back to article Tech firms reel from Leave's Brexit win

Tech firms are reeling at British voters’ decision to leave the single European market. Firms are rattled as Gartner has forecast that Britain’s tech buyers will now stop spending in 2016 and 2017, turning earlier growth numbers negative. Also of concern, hiring of EU workers, uncertainty over VAT levels and possible new …

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        1. Lotaresco

          Re: FFS Calm Down Kids!

          That's Norway that didn't waste its natural resources but invested in a fund that backs every Norwegian citizen with a cash surplus. I take it you also refer to the Switzerland that took all the Nazi gold, invested in banking and money laundering and developed some impressively profitable (and impressively corrupt) pharmaceutical, chemical and engineering businesses.

          Perhaps you could indicate what equivalent the UK has?

          BTW, having lived and worked in Switzerland, I know about the social problems they suffer. You may care to check their stats on suicide and substance abuse. The area around Neuchatel was (and may still be) and area where heroin addiction and all the consequent social problems was rife. Seeing the place on a skiing holiday doesn't expose you to all of Switzerland. It has a significant dark side.

        2. Yet Another Anonymous coward Silver badge

          Re: FFS Calm Down Kids!

          We sell in Switzerland, they accept CE and Eu accreditation. We don't even need to register with the Swiss authorities and our German salesforce can work there freely.

          But they didn't just vote to have nothing to do with the rest of Europe.

          Can you guarantee what the UK medical device rules are going to be in 5years ?

          1. Anonymous Coward
            Anonymous Coward

            Re: FFS Calm Down Kids!

            I think UK has two options re med regs. Invent its own or adopt ones based on the ICH harmonization which is being largely agreed between EU and US at moment.

            No bonfire of regulations there.

            1. Yet Another Anonymous coward Silver badge

              Re: FFS Calm Down Kids!

              The problem is the cost and delay while they don't decide.

              We had almost a years delay on selling a system because the US didn't adopt ISO-some-long-number::2014 but stuck to ISO-some-long-number::2012 while the component supplier moved to the new one. There is no difference (that I have been able to find) but you can't sell a medical device that doesn't meet the correct one.

              Having staff sitting around for a year while the UK goes through 1000s of regs and decides what to accept and then there are legal and procedural challenges that decide what effect each of these has on 1000s of other docs. This might not be a big deal for Siemens or Philips but would sink us.

              1. Doctor Syntax Silver badge

                Re: FFS Calm Down Kids!

                "We had almost a years delay on selling a system because the US didn't adopt ISO-some-long-number::2014 but stuck to ISO-some-long-number::2012 while the component supplier moved to the new one."

                I thought you said the problem was with the UK, not the US. And if you don't have the ISO numbers at your fingertips do you expect us to believe that you're really your company's strategist when it comes to regulations?

                In the meantime, it's no change so if you want to sell stuff here under the current EU regs you can do so. If potential customers can put up with the whining.

          2. Rainer

            Re: FFS Calm Down Kids!

            > But they didn't just vote to have nothing to do with the rest of Europe.

            There was a public vote (1992, IIRC), to NOT join the EU.

            The Swiss parliament has recently officially retracted the membership application from back then (it was "on hold", for 24 years...).

            Switzerland has negotiated a large number of bilateral treaties with EU and member-states to facilitate easier trade and free flow of people (and unlike the UK, is a member of Schengen).

            However, recently a public vote asked the government to limit immigration (which is actually not possible with current EU treaties) - among over reasons because it's a relatively small country and the actual habitable area is even smaller.

            I do live there, since 11 years actually and as such I'm an immigrant.

            But I do believe that a country - any country - must have some sort of control about who it's going to let inside. "Nobody" and "everybody" are clearly two completely unsustainable extremes.

        3. Anonymous Coward
          Anonymous Coward

          Re: FFS Calm Down Kids!

          Seems France and Italy handily outrank Norway and Switzerland for good healthcare though huh?

        4. Richard 12 Silver badge

          Re: FFS Calm Down Kids!

          Boltar:

          Norway and Switzerland both obey everything the EU imposes blindly and without discussion.

          If you think that is in any way better then I have a bridge for sale.

      1. Anonymous Coward
        Anonymous Coward

        Re: FFS Calm Down Kids!

        "We sell advanced medical equipment from the other side of the pond."

        I work for a British Company that also sells "advanced medical equipment" and we need to ensure our equipment conforms to the rules of whichever country/trading block we are selling to, whether it is the EU, the USA, Canada or Korea etc etc

        We are a small company (less than 50 employees) with a relatively small turnover, yet it isn't a significant burden for us, so what's your excuse?

        I voted remain (and from comments at work so did everyone else there) and this is of concern for us, but it will NOT stop us from trading with the EU or anywhere else.

  1. Anonymous Coward
    Anonymous Coward

    Assumptions, assumptions...

    In general, for the IT industry this is not good - the question is how it unfolds and how the industry can recover its position."

    So it is not good, but also remains to be seen how things unfold. But if it's not clear how things unfold then how can you already conclude that it's not good?

    I'm getting a little tired of all the negative propaganda. "It's not good at all, but we don't know what's going to happen". Yeah, and if the economy does veer up and becomes stronger again, then what are those guys going to say?

    I'm not claiming that it is going to be great (I simply don't know, even though I personally believe that it's going to be) but what's with all the negativity? Sore losers perhaps?

    1. keithpeter Silver badge
      Windows

      Re: Assumptions, assumptions...

      @ShelLuser

      For many businesses, the 'not good' evaluation would simply reflect the uncertainty. The OA goes on to mention a planning cycle.

      I'd imagine those managing civil engineering projects of any size are also wondering how to get all this on the Gantt chart.

      1. Matt Bryant Silver badge
        Meh

        Re: keithpeter Re: Assumptions, assumptions...

        "....wondering how to get all this on the Gantt chart." Amusing as it is to imagine many a PHB scratching their heads at the possible impacts, the majority of manglement I have dealt with seem to have a hard time planning further than their next lunch! The reality is, even if Article 50 was enacted today, there would be a full two years minimum that the UK would still be tied to running with existing EU regs, so for most projects it will be zero actual change or impact involved. The fun bit is any new EU regs that get brought in during the negotiation period after the Article 50 announcement, which Brussels may want to force on the UK as part of the negotiations.

        1. Anonymous Coward
          Anonymous Coward

          Re: keithpeter Assumptions, assumptions...

          Article 50 reads to me as two years maximum.

          "The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period."

          And EU regulations are enacted into British law. With UK detached from EU law i understand those enactments could suddenly find themselves challengeable to their legal standing.

          1. aregross

            Re: keithpeter Assumptions, assumptions...

            "...attempt to disentangle themselves from the United Kingdom."

            Problem Number 1, it seems.

          2. Doctor Syntax Silver badge

            Re: keithpeter Assumptions, assumptions...

            "And EU regulations are enacted into British law. With UK detached from EU law i understand those enactments could suddenly find themselves challengeable to their legal standing."

            A little task for Team Leave to sort out. Maybe IDS could take a look at it. He did so well with Universal Credit...

          3. Anonymous Coward
            Anonymous Coward

            Re: keithpeter Assumptions, assumptions...

            My goodness, I'm so glad we have a real expert on UK and EU law to tell us about Article 50.

            1. Matt Bryant Silver badge
              Boffin

              Re: AC Re: keithpeter Assumptions, assumptions...

              "....UK and EU law to tell us about Article 50." Well, that's where it gets interesting!

              The current economic uncertainty affects all the EU, which is why Junker and Hollande are screaming that the UK must enact Article 50 (the "leaving" mechanism in the Treaty On European Union, aka TEU) at once and get negotiations going. There is nothing in the TEU that allows the EU to force the UK to submit an Article 50 request, so they are just sprouting hot air and should really shut up and read their own treaty (http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-european-union-and-comments/title-6-final-provisions/137-article-50.html). The UK is set for a period of uncertainty regardless, so drawing out the period before submitting the Article 50 request is probably in the UK's interest as it turns the screws on Junker and co. The referendum puts the onus on the UK to make an Article 50 declaration, but the timetable for that is the UK's to pick and choose, not the rest of the EU. If we wanted, we could go another fifty years before making our Article 50 request and all the EU could do is whine.

              At worst, the rest of the EU could try to eject the UK through Article 7 of the TEU, which allows for suspension of a member state. Article 7 is intended to be used against countries subverting common democratic principles, so the idea of trying to suspend a country for following a democratic referendum and an EU treaty Article would be a hard one to get through even the biased EU system!

              Until the UK does submit the Article 50 request it is a fully-paid up member of the EU, which means the way that it has been excluded from EU meetings in the last week is actually against the EU's own rules. Not until the Article 50 notice is made can the UK be excluded from the EU Council or any other EU decision.

              Even after the Article 50 notice goes in, the UK has a period of maximum two years to negotiate the unbinding of EU laws and treaties unless the negotiating country and the EU Council agree an extension to negotiations. Going back to the uncertainty, it is again in the UK's interest to turn the screws by dragging out the negotiations for as long as possible to get the best deal for the UK. In the meantime, EU laws still apply and trade is unaffected.

              So, the UK is quite entitled to take its time and do things carefully, especially as two years will be a very short period to push through the number of new laws that will have to be enacted to replace some existing EU ones (many can simply be replaced with old laws still on the books, but some, such as tech laws, have evolved a long way since we joined the EU). But the important one is that the UK Parliament has to repeal the European Communities Act, something which cannot be done just by Prime Ministerial decree. - the minute that is repealed, existing English (and Scottish) laws come into force, so it is unlikely to be implemented until negotiations have concluded. Until then, EU laws apply, including all the trade, travel and employment bits.

              So, I suspect it will be much closer to two-and-a-half years before the European Communities Act is repealed (six months of Tory leader selection, followed by the Article 50 notice and then two years of negotiations), unless the EUers swallow their pride and come to the table with a good offer right after the Article 50 announcement.

      2. Anonymous Coward
        Anonymous Coward

        Re: Assumptions, assumptions...

        Oh those annoying Gnat charts.

    2. Matt Bryant Silver badge
      Boffin

      Re: ShelLuser Re: Assumptions, assumptions...

      ".....but what's with all the negativity?...." Well, from a purely business perspective, change of any sort introduces costs and requires planning, whereas stability means you can just carry on as you were. The problem for businesses is the Brexit introduces uncertainty, which makes planning even harder and more costly - staying on a sinking ship when you can predict the rate of sink makes for a more predictable business environment (especially when you can kick the can down the road for someone else to deal with) than jumping overboard and swimming to shore (will there be sharks in the water, or cannibals on the beach?). Hence the negativity amongst "business leaders". But, what business leaders want and what the average Joe on the street wants may not align. The problem for those business leaders promoting the predictability of continuing in the EU - basically, following the herd - was that the 2008 recession and the experience with the Greek bailout showed that following the herd off a cliff is sometimes not the smart thing for the average Joe in the street to do.

      1. Nifty Silver badge

        Re: ShelLuser Assumptions, assumptions...

        It's a plain old crisis. Which means a threat and an opportunity. Remember, after the 2008 crash many the best maths boffins went to work on startups in California with some great outcomes. Unintended consequences aren't always bad.

    3. Richard 12 Silver badge

      Re: Assumptions, assumptions...

      "Not good" because nobody knows whether it will be a little bit worse, a lot worse or a complete and total disaster.

      The direction is generally agreed by everyone who examined the evidence, while the magnitude is not.

    4. Anonymous Coward
      Anonymous Coward

      Re: Assumptions, assumptions...

      The issues suffered by the populace will only change with a change in how politics and and business are done. If the public has no visibility and there is no accountability then IT workers along with all others will continue to have a tough time. Social Democracy ie the Scandinavian countries is a step in the right direction, whether one is in the EU or not.

  2. Matt Bryant Silver badge
    Stop

    WTF?

    Someone tell Gav that Remain lost so it's a bit late to be running "Project Fear" pieces.

    As to tech companies relocating, the usual driver is not wages but taxes - if international companies can still have their offices in the UK and pay their tax in Luxembourg or Switzerland then nothing will change. International tech companies treat all the individual EU countries as individual markets and pay their corporate taxes where it's cheapest already. The EU would have to unify their tax system to kill that advantage, something they have shown they cannot do.

    And do you really think the EU countries want all their ex-pats currently working in London to have to come home to their depressed employment markets? Just imagine - an actual British person serving in a London Starbucks instead of a Continental! The reason all those foreigners (many of them being graduates) are working in low-paid jobs in London is because companies did not just prioritise on wages, otherwise the companies would all be based in Athens or Lisbon and those Continental grads would be working in high-paid tech jobs there.

    And despite all the predictable whining from the Fwench and Junker throwing a tantrum (mainly because Junker is terrified the current corporate tax benefits to Luxembourg will get negated by an independent UK), it's still in the EU's interest to not cut off their own noses out of spite. One little memo from the Treasury on the possible tax benefits of an import duty on wine and vehicles - to encourage British wine-making and car manufacturing, naturally - would shut the Fwench up. With the majority of UK exports going outside the EU it is the EU economies that would be burnt worst by a trade war.

    1. ckm5

      Re: WTF?

      Hmm, I've been a executive at a bunch of tech companies and have never, ever heard of any decision being made solely on the basis of taxes, it's not even a topic of discussion. Prime focus is availability of talent, then access to markets & capital. Brexit means loosing access to both a giant talent pool and a giant market. At this point, Amsterdam, Berlin or Dublin would be far better choices for any tech companies and I know a large number of high-profile tech companies are seriously rethinking where to focus their European efforts.

  3. Elmars

    There goes the EU data Safe Harbor business

    This seriously sucks for foreign companies using hosting services in the UK to meet EU data residency requirements. The UK was a great place to park the apps, and came with english language support at no extra charge. Now with the UK out of the EU, it will become much more difficult to explain to continental customers that their data is safe. Before that is the even harder part - explaining this to the sales team - and you can never be sure they don't mess up the message.

    So... no choice but to move. Ireland? Germany? Sigh.

    1. petur
      Facepalm

      Re: There goes the EU data Safe Harbor business

      "So... no choice but to move. Ireland? Germany? Sigh."

      Come to Belgium. We already have Google so it must be good for privacy ?

    2. Matt Bryant Silver badge
      WTF?

      Re: Elmars Re: There goes the EU data Safe Harbor business

      "This seriously sucks for foreign companies using hosting services in the UK to meet EU data residency requirements.... no choice but to move....." Er, why? UK-based companies can still comply with the EU rules, there is no disadvantage there compared to EU-based companies. But, UK-based companies can now take a more flexible approach to non-EU customers, such as the US, whilst EU-based companies cannot. Take the example of a big US healthcare company like McKesson, say they want to build a DR center for US patients' data, and the choices are the UK or France. With the UK post-Brexit they may just have to worry about the existing cost of HIPPA compliance, but if they go to France they have to add the cost and complexity of complying with EU rules as well as HIPPA. So the UK option now has a cost and simplicity advantage as well as a language advantage (oh, and we don't have the French Union problems either).

      1. Anonymous Coward
        Anonymous Coward

        Re: Elmars There goes the EU data Safe Harbor business

        "(oh, and we don't have the French Union problems either)"

        This means you don't have enough citizens willing to stand up for their right to earn a living wage.

        People could work for a bit less if there was single healthcare, including Dental, Optical and Prescription; and free higher education with a stipend for living.

        But who wants to live in a society that works for its citizens.

    3. DropBear

      Re: There goes the EU data Safe Harbor business

      Let's just put it that way - don't expect any new large scale data centre deployments...

  4. Steve 114
    Boffin

    Didn't

    We didn't vote to 'leave the single market'. We voted to leave the 'European Union'. In theory (if not in prospect) there could still be 'free trade' in goods - and there never has been in services anyway. And I haven't heard we're leaving the (very different) 'Council of Europe' and its silly offshoot the ECHR. Pity.

    1. Tomato42
      Facepalm

      Re: Didn't

      you think UK will get access to common market without a deal like Norway? ha! not if French have anything to say about it (psst: they do)

    2. Anonymous Coward
      Anonymous Coward

      Re: Didn't

      Ummm... The silly offshoot, the ECHR? What is it, exactly, that you object to with the ECHR?

      1. Lotaresco
        WTF?

        Re: Didn't

        Ummm... The silly offshoot, the ECHR? What is it, exactly, that you object to with the ECHR?

        Maybe the Legal Entity in question objects to namby-pamby rules that prevent them being tortured and arbitrarily killed by their own government?

    3. anonymous boring coward Silver badge

      Re: Didn't

      "In theory (if not in prospect) there could still be 'free trade' in goods"

      You actually believe that?

      Hope you didn't vote based in that...

      1. Yamal Dodgy Data

        Re: Didn't

        @ anonymous boring coward

        The worst retaliation the EU can throw at Blighty is a 3% tariff in goods permissible under the WTO.

        More than that they risk a trade war, not just with the UK, but with the almost 100 signatories of the WTO.

        Of course there will be an FTA with the EU.

        Are you really expecting Stuka's will start hovering over Dover, because Brits decided to get out ?

        Fortress EU is an economic basket case with a €54,652,083,000,000 ticking derivatives bomb called Deutsche Bank sitting at the centre of it all.

    4. Anonymous Coward
      Anonymous Coward

      Re: Didn't

      "We didn't vote to 'leave the single market'. We voted to leave the 'European Union'"

      Actually virtually all the Leave propaganda assumed that we did leave the Single Market. Staying in it would mean signing up for a whole lot of treaties which would have the effect of imposing most of the EU rules on us with no seat on the Commission, no MEPs and no influence.

      1. Anonymous Coward
        Anonymous Coward

        Re: Didn't

        > Actually virtually all the Leave propaganda assumed that we did leave the Single Market. Staying in it would mean signing up for a whole lot of treaties which would have the effect of imposing most of the EU rules on us with no seat on the Commission, no MEPs and no influence.

        And no rebate. So we would be subject to the same rules, but paying more into the coffers.

      2. Anonymous Coward
        Anonymous Coward

        Re: Didn't

        And then Hannan has now backtracked, implied that EFTA is a possibility, said immigration might go up and stated that at no point did they say there would be no immigration. We've been had...

    5. Paul Shirley

      Re: Didn't

      @Steve 114 you haven't heard it because they haven't told the uk it's leaving. Yet. But we weren't invited to this week's meeting...

  5. Slx

    The huge problem is instability! There's no roadmap.

    Talking to businesses today, the big problem is that there is no roadmap.

    Boris, Nigel and the chaps are going to go over and jolly well give Brussels a good talking to and it will all be fine apparently.

    I have no idea: how long this will take, what kind of trade agreements will emerge, what the situation is with freedom of movement of EU nations in / out, if there are restrictions how will they work, what kind of work permit system will be in place.

    Add to that that Sterling has gone into a period of unprecedented volatility which means that companies will avoid contracting in GBP, opting for predictable currency or waiting for stability instead.

    The UK is presenting the world is something like : "Hey, we're leaving the EU but we can't really be quite sure when and we're working on some trade agreements, except oh actually we're not as nobody's started that yet.. But, tally-ho, this is Great Britain and everything will be fine!"

    Unfortunately, that's not a climate I can do business in.

  6. Anonymous Coward
    Anonymous Coward

    Business, including Banking, are risks. What, ever increasingly, large Corporations have been able to do is buy Politicians and thereby being allowed to write tax law and business treaties like the TTIP. This ameliorates these risks and further institutionalizes their control. All this joining together of Nations is wonderful as an ideal it is the practice and fairness of it that is difficult and since the general political shift to the right, by which I mean far right, that started in the late 1970s we cannot trust that Governments are working in the favour of the citizenry but rather that of the Oligopolies that now appear to rule "First World" nations.

    Democracy is a very delicate state of governance that has been allowed to deteriorate through apathy. People tend to trust their Governments when times are easy like they have been in the First World for last couple of generations. It appears that is changing.

  7. Anonymous Coward
    WTF?

    Oh noes!!!!

    "Tech firms reel from Leave's Brexit win" - It was such a surprise!! I mean they didn't even know there was going to be a vote!!

    Oh come on, who writes this, the tea boy?

  8. Anonymous Coward
    Anonymous Coward

    If you work in British IT you've just dodged a bullet

    Anyone remember the India-European Union Free Trade Agreement (India-EU FTA) ?

    Quote: "will give skilled Indian IT workers, engineers and managers easy passage into Europe "

    Final negotiations resume NEXT MONTH .. the only reason the treaty had been stalled for three years was due to "British recalcitrance", i.e. Theresa May and Cameron's (yes, sometimes he's useful) opposition.

    If anyone has been reading the India media today, you'll know they're livid about the UK not being part of this now.

    Once you've googled up the India-EU FTA, try "Deutche Bank derivatives exposure + EU member taxpayer guarantee"

    .. You'll realise you've also dodged a nuke

  9. DrXym

    All entirely predictable

    Tech companies aren't going to invest any money in the UK when they have no idea what the hell is happening. Same for most industries. They'll just start developing plans to move their centre of operations somewhere else which is part of the EU, e.g. Ireland.

    The UK needs to get some certainty into the situation and fast. e.g. fast track plans to join the European Economic Area. It's still a terrible choice compared to remain (all the rules, none of the influence) but its still better than uncertainty.

  10. Howard Hanek
    Childcatcher

    Reel?

    You must have meant........get real? Tech companies HAVE been reeling....IT in and now they must get real, surely.

  11. BonerNose
    Headmaster

    Say what?

    "...could care less..."

    Grrrrrr.....

  12. Anonymous Coward
    FAIL

    Children

    Why is it that all you remainers who didn't get what you wanted come across so bloody immature, petulant, childish, over-entitled and whiney?

    One of you even wrote here that they were going to have 'a beer and a cry'. Really? Grow up, grow some balls. Britain has voted. Deal with it. Or piss off and take your 'skills' with you. You're no loss.

    1. Richard 12 Silver badge

      Re: Children

      Because you Leavers won't get any of what you wanted either.

      You were lied to. We tried to tell you, but you wouldn't listen. You wanted to believe the lies so much that you ripped off your ears and stuck your fingers in your eyes.

      Gove: "We've had enough of experts", Farage "I never meant the NHS could have any of that"...

      All you've managed to do is screw everyone.

    2. anonymous boring coward Silver badge

      Re: Children

      "Britain has voted. Deal with it. Or piss off and take your 'skills' with you. You're no loss."

      There is nothing quite like a sore and bitter winner...

      I would have thought you would be all sunshine and charm now when things are looking so rosy?

    3. Paul Shirley

      Re: Children

      "Or piss off and take your taxes to somewhere else"

      Tempting for those of us able to retain EU citizenship. Not really interested in funding Boris' next bleach job.

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