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What would Brexit mean for IT businesses?

Tamlin Magee | June 24, 2016
As the weeks roll towards the day of the EU referendum, we take a look at what a 'Brexit' could mean for business

"This is not a good situation as many issues require on-site access - an outsourced approach may need to have a thick Brit on-site being talked through a set of actions by the intelligent Pole in Poland."

Any anti-European sentiment that is whipped up could have far-reaching consequences for day-to-day operations at the coal-face of IT.

Longbottom warns that government could find itself with the burden of having to train up an emerging workforce in the kind of IT skills that are already contributing to the supposed skills gap in the country.

"The government would have to step up to the mark and train more people in the relevant IT skills," he explains. "But, as this would take years to come up with anything, UK PLC would be impacted pretty badly at the IT operations level."

"Anything that makes bringing the skills needed into the country will further muck up Cameron's much-vaunted claim that we lead Europe in the digital world."

Brexit for business: Regulation

Iain Monaghan, partner at international law firm Pinsent Masons, thinks the impact of a decision to remain or leave is most likely to be felt by the IT sector in two areas: "The attractiveness of the UK as a centre for tech businesses and the effect of a decision to leave on the regulatory environment."

"I don't believe our colleagues in the EU would refuse to enter negotiations with the UK on trade," Monaghan explains. "And on whatever arrangement would be put in place to cover data protection and privacy, once we ceased to be subscribers to the General Data Protection Regulation (GDPR)."

The GDPR is a regulation that is expected to be enforced by 2018. Its purpose is to strengthen data protection for individuals across all EU member states - and crucially for businesses, regulates exporting personal data outside the EU.

In the case of a Brexit, agreements would need to be formed between British firms operating in Europe and with European companies.

Nigel Beighton, who was VP of technology at web hosting firm Rackspace, warned in 2015 that businesses urgently need to think about how they would house their data in foreign countries.

"Within the EU, differences in legislation and uncertainty can form imposing barriers; outside of the EU, these are exacerbated," he said at the time. 

"We should be looking at measures to integrate and normalise processes, rather than obfuscate as a British exit from the union almost certainly would."

Careful thought will need to be given to achieve the ongoing free flow of data between the UK and the EU, says Mark Taylor, partner and data protection expert at Osborne Clarke.

"Ultimately, it is likely that the UK's data protection laws would still need aligning with GDPR in some way," Taylor says.

 

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