Talented people and investors would seek alternative locations if the UK were to leave the EU following the referendum, according to tech startups.
During a meeting with London-based tech startups at Tech City in East London, Ed Vaizey, minister of state for culture and the digital economy, said leaving the EU would make the UK less attractive to investors and create friction for businesses when recruiting staff.
“I have always been, to a certain extent, a Eurosceptic, and looked at regulations and not wanted Europe to do too much. But throughout this campaign, I have become more and more convinced that Brexit would be a complete disaster for our country,” said Vaizey.
He addressed three key issues in the Brexit debate: sovereignty, immigration and the economy.
UK has power under the EU
On the claim from Vote Leave campaigners that the EU prevents the UK from making its own decisions, he said: “Sovereignty and the belief that the UK is Gulliver held down by Lilliputians is completely false.”
In contrast, he said, ministers from across Europe work together. Although there are sometimes trade-offs, he added, individual countries can push for certain changes, as the UK did to lower mobile phone roaming charges, “which was against the wishes of some other member states”.
Vaizey said net neutrality regulations were also driven by the UK: “It’s the same in the digital market, with Britain seen as a leader in shaping the regulations that will help businesses and consumers.”
Brexit a threat to UK’s economic clout
On the economy, he said: “Any serious bit of research says there is going to be a huge impact on the UK economy if we leave the EU.”
Vaizey said the UK is probably the leading tech nation in Europe, but France and Germany are keen to attract investment.
“If you are a big investor from the US looking at Europe after the UK has left, you will be looking much harder at places like Berlin and Paris than London, which is probably the default place now. Outside the EU, it will be hard to attract the right kind of companies that scale up.”
Tech firms need migrant workers
In terms of immigration, Vaizey said the majority of people coming to the UK were from outside the EU, and there was a lot false information being repeated by Brexit campaigners.
“There is a myth peddled that somehow 500 million Europeans are waiting at the border to come into the UK, but clearly there aren’t because we have had free movement for many years,” he said. “There is also a myth that the people coming are spongers and criminals, when they are, in fact, people who want to contribute to our economy.”
Vaizey said if the UK left Europe, UK citizens could expect a tougher immigration regime that would make it difficult for businesses to bring much-needed talent into the UK to work.
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