Brexit: A hard stop to freedom of movement by Theresa May is bad news for the UK's tech industry

Lynsey Barber
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Tech companies will face uncertainty over hiring sooner (Source: Getty)

Theresa May's decision to put her foot down on freedom of movement after Brexit is likely to throw the UK's burgeoning tech industry back into turmoil not felt since the immediate aftermath of the vote to leave the EU.

The Prime Minister today confirmed a hard deadline of March 2019, after which a registration system will be introduced, closing down the prospect of a "softer" transition period for immigration that would give business more time to adapt to changes when it comes to hiring.

"Business needs a transition period because we still need to hire people from abroad with a clear, easy to follow process during the period," said George Bevis, founder of challenger bank Tide.

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"I have no faith in the government’s ability to deliver that without a transition period," he added.

Access to talent has become the top concern for startup founders and entrepreneurs, with little guidance from government on what provisions may be given to foreign workers in the UK or how they might be able to hire from abroad after Brexit. Around 30 per cent of people working for UK startups are from outside the UK.

“The government’s confused messaging on immigration is increasing uncertainty and damaging the UK’s reputation as a destination for fast-growth businesses," said founder of Tech London Advocates Russ Shaw, who welcomed the move by home secretary Amber Rudd late last week to launch a major investigation into EU migration.

"Home Secretary Amber Rudd’s announcement on Friday that there would be no 'cliff edge' provided reassurance for the tech sector," said Shaw, slamming the latest move.

"The Prime Minister’s most recent statement undoes this progress and will make the UK’s technology entrepreneurs concerned about access to talent following Brexit."

A cliff edge now also looks more likely according to Bevis, who said: "If a cliff edge Brexit means lots of problems unresolved the day after Brexit happens, that looks inevitable at this point. Business should not be victims of the government’s willingness to impose 'teething problems' on the rest of us."

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While investment has been largely resilient in the face of uncertainty, with several large funding rounds for startups since the Brexit vote last June and figures indicating cash going into startups is on the up, a lack of clarity from the government on immigration has kept the industry on edge.

Bevis added: "A hard stop to free movement would have a major impact on our business as we couldn't’t hire the talent we want as easily. It would certainly make us consider whether the UK was the best place to grow our team, and whether we should grow it elsewhere instead."

The uncertainty over the status of foreign workers in the UK has already put many off coming to work in the tech sector, according to some figures.

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The industry had previously been assured by chancellor Philip Hammond that it would have access to "the best and the brightest" to secure its position as a world leader, with one tech insider confident in his ability to push the importance of the matter on No10.

He had assured as recently as Friday that full migration controls would not be imposed for some time after March 2019. Today's statement from the Prime Minister's office comments made by trade secretary Liam Fox who yesterday shut down talk of extending freedom of movement into any transitional period amid a split in the cabinet.

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