Government mobilises to persuade tech sector to endorse May-EU deal

Culture secretary Jeremy Wright has said the prime minister’s Brexit deal with the European Union (EU) will give the UK’s digital sector “the certainty it needs to continue to thrive”, as Theresa May attempts to convince the tech sector to back her EU withdrawal agreement.

The Department for Digital, Culture, Media and Sport (DCMS) said the EU has agreed with the UK to “develop a future partnership” that will “facilitate e-commerce and its growth; reduce unjustified barriers to digital trade in order to drive competitiveness; enable data to continue to flow freely; and drive innovation through the exchanging of information, experience and best practice on emerging technologies in the future”.

DCMS secretary of state Wright declared: “Our message to the UK’s world-leading digital and tech businesses is clear. We have secured the best deal possible to protect our businesses and make sure our personal data is processed safely and securely. The deal will help support our talented tech innovators and future emerging technologies such as artificial intelligence, while addressing unjustified barriers to digital trade.

“Businesses big and small, and in every sector of the economy – from video games makers to hotel and travel companies, mail order firms to manufacturers – want certainty. We now need to back the prime minister and get the job done.”

Gerard Grech, chief executive of Tech Nation, a part-government-funded agency whose role is to advocate for technology entrepreneurs, welcomed the DCMS statement.

“The UK is Europe’s leading tech hub and is growing fast. We need to keep building on that momentum,” he said. “The current deal is pragmatic and creates an element of certainty going forward. And the digital tech sector, which is both resourceful and entrepreneurial, will continue to thrive and build fresh opportunities in a post-Brexit world.”

“Our message to the UK’s world-leading digital and tech businesses is clear. We need to back the prime minister and get the job done”

The government said what it defines as the “digital and tech industries” employ more than 2.1 million people in the UK and generate £130bn in revenue. Its statement is intended to reassure those workers that, taken together, the UK withdrawal agreement of 14 November and the “future relationship” political declaration of 22 November 2018 will ensure a free flow of data between the UK and the EU, and “protect against barriers to trade and create an open, safe and secure online environment”.

The draft EU withdrawal agreement caused rifts in the technology sector when first published, with some calling for a People’s Vote with the option to remain in the EU, and others wanting MPs to back the agreement, judging it to be better than a no-deal scenario.

Julian David, CEO of IT suppliers lobby organisation TechUK, said at the time that the agreement was “the only solution on the table that can deliver on the outcome of the 2016 referendum while also securing jobs and investment in UK tech”.

By contrast, TechCrunch editor Mike Butcher took to Twitter to highlight that the tech industry he knows does not support the withdrawal agreement. As part of his response to the TechUK comments, he launched a campaign calling for the tech industry to sign a letter supporting a People’s Vote, with the option to remain in the EU.

The DCMS statement said: “The government estimates three-quarters of the UK’s service exports to the EU rely on data flows, so it is absolutely essential they continue unhindered post Brexit.”

In relation to personal data, it is said the UK and the EU have agreed to “put in place arrangements on [it] so that it is protected and can be processed safely and securely. This will mean that once the implementation period is over, we can continue to reap the economic benefits that come from the free flow of data”.

The “implementation period” is due to come to an end on 31 December 2020, but might be extended by a few months.

The DCMS statement referred to new “specific arrangements [to] cover a wide range of areas including e-commerce, telecoms and emerging technologies… The deal will guarantee open and liberalised telecoms markets and prevent anti-competitive practices, including from major suppliers. These arrangements will give both consumers and businesses access to the digital infrastructure they rely on to operate across the world”.

The statement included a statistic also mentioned by Dominic Raab, the former secretary of state, for exiting the European Union, at a Tech Nation gathering in London on 7 November: “In 2017, UK companies attracted more than £6bn in venture capital investment – more than France, Germany and Sweden combined.”