More like this

Business

Arrow

The Channel

Tech biz bosses tell El Reg a Brexit will lead to a UK Techxit

If we vote to leave the EU we'll all become poor and unemployed, allegedly

Analysis Immigration is one of the main concerns for advocates of Brexit. Some IT firms from Britain and abroad who we spoke to share this concern – but in the other direction.

One UK tech firm has told The Register it could be forced to leave the country if Britain votes to leave the European Union on June 23 – a Techxit, if you will.

Others reckon leaving the common labour market would slow their ability to move rapidly against rivals and to bring on talent in a competitive field.

The reason? The end to freedom of movement that being a member state of the EU has provided.

Currently, any EU citizen can live and work in the UK on the same terms as a Briton with minimal bureaucracy, under the EU’s freedom of movement rules. The same applies to Britons, who can live and work anywhere in the EU. This means British tech employers can draw on a population of 508 million people, rather than 65 million in the UK alone.

Social marketing startup Buyapowa’s chief executive Gideon Lask told The Register that in the event of a vote for Brexit: “I think we’d be forced to go.”

“If I was limited in the people I could bring into the business, yes, we’d have to seriously consider where our home was,” Lask told us.

Founded in 2011, Buyapowa’s customers include Tesco, Costco and Debenhams and the company has raised $7.6m in venture funding. It has offices in London, Paris and New York.

Lask says that more than half of his London-based technology team are from EU countries other than Britain, a group he also relies on to speak eight different languages. “The free movement of people enables that to happen,” he says. “I may lose the core of my team.”

Lask’s scepticism is echoed by the chief executive of Comtek Network Systems, Askar Sheibani.

Sheibani told us it takes a year to bring in a software engineer from India to the firm’s base in north Wales – “the bureaucracy involved is enormous” – but just four weeks to recruit one from Italy. EU freedom of movement also allows the company to move staff between its Welsh offices and those in Germany and Holland to cope with demand: “That makes things much smoother for us.”

Would there be any advantages to tech businesses from leaving the EU? “No,” says Lask. “There will be no benefit at all, zilch benefit, especially in Wales.” adds Comtek's Sheibani. “Politicians are playing on people’s emotions, predominately on immigration.”

Some argue Prime Minister David Cameron has fatally bungled his reform negotiations by focussing too much on welfare payments to those out of work at the expense of bigger issues, such as the Common Agricultural Policy (CAP).

But they don't all want the status quo

Adam Hale, chief executive of cloud HR software business Fairsail, is a reluctant supporter of Brexit.

“If the reforms had been, in my view, meaningful at all then I might well be in favour of staying in. However, I think they’ve been essentially meaningless,” he says of the changes negotiated by David Cameron, adding he is speaking for himself rather than his company.

Hale adds that the prime minister should have focused on cutting big costs such as the Common Agricultural Policy, and making the EU more efficient: “He didn’t ask for nearly enough.”

Yet, with a technology staff from EU nations including France, Poland and Portugal, Hale is enthusiastic about skilled migration to the UK. He says there are far too few home-grown computer experts and he is actually angry that one of Cameron’s reform aims sought to reduce EU immigration by reducing access to benefits.

“If you turn off the taps of migration, you’re killing the tech businesses in the UK,” he says. “The only thing we tried to bloody reform is to cut down the number of migrants – that’s the stupidest thing ever.”

Such firms are not alone in their views. Chris Kennedy, chief financial officer of ARM, whose chip architectures help power millions of Apple phones and tables, is reported to have expressed his concerns about the effect of Brexit could have on his firm’s success. Again, the problem is labour.

"Our main concern is the ability to attract talent and be able to get the necessary papers for them to work in the UK in the event of Brexit," he said recently. “It would slow us down."

A survey of SME lobby group TechUK's members from July 2016 found that 71 per cent want to stay in a reformed EU, with 78 per cent believing exit would leave the UK with less influence on issues concerning their business. The main reforms they hoped for were a more open and competitive single market, including in digital services, and improved processes for reducing regulation.

ICM surveyed a sample of TechUK 202 member companies of various sizes. Seventy one per cent were SME and 29 per cent defined as "large."

Sponsored: The world has changed, has your IAM strategy?