UK tech firms favour second referendum as next move in Brexit stalemate

A second referendum on the UK’s membership of the European Union (EU) is by far the preferred next step for UK tech firms, with over half calling for another plebiscite, a survey has found.

Some 51% told TechUK a second referendum would be their first choice in what should happen next. The next highest ranked option was extending Article 50, with 16% naming this as their first choice.

The survey revealed that 11% of the 276 UK tech firms questioned by TechUK would prefer a no-deal outcome and 2% wanted a general election.

TechUK also rejected a Canada-style free trade deal as an option because it wants alignment with the EU for the free flow of data, regulation and the availability of talent.

The survey also revealed a serious lack of preparedness for a no-deal Brexit. A huge 84% of respondents said they believed the UK overall was unprepared for such a scenario.

TechUK’s research revealed that most large tech firms (with over 250 staff) have made some no-deal preparations, but 65% of small firms (with fewer than 50 staff) and 46% of mid-sized businesses (with between 50 and 249 staff) have taken no active steps to prepare for a no-deal outcome. Uncertainty is to blame for this, with 49% unable to predict what impact a no-deal would have and 37% unsure what steps to take.

The survey also found that the majority of TechUK members want a close relationship with the EU after Brexit, with six in 10 respondents (59%) supporting closer alignment with the EU.

TechUK CEO Julian David said the UK was now at risk of a no-deal by default unless the political deadlock could be broken.

“Parliament has rejected the Withdrawal Agreement, and now needs to find a workable way forward to break the deadlock. All alternative options now need to be considered, including putting the question back to the public”

“TechUK has consistently warned of the dire risks of a disorderly exit from the EU. The Withdrawal Agreement would have provided a workable route forward, but this has been overwhelmingly rejected by Parliament,” he said.

David added that small and mid-sized members, in particular, did not have the resources or information needed to effectively prepare for a no-deal Brexit.

“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,” he said. “We believe a simple Canada-style free trade agreement would not be an acceptable outcome for most of TechUK’s members.”

David called on politicians to find a way of breaking the impasse. “Parliament has rejected the Withdrawal Agreement, and now needs to find a workable way forward to break the deadlock. All alternative options now need to be considered, including putting the question back to the public.”

The UK tech industry is rightly concerned about the future. Recently released figures from London & Partners and PitchBook revealed that, for the first time, tech investment fell in London and the UK. In London, it plummeted from £2.53bn in 2017 to £1.8bn in 2018, and UK-wide during the same period it fell from £3.12bn to £2.49bn.