Being a lawyer-led company, Monax Industries has a bunch of legal knowledge in-house - more so than most software companies. As such, we’re quick to form opinions about policy matters.
Naturally we have thoughts on the EU membership referendum which occurred last week. You may have noticed that the people of the United Kingdom voted “Leave.”
A tremendous disappointment for British business
Any way you look at the “Leave” vote, it is a huge disappointment for British business. Two years ago, Eris Industries had three employees who worked out of our homes. Today, we have 17, with our head office remaining for the moment in London, an office in Berlin, and a subsidiary operating from New York.
We are Europeans. Our team is French, Italian, Belgian, German, Swiss, English and Scottish. (American, Canadian, and South African, too.) We simply could not have assembled this team, and grown as we have, without the UK being a member of the EU.
We expect wailing and gnashing of teeth on this issue across London and the UK over the coming weeks and months. Because the British people chose this outcome, denial is not productive. Nor is it a choice. As democrats we must accept that we are dealing with an exit from the European Union.
But we can mitigate. British and global companies can, and should, start considering our options and work towards adopting a common position. In Monax Industries’ view, far and away the best option on the table is what the Adam Smith Institute calls the EEA Option.
Why we support the #EEAOption
The EEA option de-risks Brexit. It allows British business to thrive, and allows European and global business to deal with the whole of Europe - and the wider world - from their current bases in London.
There are very sound business reasons to support this positon. As an information-age startup with a distributed workforce, when we started up in the UK, the UK’s membership of the single market made it easy for us to expand our operations on the continent with very little hassle. It’s always hard to find the right people. However, being able to hire in Germany, Belgium, and elsewhere meant we always managed to get our hands on the right candidates to help our business grow and expand into the world-leading blockchain technology provider we are today.
We and our employees benefit from the four freedoms, especially those of free movement of labour and capital. If these freedoms are taken away, new, innovative businesses that follow in our footsteps will be hamstrung by stricter immigration restrictions, tax regulations, and compliance obligations, as well as reduced availability of investor funds.
Freedom of movement is really the most critical piece. With it we can hire the best people Europe has to offer, and deploy them where we need them, when we need them, for as long as we need them to be there. Without it, our compliance costs would go up and we simply wouldn’t be able to get the right talent - because there simply isn’t enough of it concentrated in any one place in the European Economic Area. This includes London, which (as anyone in tech will tell you) is simply not the hub of global tech talent it fancies itself to be.
So you see, Brexiteers, freedom of movement is not merely about holidays in the south of France or a shorter queue at the UK border. To be blunt, without freedom of movement in the EU/EEA, British firms cannot compete effectively in global markets. The UK’s talent pool has proven far too small for our requirements.
Our conclusion is that the only compromise option that ticks the boxes in terms of business’ interests – from
- free movement of labour, to
- the single passport for financial services, to
- tariff-free trade with the EU,
which is also palatable from the perspective of the Brexiters and the much-beloved Scots, is the EEA Option.
Why others should support the EEA Option
We therefore support the EEA Option (full paper here), emphatically. We would encourage others to do the same, for the following reasons:
Boris Johnson, Daniel Hannan, and Douglas Carswell – all free marketeers, each of whom are likely to have some say in what the outcome of the Brexit discussions are – have all hinted (or, in Carswell and Hannan’s case, expressly stated) that continued membership in the single market is desirable. This is an entirely sensible and prudent position to hold and is in the interests of British business. We should let them know we support this position, which will substantially mitigate the damage of Brexit to British business, as soon as possible.
A 48-52 defeat is not a mandate to withdraw from all trade relations with the EU and “go it alone” – the so-called “WTO Option” – but rather it is only a mandate to leave the EU. We owe it to the majority to leave, but they owe it to the (very large) minority to concede some middle ground. Compromise is hard, but needed, considering any exit will operate to unilaterally strip 16 million (!) British citizens, and British businesses, of EU citizenship and the rights and freedoms we currently enjoy and do not wish to surrender.
British business must avoid hand-wringing and advocate in favour of settlement on the UK’s future status very quickly. As in today, as in right now. An “investment strike” is already underway. Deals are being abandoned, orders are being cancelled. Some of my former colleagues in the City have told me firsthand accounts of how their dealflow is drying up on account of #Brexit. Overcoming political paralysis to make a rapid decision in this direction will promote financial stability, inward investment, and London’s continued position as a financial services and innovation centre. Every day that there is delay will do further damage to this position.
This - investment strike - is what matters , not £ or FTSE. Longer we faff around, worse it will be. https://t.co/EaPclJCp04— Jonathan Portes (@jdportes) June 26, 2016
We are therefore getting behind the #EEAOption and encourage the rest of British industry - tech, banking or otherwise - to get behind it immediately, vocally, and forcefully. We also recommend supporting and engaging with the think-tank community and their advocacy work in this area.
We sincerely hope you will join us.