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One year on and one week in - what does Brexit mean for tech?

A good Brexit deal for the UK will rely on getting a good deal for the UK tech sector

The 23 June 2017 marks one year since the UK voted to leave the European Union (EU). It also marks the end of the first working week of formal Brexit negotiations.

The clock is ticking on possibly the most complex negotiation the UK has ever undertaken as we seek to unwind more than 40 years of regulation and collaboration.

It was always to be expected that the first week of negotiations would be largely formal. After the UK accepted the EU’s proposed sequencing of the negotiations, real skirmishes this early would be unlikely.

However, the sequencing agreement does mean that we know the first items on the agenda – the money owed by the UK as part of the “divorce bill”, the Irish border and, crucially, the future of UK and EU citizens abroad.

With around 184,000 EU citizens working in the UK tech sector alone, and with many UK citizens working for digital business abroad, it is vital that the UK and EU give certainty to those whose immigration status may be affected by leaving the EU.

On Thursday 22 June we saw an outline of the UK’s proposals from Theresa May, with Brexit secretary David Davis confirming he will publish further details on Monday. While the proposal is a positive start, we await further details on crucial issues such as the verification process, the right to family reunification and pension rights. The final proposal must be a generous, comprehensive deal that truly takes those who have built their lives and careers here in the UK out of legal limbo.

Tech skills needed

That comprehensive offer will have to be followed, later in the negotiations, by renewed thinking on both sides of the Channel about the future of UK/ EU immigration. The referendum result made clear that many British people want to see a better way to manage and control immigration.

However, it’s equally clear they still welcome those who work in vital public services and bring the skills, including tech skills, that help our economy succeed.

Whatever the final outcome, as chancellor Philip Hammond said recently, the economy must be front and centre of the Brexit discussion. No one voted for a Brexit that makes Britain poorer, and that means creating an immigration system that supports our economy while restoring public trust.

Putting the economy centre stage is all the more important given the climate in which we find ourselves one year on from the historic vote.

The increased uncertainty resulting from the hung parliament sits alongside economic volatility that has seen a falling pound and increased inflation, with recent signs that consumers are beginning to feel the effect. Given this uncertainty, it is clear that a responsible Brexit is one that takes the time needed to get it right.

Severe economic shock

That is why TechUK has warned government of the risk of a “cliff edge”. Far from “no deal being better than a bad deal”, a Brexit crash landing is the worst possible outcome for the UK tech sector.

A severe economic shock could do significant damage. Given that firms which primarily produce or consume digital goods and services account for an annual turnover producing £3.14tn a year, such a shock would have serious knock-on consequences for the entire economy.

A soft landing, whatever the type of final deal, will require a long runway. That means the UK should maintain its membership of the single market and the customs union for an interim period after March 2019.

Such a pragmatic transitional deal would allow the time needed to deliver a world-class free trade deal, data flows framework and customs agreement, and give businesses the space they need to prepare for a post-Brexit world.

Finally, while trade-offs will undoubtedly be necessary during the negotiations, it is crucial that the final deal reflects the interconnectedness of businesses across different sectors.

Tech increasingly underpins every aspect of business and securing a positive outcome for tech on issues such as the free flow of data will be vital for the future of our entire economy. That’s why getting a good deal for the UK must mean getting a good deal for tech. 

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