Tech companies could abandon the UK if it leaves the European Union, digital economy minister Ed Vaizey warned on Thursday.
Vaizey told Business Insider he is concerned that tech companies of all shapes and sizes could leave for other European nations if a Brexit occurs.
Speaking in an exclusive interview, Vaizey said: “With countries like France and Germany very focused on tech, and the reputation of some of the Baltic states, tech will have plenty of homes to go to within the European Union if we were to leave.”
Tech giants like Google, Microsoft, Salesforce, Cisco, and Huawei have created sizable outposts in the UK that employ tens of thousands of people. There are also thousands of tech startups across the nation, particularly in London, that employ large workforces between them.
Vaizey believes that tech companies get better access to talented workers and capital by being a part of the EU. He’s also a firm believer in the European single market, which gives UK tech companies access to 500 million consumers.
“Clearly if we were to leave the European Union it would make that [access] much harder. It would make it a less attractive place for investors to come to invest in tech companies and I think they might well start to look at opportunities in other countries,” said Vaizey. “I think other European countries would not be slow in making one easy comparison which is we’re in the union and they’re not.”
Vaizey’s comments, made at the Salesforce World Tour conference on Thursday, come less than a week after a Berlin-based venture capitalist said a Brexit would make it more complicated for his firm to invest in UK tech companies. They also come after Tech City UK, a government-funded organisation that aims to support the UK tech sector, found that seven out of 10 tech founders and investors want the UK to remain within the EU.
Microsoft has also come out against a Brexit, saying Britain’s membership in the EU makes it one of the most attractive places for Microsoft to make investments.
Tech City UK is concerned that big commitments to the UK — such as Google’s Kings Cross campus — may not materialise in future, if London is no longer seen as a gateway to the EU market.
Eileen Burbidge, partner at Passion Capital and Chair of Tech City UK, said in a statement: “London is the biggest tech centre in Europe and attracts the brightest and best talent. Founders and investors fear that advantage would be lost if the UK leaves the EU. We don’t really know what would happen and that uncertainty is dangerous. Would companies move their headquarters? Would there be a flight of capital from across the UK? The chances are that it would increase everyone’s costs and lead to slower growth in the overall UK economy from London and the regions alike, potentially for years to come.”