Brexit – tech community warns that foreign workers now thinking twice about UK

SUMMARY:

Tech London Advocates, techUK and UKCloud told peers on the EU Internal Market Sub-Committee that Brexit decisions in the Cabinet need to be made.

Some leading voices in Britain’s technology community have shared their frustrations with the House of Lords EU Internal Market Sub-Committee about the recent lack of engagement from government and shared concerns that foreign workers are now thinking twice about coming to the UK to settle, in the run up to Brexit.

Tech London Advocates, techUK and UKCloud told peers on the Committee that Britain needs to clearly declare that it is still open for business and urged the government to allow EU workers to come and settle during any transition period, to avoid a cliff-edge in terms of access to talent.

diginomica/government has been tracking Brexit developments since the result of the EU referendum in the summer of 2016. There are mounting concerns over the government’s approach to the exit from the EU trading bloc, as it relates to the impact on the UK’s technology industry.

Russ Shaw, founder of Tech London Advocates, a a private sector led coalition of over 5,700 expert individuals from the tech sector and broader community, said that one of the things that the government can do right now is improve foreign workers’ access to visas and skilling up the nation in terms of digital skills.

Tier-2 visas allow skilled workers to enter the UK on a long-term basis to fill a skilled job vacancy. Shaw told the Committee:

Things on my wish list that could be addressed now – we need to immediately look at the Tier-2 cap. 20,700 Tier-2 visas is simply not enough. I think we can do things like third party sponsorship of Tier-2 visas, so that we ensure that Tier-2 level is getting the right inflow of talent.

The second part is digital skills. How do we ensure that younger and older people are getting up-skilled, retrained, re-skilled, whatever you want to call it. From where I sit, there’s going to be a significant amount of job losses in low skilled areas. I use high street retail as an example. We are going to see hundreds of thousands of jobs disappear in the coming years.

Shaw also noted, that during his travels around the world, he’s noticed that some of the talent that was planning to come to the UK to work, is “now thinking twice”. He said:

Because of what I’d describe as the soft power message, what is coming out of the UK in terms of Brexit. We have to project a message about the openness we have here, that we really want to create a global Britain. We are going to have to change that message, because I’m worried and I’ve already seen people not wanting to come here because of that message.

If we don’t fill these jobs, these businesses will struggle. The start-ups won’t become scale ups, the scale ups won’t become midsize companies, we will have fewer larger organisations. We need to solve this problem now.

Antony Walker, deputy-CEO of technology trade association, techUK, highlighted to the committee that non-UK talent plays a “really important and significant role” in the digital sector. He said that talent currently employed in the sector from the EU is about 7-8%, but added that the net contribution has significantly increase in recent years as the sector has grown. Walker added that these are “highly skilled and talented people”, where 78% are educated to degree level, earning between £45,000 and £80,000. Walker said:

It’s very, very important. These people play an important role. The sector is growing, so it needs more skills. And the economy is digitising, so the economy as a whole needs more digital skills. So there’s an increasing scarcity and the domestic talent pipeline can’t meet that demand.

We are concerned we don’t want to see a cliff edge when the UK leaves the EU, so in the transition period we would like a situation where citizens coming into the UK would have the same rights to claim settled status through that transition period. And then in time we have to develop a new migration system. And what we are absolutely clear about is that the existing Tier-2 system is not fit for purpose and is not able to cope with the change of status, in terms of losing free movement.

The government has said that EU nationals arriving in the UK before Brexit (March 2019) will be able to apply for settled status. However, questions remain what will happen to EU nationals arriving after this time, during any transition period.

Giving the perspective of an SME, CEO of UKCloud, Simon Hansford, highlighted the importance of obtaining talent. He said:

We’ve got about 50 vacancies in our business at the moment, in a 200 person business. We need 50 additional employees. It’s our single biggest inhibitor to growth. And clearly if talent disappears, or it’s harder to get, it becomes even harder for us.

Better engagement

All three organisations told the Committee that the government’s lack of engagement since early December, when the Prime Minister secured a deal with the EU to move on to phase 2 of talks, which includes trade, is concerning. TechUK’s Walker told the Committee that at the moment it’s “very, very difficult to plan” because there is “very little visibility or predictability about what future arrangements could be”.

He said that the big challenge is that the important decisions haven’t been taken, and so civil servants aren’t able to action any sort of policy.

Walker said:

I think there’s an engagement gap. In that because the most important decisions about what the UK’s preferred solution is and relationship with the EU, issues around the customs union, issues about a future migration system, all these big issues where decisions haven’t been taken, means that the officials that you meet with, there’s a limit to how far those conversations can go.

So whilst we are able to raise our concerns, it becomes a lot more difficult when you want to talk about solutions. Because the civil servants simply aren’t in a position to talk about what the future state will be.

Tech London Advocate’s Shaw said that up until December, engagement had actually been very good. He said that up until this point, Ministers and leaders were “all on message in terms of what we need from a sector point of view”. But, he added:

Interestingly, what’s happened since early December, it’s been very limited and it’s been very quiet. There’s not been a great deal of interaction. The whole immigration and visa piece has gone very quiet. Will we even have a visa and immigration policy when we leave in March 2019? Sounds unsure.

In addition, Shaw said that departments don’t seem to be talking to each other, making the whole process very frustrating. He added:

Even though the interactions have largely been with individual departments and they’ve been pretty constructive from a process point of view, many of the people I speak to who are engaging with departments, are saying that within each department it is pretty good – but it’s the inter-department, cross department that seems to be lacking.

I keep hearing that we need to see this as a more joined up process from department to department. I deal with people who are in digital skills in DCMS, in BEIS, in DIT. My message to them is always, this has been constructive, but are you also talking to your colleagues in other parts of government?

On this point, UKCloud’s Hansford agreed, he added:

SMEs can only engage through our trade bodies, which do an excellent job for us. But without the structure, we can’t engage directly. We are busy enough trying to grow our businesses. Similarly, I get very frustrated by the lack of coordination across departments. Basically you’re having the same conversations without that central capability and central voice.

My take

Concerns are mounting and clarity is needed. However, given the chaos in the Cabinet over what sort of Brexit we will be getting, this seems unlikely for the time being.

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Disclosure - UKCloud is a diginomica/government premier partner at time of writing.

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