Tech firms reject no-deal Brexit and pivot towards ‘people’s vote’

An image of a businessman casting a vote in a referendum on EU membership

The tech industry is divided on the Brexit issue with most firms supporting a second referendum on membership of the European Union (EU), according to a poll of techUK members.

Just one in ten companies surveyed support a no-deal outcome to Brexit negotiations, while just over half, 51%, have thrown their hat in for a 'people's vote' that could potentially reverse the 2016 result.

Moreover, an overwhelming majority of businesses, 84%, say the UK is unprepared for a no-deal Brexit, against just 12% who feel the UK can withstand the outcome, according to the poll commissioned by techUK, and conducted by Ipsos MORI.

Most tech companies, 69%, also feel a no-deal Brexit will negatively affect their businesses, against 5% who feel it would have a positive impact and 16% who believe it would make no difference at all.

Interestingly, SMBs were far less likely to sit on the fence than their larger counterparts, with smaller firms more likely to back both a second referendum, as well as no deal.

Although 54% of SMBs supported a 'people's vote' this was true for a lesser 44% of large companies, while just 2% of enterprises backed calls for the government to prepare for a no-deal outcome against 15% of SMBs.

The survey of 276 tech firms of varying sizes, of 773 tech UK members approached, was conducted in December 2018 ahead of the scheduled 'meaningful vote' in parliament.

When presented with an AV-style question seeking firms' alternative preferences should their first choice be denied, their most desired overall outcome was for the government to delay Article 50 and re-enter negotiations, 64%, followed by a second referendum, 63%.

The poll also suggested that while most larger firms, of 250 or more staff, had taken steps to mitigate the effects of a no-deal Brexit, SMBs were generally unprepared for this outcome, including 65% of small businesses and 46% of medium-sized firms.

Asked why no steps had yet been taken, many of these businesses, 49%, suggested it was because they couldn't predict the prospective impact, while 37% were unsure what steps they should take in the first place.

Deal or no deal

"The Withdrawal Agreement would have provided a workable route forward, but this has been overwhelmingly rejected by Parliament. The UK now risks no deal by default unless the deadlock can be broken," said techUK's CEO Julian David.

TechUK, which comprises more than 950 members, previously called for its constituent companies and the wider industry to back the prime minister Theresa May's agreement with the EU struck last year. But the agreement was decisively shot down in the Houses of Parliament last week, with MPs across all parties divided on where to go next.

"Our polling suggests that many of our small and mid-sized members, in particular, do not have the resources or information needed to effectively prepare for no deal," he continued.

"They want a deal that works and a future relationship that retains a high level of alignment and access to the EU market on issues that matter to the sector, such as the free flow of data, regulation and the availability of talent.

"We believe a simple 'Canada-style' free trade agreement would not be an acceptable outcome for most of techUK's members."

Rising disruption and risks to security

The views expressed in this survey joins a chorus of voices from a cross-section of the industry who have warned about the scale of disruption that a no-deal Brexit can inflict if safeguards aren't put into place.

No deal could, for instance, lead to higher data roaming charges, with companies free from rules that regulate how much they can charge for access to 4G, according to the vice president for mobility at telecoms firm BICS Mikal Schachne.

Sonatype's vice president for international Wai Man Yau, meanwhile, said the EU has been the driving force for some of the most crucial pieces of digital legislation, such as the General Data Protection Regulation (GDPR), and that the UK risks being left behind.

"No government would want to risk the security of businesses and citizens," he said, "and so both the UK and the EU nations have a vested interest in working together to boost cyber security levels.

"However, with the UK experiencing a substantial cyber skills gap that's set to increase in coming years, Brexit could make it difficult for British businesses to hire the right talent.

"At the moment, British companies are easily able to build multinational workforces to make up for a shortfall. If regulations change, and it becomes harder to recruit workers, the UK could start to lag behind other nations in terms of cyber security capabilities."

But the most alarming projection, from Netscout's CTO Darren Anstee, was that Brexit could fuel a rise in cyber attacks against both UK and EU organisations.

"Recent years have seen significant political turbulence, from the rise of populist politicians to the shock Brexit vote," he said. "With political and ideological disputes representing the third greatest motivation for launching DDoS attacks, such a landscape has provided a fertile ground for attackers.

"With Brexit pending, we're likely to see any geopolitical or ideological disputes echoed in cyber space. This could be in the form of attacks against EU institutions, the UK cabinet office, political parties or media outlets."

Keumars Afifi-Sabet

Keumars Afifi-Sabet is a writer and editor that specialises in public sector, cyber security, and cloud computing. He first joined ITPro as a staff writer in April 2018 and eventually became its Features Editor. Although a regular contributor to other tech sites in the past, these days you will find Keumars on LiveScience, where he runs its Technology section.