TechUK faces backlash for its support of Theresa May’s Brexit Withdrawal Agreement

TechUK - the industry lobby group that claims to represent 950 tech companies from across the UK, and approximately half of those employed by the tech industry - has come under fire for releasing a statement of support for the Prime Minister’s doomed Brexit Withdrawal Agreement.

The industry body has urged MPs to support the deal during the meaningful vote when it passes through Parliament in the coming weeks, claiming that it is the “only solution on the table”.

However, industry heavyweight Mike Butcher, and TechCruch’s Editor-at-large, publicly criticised the response from techUK on Twitter and has launched a counter campaign calling on the tech industry to sign a letter (see letter here, with hundreds of signatures) in support of a ‘People’s Vote’, with the option to remain in the EU.

For those unaware, it has been a week of high drama in Westminster, with Prime Minister Theresa May finally securing a deal with the EU on the terms of Britain’s Withdrawal from the trading bloc. However, despite initially receiving agreement from her Cabinet, a number of senior Ministers, including Brexit Secretary Dominic Raab, then resigned claiming that they could not support the deal on the table.

The primary criticism is that the UK - including Northern Ireland - will remain part of a ‘backstop agreement’, which effectively means the whole of the UK staying in the customs agreement with the EU, until both sides find a way out of it. The worry is that the UK will indefinitely be tied to EU rules and regulations, without a seat at the table. No politician has yet come forward with a solution for how to exit the backstop agreement.

Because of this, a big chunk of Theresa May’s party, and the opposition, will vote against the deal when it passes through Parliament - meaning we likely end up with a ‘no deal’ situation (or possibly a General Election, or a call for a new referendum).

Mike Butcher is arguing that because the current deal is effectively dead in the water - techUK is putting its weight behind something that is meaningless and instead should be using the tech industry’s weight to push for a new referendum with the option to remain in the EU.

It is understood that the letter Butcher has created has been signed by hundreds already, including a number of industry heavyweights that have sway in government.

Obviously, there is no guarantee that a new referendum will reverse the decision made during the EU referendum in 2016. However, if we are likely to end up in a no-deal scenario anyway - because MPs will likely vote this deal down - then it’s the best shot for the tech industry to retain the benefits it receives now as being a member of the EU.

We at diginomica/government have long been covering the tech industry’s concerns surrounding Brexit - with the EU being a major trading partner, data flows being a major concern after we exit, as well as the tech industry in the UK getting access to talent from the trading bloc.

What has been said?

Let’s start with what techUK has actually said in support of the deal. Shortly after the Withdrawal Agreement was published, techUK released a statement urging MPs to support it. CEO Julian David said:

“techUK believes that the Withdrawal Agreement that has been negotiated is the only solution on the table that can deliver on the outcome of the 2016 referendum whilst also securing jobs and investment in UK tech. We therefore believe that Members of Parliament should support the agreement in the ‘meaningful vote’.

“The proposed agreement would avoid the very dangerous consequences of no deal and provides a basis on which to secure a comprehensive deal on the UK’s future relationship during the implementation period. techUK particularly welcomes the clear statement of intent to secure the free flow of personal data between the UK and the EU. This issue is critical to the tech sector and to every other industry in a modern digitising economy.

“Failing to confirm Parliamentary agreement risks creating even more uncertainty for tech businesses, their staff and their customers. As a sector responsible for over a million jobs, and the fastest growing part of the UK economy, we recognise that a No Deal would directly impact the ability of tech companies to trade, move data and secure talent. It would disrupt supply chains and undermine the UK’s capability for world leading science and research. It would hit investment and lead to job losses. We believe small and medium sized businesses would be worst affected in the case of no deal.”

David added that whilst he doesn’t believe that the Withdrawal Agreement is “perfect”, he does believe that it offers a vastly better alternative to a “chaotic No Deal exit from the EU”.

After the statement was released, Butcher took to Twitter to say:

David responded to Butcher’s tweet saying, again, that whilst he agrees that the deal has flaws, the role of techUK is to protect members’ businesses and the “100s of thousands of jobs they provide up and down the UK”.

Butcher responded by saying that techUK’s role as a tech industry body is to “argue forcefully for the *best option* for tech business”.

A counter campaign

Following the exchange, Butcher then published a letter that will be sent to MPs, which already includes hundreds of tech industry signatories and has received strong support on social media.

Among those voicing their support are Martha Lane Fox, founder of Lastminute.com, and Stephen Foreshew-Cain, previous director of the Government Digital Service. However, a quick scan at Twitter and it’s clear to see plenty of people in the industry are urging more to sign up to the new campaign.

The letter itself (which you can sign here) states:

“We, the signatories of this letter, represent businesses from across the British Technology industry and are writing to express our concerns over Brexit.

“It is our view that the government’s "Withdrawal Agreement and Political Agreement on leaving the European Union” will not serve the best interests of the UK tech industry. It will vastly increase friction in trade with the EU and impose significant and costly changes for the tech industry.

“We therefore believe that Members of Parliament should NOT support the agreement in the ‘meaningful vote’ and should instead vote for a new referendum, a ‘People’s Vote’, on Brexit, with the option to Remain in the EU.”

It goes on to add:

“Brexit is a dire threat to the UK tech industry. Leaving the EU’s customs union, single market, Digital Single Market, VAT area and regulatory framework (in whole or part) will tear apart the bedrock on which our industry operates and cause us grave harm.

“Brexit is already causing serious uncertainty, raising costs and threatening future red tape. Post-Brexit our products and companies face the real risk of becoming hard to create, fund and distribute globally, especially in the vast market of the EU. Anecdotally, we know many of the innovative startups of the future are looking to other EU cities to relocate to, or simply bypassing the UK altogether.

“With Brexit, we foresee greater problems to hiring talent (risking, over time, a UK brain drain), as well as the 'founders of the future’ simply not arriving in the first place.”

Response

TechUK CEO Julian David has this morning responded to Butcher’s letter and has set out the lobby group’s position. We are publishing his response in full:

“I have been asked a number of questions on Twitter following the statement @techuk released yesterday supporting the proposed withdrawal agreement.  Here are my answers.

“techUK is a business organisation that represents companies rather than individuals that work in the technology sector. We speak on behalf of those members – hundreds of companies large and small employing hundreds of thousands of people across the UK. Companies that are faced with taking hard business decisions as we approach the deadline for the UK to leave the EU.

“Digital tech companies number many thousands in UK. They are not all techUK members so clearly we do not represent everybody in tech but, given the spread of our members from chip design and electronics, satellite and telecoms through to health tech and AI solutions providers, we have a very broad base.

“We work with our members on a daily basis and our positions are developed through a system of groups and committees, including a Brexit policy group that is open to all members. Major decisions such as techUK’s approach to Brexit are agreed at Board level.

“In the run-up to the EU Referendum, we surveyed our members and found a very clear majority for remain. We published that data and ensured that the media and campaigning groups were fully informed of our position. Clearly, the Referendum did not go the way techUK member companies hoped, however, at no time since the Referendum have our members called for us to campaign for a new vote.  Instead, their direction was to respect the fact of the referendum and work within the political process to ensure that the agreements negotiated with the remaining members of the EU support their ability to invest in the UK and continue to trade successfully.  We have never taken the view that leaving the EU was preferable to remaining a member but we have engaged in the political process to try and mitigate the impact of Brexit on the ability of tech firms to do business. We have published many detailed proposals to address the complicated and important issues that must be resolved particularly relating to data, skills, customs and regulatory alignment.  Many of our proposals have been reflected in government policy.

“One of the biggest issues that face our member companies, their employees, customers and partners is the uncertainty provoked by the withdrawal process.  This has serious business implications for investment and planning but also human consequences for the people working in member businesses.

“We have been very clear that No Deal is a potential catastrophe for member businesses and resolving uncertainty is paramount given that there are only 130 or so days to go. Therefore, in consultation with our members we made a very clear decision to support the proposed withdrawal agreement which can resolve the uncertainty and avoids the risk of a no deal disaster.

“We recognise the agreement is not perfect and it is also not in itself a future trade agreement with the EU but it does contain a number of positions and proposals that can build to one.  It is also the only proposal that is currently on the table.

“We have said that if that changes then we will in consultation with our members determine what is the best position for us to take to continue to support jobs and investment in digital technology businesses in the UK.”

My take

Which side of history do you want to be on, techUK?