact of a no-deal Brexit, with 71% agreeing it would hurt their businesses (up from 69% last time around), and while more respondents had taken active steps to insulate themselves, this had not made them feel any more positive.
In terms of preparedness, larger businesses tended to say they were either fairly or well prepared for no-deal (87%), while smaller companies were less confident (47%). As of August 2019, over half of small businesses had actually said they had taken no active measures. Those who had not taken any measures tended to say this was because it was impossible to predict the actual implications of no deal.
“In the nine months that have passed since we last surveyed our members, sentiment has not changed about the impact of no deal with the majority of respondents saying it would have a negative impact on their business,” said TechUK CEO Julian David.
“Even for those members we spoke to who have taken steps to prepare for no deal, mainly larger members, it is clear that no deal remains an unattractive outcome.”
“A no-deal Brexit on 31 October will not bring an end to uncertainty for business. The UK will have to return to the negotiating table on 1 November to start talks on a free-trade agreement, with no withdrawal agreement to build on. This will only extend uncertainty and undermine confidence for UK tech businesses.”
The biggest concern arising from no deal among respondents was the overall negative impact on the economy and a slowdown in business, cited by 44%.
A further 12% were most worried about the impact of no-deal on their ability to recruit and retain talent from the EU, while 8% said confusion and uncertainty over various aspects of regulatory compliance was their biggest concern, and a further 8% cited disruptions to the free flow of personal data between Britain and Europe.
TechUK’s findings mirror, to some extent, the findings of another study released earlier this week by financial technology (fintech) trade body Innovate Finance.
Innovate reported that 78% of UK fintech firms were inadequately prepared for no deal, falling to 45% if the UK moves instead into a transition period following a deal at the end of October. Just over a third said they had not taken any steps to prepare at all.
Innovate’s respondents were primarily concerned with financial passporting rights – the regulations that permit banking organisations to serve customers anywhere in the EU, even if they are located in non-Eurozone states – but like the wider tech sector, also discussed issues such as recruitment. Almost 20% said they would consider moving to or basing some operations in a different jurisdiction because of Brexit.
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