Digital entrepreneurs warn tech industry will be worse off after Brexit

Martha Lane-Fox speaking at the Huxley Summit in 2016. Photograph: Frantzesco Kangaris/PA.

Martha Lane-Fox speaking at the Huxley Summit in 2016. Photograph: Frantzesco Kangaris/PA.

PA Archive/PA Images

Britain’s tech industry has warned it will be be left worse off under the government’s Brexit plans.

Digital and tech companies play a big part in the UK’s services sector, which makes up about 80% of the British economy and trades over £400 billion each year.

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The tech sector in Britain has exploded in recent years, as the industry is growing over twice as fast as the overall economy, with entrepreneurs crediting the sector’s unfettered access and deep integration with the EU’s single market.

But in a new letter delivered to 10 Downing Street and signed by more than 2,300 entrepreneurs they warn that under the government’s plans for Brexit, the industry will be hit through a drastic reduction in market access and the difficulty to attract new talent and investment from outside the UK.

Brent Hoberman and Martha Lane Fox from lastminute.com in January 2000. Photograph: Sean Dempsey.Brent Hoberman and Martha Lane Fox from lastminute.com in January 2000. Photograph: Sean Dempsey.

The government’s own analysis of its Brexit deal found that the economic output of the services industry would suffer by 2% as a result.

Leading voices from the industry are now calling for a People’s Vote as the “only genuinely democratic way to resolve this crisis.”

They include senior figures at big brands such as Deliveroo, creators of some of the world’s most successful video games including Dan Gray (Monument Valley) and Peter Molyneux (Fable), and organisations at the top of the video game industry including King, Riot Games and Yogscast.

Baroness Martha Lane-Fox, co-founder of Lastminute.com, said: “The tech and digital industry is one of the UK’s fastest growing and most international sectors. It relies upon the free flow of ideas, people and capital and can only be hurt by the inward looking Brexit which is being proposed by Theresa May.

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“To suggest that in some way digital industries, simply because they seem on the face of things to operate across traditional, physical borders, will not be impacted by this deal is to totally misunderstand the extent to which they are integrated with the rest of the physical economy.

“Digital is an enabler to everything we do, it supports car makers and designers, agriculture and tourism, science and research and development. If those industries and the economy as a whole is held back by this bad Brexit deal then don’t expect the digital sector to just ride to the rescue.”

Dinesh Dhamija, founder of online travel agency Ebookers, said: “For the digital sector, the government’s Brexit ‘deal’ is not really a deal at all – it leaves all the big questions unanswered and offers no guarantees about what access UK tech companies will have in future to the vital EU market.

“Many tech companies will struggle to find and recruit the right staff if, as the government has suggested, they lose easy access to EU staff from ending freedom of movement. Many companies in our currently thriving digital sector wouldn’t survive.

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“The Brexit being delivered is a million miles from the one that was offered in 2016, especially for companies in the digital sector. That’s why more and more tech workers and employers are supporting a People’s Vote on Brexit, so the people can have the final say.”

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