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U.K. Chancellor Dismisses Post-Brexit Technology Flight Threat

Giles Turner and Thomas Penny
U.K. Chancellor Dismisses Post-Brexit Technology Flight Threat

(Bloomberg) -- Brexit or not, staying data compatible with Europe will be critical, the U.K. Chancellor of the Exchequer Philip Hammond said, dismissing concerns that tech companies will flee the country if and when it exits the European Union.

"I don’t believe tech companies will fly to Europe," said Hammond, speaking at Bloomberg’s “Sooner Than You Think” conference in London Wednesday. "Data is going to be a big issue. Managing our future data regulatory regime that is compatible with European regimes is going to absolutely be an issue.”

Technology startups in London attracted a record 2.56 billion pounds ($3.26 billion) of venture capital investment in 2019 through May 31, according to data published by London & Partners, the city’s official lobbying arm.

Even with the uncertainty surrounding Brexit, and the possibility of a shifting landscape for financial firms, U.K. fintech companies continued to lead Europe in terms funding, taking in $645 million in the first quarter, according to a recent report from CB Insights.

However, Hammond warned that the U.K. should not be complacent in attracting new tech companies, adding that the threat of a chaotic Brexit remained a major risk.

Retain War Chest

“So long as no-deal is a risk we need to retain that war chest to protect our economy from the initial shock of no-deal,” he said. “There will be a lot of businesses and individuals who need support.”

The U.K. has seen its technology scene expand rapidly in recent years, with further growth expected. Facebook Inc., Snap Inc. and Alphabet Inc.’s Google have all announced plans to increase hiring in the U.K., while Apple Inc. is leasing about 500,000 square-feet of office space at Battersea Power Station on the south bank of London’s River Thames.

Hammond’s comments come as a record 10 British Conservatives fight each other for the chance to lead their party and the country after the race to become the next prime minister formally opened.

As the candidates lay out their plans, Hammond said that more “spending on public services, cuts in taxation are only desirable if they’re affordable and funded."

He told Tory leadership contenders that “it’s simply not the case that tax cuts pay for themselves” and cash should not be committed from provision set aside for a no-deal Brexit, adding that a general election or referendum might be necessary to solve impasse.

To contact the reporters on this story: Giles Turner in London at gturner35@bloomberg.net;Thomas Penny in London at tpenny@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Vidya Root

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