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The UK’s tech sector has been rightly lauded as a success story both domestically and globally – growing twice as fast as the rest of the UK economy and commanding the highest levels of investment across Europe. A no-deal Brexit threatens this.
At the end of 2018, before Theresa May’s negotiated Withdrawal Agreement was first put before Parliament, TechUK surveyed its members on Brexit.
That study revealed that 69% of respondents thought that a no-deal Brexit would have a “fairly negative” or “very negative” impact on their businesses. Nine months on, that position remains unchanged despite the fact that companies have increased their preparedness for no deal.
Although our members asked us to make clear their preference for remaining in the EU ahead of the referendum, TechUK has always respected the outcome of that vote. We have consistently called for a deal with the EU that gives businesses the certainty of a transition period and the ability to secure the necessary agreements with the EU to ensure that businesses can continue to trade and service clients across borders.
As the clock continues to click down to the Halloween deadline, TechUK hopes the government will make a genuine and strenuous effort to secure a deal with the EU that can command a majority in Parliament when it returns for the new session.
In the nine months since we last surveyed our members, many of those we spoke to have increased their preparations for a no-deal exit. This is particularly true of larger members completing the survey, of which almost 90% said they felt very or fairly prepared.
But just because companies have battened down the hatches it does not mean they think they will get through a no-deal Brexit unscathed. No-deal preparation is an exercise in damage limitation, not mitigation.
The picture is more worrying for small business. Fewer than half of the businesses we surveyed with 50 employees or fewer felt they were prepared for Brexit. In fact, many of those companies have taken no active steps to prepare for a no deal, citing the inability to predict the impact, uncertainty about what steps to take, or a lack of resources as the main reasons for not acting.
The UK’s tech sector is resilient. We are and will continue to be a hub for innovation, talent and investment. A place where people with great ideas can turn them into great businesses that create highly skilled and highly paid jobs. But the current situation of continued uncertainty is holding back investment and innovation.
If we leave without a deal on 31 October, we will be back at the negotiating table the next day to start talks on a free-trade agreement, but without a withdrawal agreement to build on. This will further extend uncertainty and shake confidence not just in our sector but across the economy.
So, we call on the Prime Minister to focus his energies on striking a deal so that we can get back to the job of building a world-class digital economy.
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