This blog was written on February 3rd 2018.
From the hotel window he could see across the roofs of Fisherman’s Wharf to Alcatraz, with the Golden Gate Bridge off in the background. Images that evoked The Rock and Bullitt or, for those with longer memories, the TV series The Streets of San Francisco, with Karl Malden and a very young Michael Douglas.
But James “Jim” Johnson wasn’t there to engage in remembrances of movies past or to admire the view. As the UK Executive Director of 4Zero, one of the US’s leading transnationals in the IT space, he was there to pitch to a board committee on a new $500m+ project, with around 1,200 jobs, to be located in Europe, developing state of the art computer security systems, vital for governments and businesses at a time when terrorist and state-backed cyber guerrilla war campaigns were the stuff of daily life.
Normally, pitching for a project wouldn’t knock Jim. After all, he had helped catapult 4Zero in the UK from a small 18 people operation to the multi-billion pound, 3,000 people operation it was today. He had pulled off many internal company coups to grow the business, seeing off competition from the French, Germans, Spanish and Irish in many a memorable battle.
But today he was apprehensive.
Brexit. How he had come to hate that word. Brexit, bloody Brexit.
The decision by the UK to leave the European Union, the Single Market, the Customs Union, damn it, even the agreement that allowed Ryanair and others to fly around Europe bringing cheap travel to millions.
And for what? To do future, possible trade deals with China and India? Putting everything at risk because a handful of Brexiteers wanted to “take back control”. He remembers Theresa May, then home secretary, now prime minister, saying back in early 2016:
So, if we do vote to leave the European Union, we risk bringing the development of the single market to a halt, we risk a loss of investors and businesses to remaining EU member states driven by discriminatory EU policies, and we risk going backwards when it comes to international trade.
Then, having become Prime Minister, she goes and proposes the most extreme form of Brexit even when she knew just how damaging to the UK it would be. Nuts, thought Jim.
So this time, with Brexit following him around like some evil shadow, Jim wasn’t confident. He knew before it even began that “Dirty Harry” Eickelberg, the CEO, would let him have it over Brexit, asking him “if he felt lucky” that the board “would make his day”. And like the punk on the ground in the movie, he just didn’t know, he hadn’t been counting.
Two floors below him he knew that his French opposite number, Alain Sauvage, would be feeling lucky. Why wouldn’t he, with the new, young French president, Emmanuel Macron, rolling out the red carpet for businesses that wanted to flee Brexit Britain, reforming labour laws to make it easier to manage in France, looking at how to make work and enterprise pay. Sauvage would be able to put a package of financial and other assistance the table to build in the South of France near Montpellier, minutes away from the beaches and blue waters of the Mediterranean.
And, no problems with the best and the brightest moving from elsewhere in the EU to fill the jobs, secure in the knowledge that they could stay as long as they liked, buy homes, start families, their lives not at the mercy of some immigration control, target driven, poorly paid bureaucrat who would soon be making such decisions in the UK.
Just when did the UK come to seem so unwelcoming, Jim wondered, to give the impression that all foreigners were hated. Politicians may protest otherwise, but their proposals and actions undercut their words. That’s what his colleagues elsewhere in the world in 4Zero were telling him, that’s the way it was coming across.
If Sauvage wasn’t competition enough, then there was always Barry O’Rourke, ready to turn on the Irish charm. If O’Rourke couldn’t match the blue waters of the Med, he could put corporation tax on the table, or, to be more accurate, take it off the table. A headline rate of 12.5%, what was not to like and, if the rumours were right, deals to be done to take it below that. Sure, the Irish tax regime was in the Brussels crosshairs. But how long would it take to get agreement on tax reform? Ask the US Congress.
And, as O’Rourke liked to say, the Irish spoke better English than the English, had a common law system, and did not seem to have a problem with immigrants. Jim had read somewhere that the Ireland had a lot more Polish and other Europeans living there as a proportion of the population than the UK, but Ireland had no UKIP and there was no market in Ireland for immigrant-bashing politicians. Wasn’t the Irish Taoiseach (prime minister), Leo Varadkar, the gay son of Indian immigrants? Ireland has come a long way, Jim thought. A gay, Indian prime minister. That was some message of welcome to give the world.
The door opened and “Dirty Harry” stuck his head out. “Jim, you’re up”, he said, beckoning him into the room. Also there was Vugar Dimitroff, the COO and son of a Russian émigré to the US, Aruna Patel, CFO, recently moved from India, and Manuel Lopez, CHRO, a Californian known to be active in Democrat politics. Jim remembered reading somewhere about the number of US companies that had been founded by immigrants or by the sons and daughters of immigrants.
Not too much sympathy for “drawbridge” immigration policies in this room or among the wider high-tech community. Indeed, Manuel had recently signed, along with over 100 other CHROs, the HR Policy Association letter to legislators asking them to consider “in future policy-making the vital role foreign-born workers play in the U.S. economy, starting with the legislative authorization of the Deferred Action for Childhood Arrivals (DACA) program, so-called dreamers.” (link here).
“Jim, let’s cut to it”, said Harry.
“Forget your PowerPoint. We know about Global Britain, the industrial strategy, the “deepen and special partnership” you guys want with the EU after your leave. All, if, if, if… if we do this, if we negotiate that, if the EU agree to what we ask…”
“The government is hopeful….” Jim began.
“Yeah” interrupted Harry, “and I’m hopeful the Cleveland Browns might win a game next year, which I suppose is like saying that Arsenal might win the Premiership anytime soon”.
“Jim”, said Manuel, “two things worry us. People and data. I’ll deal with the people issue. Aruna and Vugar will pick up on the data. As we see it, we’re going to run into a wall trying to get people to come to the UK in the future.”
“The government plans a work permit/visa system to encourage high-skills migration to the UK after Brexit”, Jim began.
“So they say”, Manuel continued. “But what we see is this. Still no legally binding deal on citizens’ rights covering EU citizens in the UK after March 2019, when you guys say hasta la vista to the EU. This week prime minister May said that those who come to the UK during – what do you call it, transition or implementation, you can’t even agree on that? – will have even less rights than those there now, to which the EU says, “in your dreams”, and there are no proposals on the table as to what happens after the transition or implementation comes to an end”.
Jim shrugged. “Can’t argue with that”.
“Now, why would anyone in the right mind want to put a people-dependent facility into the UK when we have no guarantee that the government will have a work/visa regime in place that will allow us to attract the talent from across Europe that we need”, Manuel went on. “Actually, why would any talented young European want to come and work in a country which seems to be going out of its way to shout that they are not really welcome and will be barely tolerated at best”.
“When you put it that way…”, say Jim, somewhat dejectedly.
“What other way is there to put it”, Manuel said, “you tell me”.
“Maybe time to move to the data issue”, said Harry. “Aruna….”
“Sure thing” said Aruna and she turned to Jim, “Look Jim, you know better than most that this company is all about data, and data transfers within the EU are mission critical. Today, we can move it around from Munich to Manchester, Dublin to Dijon, Belfast to Budapest without a problem”.
“By contrast…”, Aruna continued “…look at the problems we have moving data from the EU to the US. I understand the European concern with data privacy. If I had lived under the Nazis, Fascists, Communists and their army of informers I’d probably feel the same way. And, to be honest, I don’t like the thought of my personal information ending up somewhere in China or, to be even more honest and blunt, in the cloud of some organisations here in the US.”
“As we understand it”, Vugar chimed in, “when you guys, to borrow Manuel’s words, do say hasta la vista to the EU, you become a ‘third country’ and data can only be transferred from the EU to a third country if there is an ‘adequacy’ decision from the EU Commission which says that the third country’s data laws are sufficiently robust that data can be transferred there.”
“That shouldn’t be a problem…”, Jim interrupted, “…in May of this year the UK will be implementing the EU’s General Data Protection Regulation (GDPR) which means when we leave we will have exactly the same data laws as the EU. That should make an adequacy decision pretty easy to come by”.
“You would think so”, said Vugar, “but as we understand it there are those in the EU who are uneasy at the UK’s snoopers’ charter: its Investigatory Powers Act 2016, which requires web and phone companies to store everyone’s web browsing histories for 12 months and give the police, security services and official agencies unprecedented access to the data. With my family coming from Russia like, sort of send shivers down the spine.”
“Now”, Aruna came back in, “those in the EU who don’t like this can’t do much about it now because of the security exemption in EU data laws for members states. But when the UK is outside the EU then it really will be hasta la vista baby when it comes to data transfers. The shop will be shut overnight.”
“Look”, Jim said, “David Davis, the UK’s Brexit negotiator is confident that a deal on data can be done before we leave, meaning no problems as we go forward”.
“Is that the same David Davis who said in 2016 that the UK’s exit terms from the EU plus an all singing, all dancing, signed, sealed, delivered I’m your man, trade deal would be in place before the UK left?” demanded Harry.
“Eh, yeah”, replied Jim
“So, we are depending on this guy to ensure that there is no Dover on the digital highway”, continued Harry.
“Dover?” asked Jim
“Yeah, I’ve seen a study which says that if there are delays to processing trucks on the way to Europe because of customs paperwork at Dover you could have tailbacks up the M20 for over 20 miles in minutes. Look, there will be “Dover-style” tailbacks on the digital highway as well, you just won’t see them in the same way as you can see several thousand trucks”, Harry added.
“So that’s the problem for us…”, said Aruna,
“…no certainty about the future, no guarantees, a leap in the dark. Would you invest north of $500m, well north of that figure, in the UK in such circumstances, when we can go to Montpellier or Dublin and know where we stand? Bit of a no-brainer.”
“To wrap it up”, said Harry, “it is a simple as this. As we sit here in San Francisco today, we have no idea where the UK will stand with the EU in the next year or so… in, out or shake it all about. Nor do we have any idea as to what direction a future government will want to take the UK. Some of your guys want to your country to become what they think Singapore is like, while some Labour people seem to to want it to become a Venezuela or Cuba without sunshine. So, to hasta la vista to the EU we can add bienvenido a la revolución, though whether of the right or left we don’t know. Jim, what would you do?”
As Harry walked Jim to the door he smiled: “Jim, as we say in these parts, I’ll have my people call your people and let’s do lunch”.