Brexit
In May 2016 during the EU Referendum campaign the lobby group, Business for Britain, asked me to speak at the ExCel Centre at The Great British Business Show on why I believed that TechCity (which has now become TechUK) and employment would be better for Britain if we left the EU. This is the speech I gave:
Why TechCity and employment would do best from Brexit
Alistair Kelman - CEO and Co-Founder of SafeCast
Hello,
I’m voting for Brexit more in sorrow than in anger. I love Europe, its people, its culture, its variety. But I work in TechCity and I believe that innovation, technology, science, jobs, the environment and trade will be better from a Brexit.
Here is why. TechCity depends upon countless creative individuals coming together to build and create new stuff. New business models, new artistic creations, new technological inventions. You meet up with someone over a coffee or a drink. You tell him your ideas and he then tells you his. You realise that there is a synergy between your concepts and potential products and services. So you go into business with him, maybe set up a company into which you each put your intellectual properties and skills.
That’s what I’ve done. I have a company which has developed a technology, which we call SafeCast. SafeCast protects the television watershed in catch-up viewing. We were first mentioned in the Sunday Times about two years ago. Today we have a granted patent in the UK for our solution and a registered UK trade-mark. Later this month the US patent for SafeCast is being granted too - I paid the patent attorney’s invoices last Friday. It has been quite a journey.
So having got to this stage over several years I know a bit about bootstrapping a cutting edge technology business from zero. And my knowledge and experience means that I can give other entrepreneurs useful advice. I can say this because, in a previous life, I was also employed, part-time, as a Reviewer on the European Commission ESPRIT programme and a participant in a major European Commission harmonisation project (which went nowhere).
If you want to ruin yourself and your ideas there is a simple way of doing it. You ask for EU help and funding. Maybe via the ESPRIT programme or one of the EU Framework opportunities. If you do this your ideas will die.
By participating in ESPRIT and the Framework programme you are going to be a little minnow in a pond filled with sharks. Sir Andre Geim the 2010 Nobel Prize winner for physics for his work on the development of Graphene said “I can offer no nice words for the EU Framework programmes which can only be praised by Europhobes for discrediting the whole idea of an effectively working Europe” Go for an EU grant or participate in an EU programme and you will give the “kiss of death” to your creativity and your business.
The reason for this is that European Commission is extremely hostile to science and innovation. Its priorities are not in encouraging entrepreneurs but in protecting old technologies used by big companies or traditional French farmers. Think back to the late Sir Leon Brittan's achievement in April 1998 when he was an EU Commissioner, in imposing an anti-dumping duty on imports into the Community of personal fax machines originating from China, Japan, Korea, Malaysia, Singapore, Taiwan and Thailand. This was to save European Electronic Industries from unfair competition arising from cheap fax machines which meant that their businesses were suffering. How well did that turn out ? - I didn’t find a mention of it in his obituaries when I looked.
Let’s look at a nearer time, November 2014, when the President of the European Commission Jean-Claude Juncker fired the EU’s Chief Scientific Advisor, Professor Anne Glover, the Scottish biologist and academic, because the advice she gave him was politically inconvenient. Dame Anne Glover, who is a Fellow of the Royal Society, fell foul of the lobbying from nongovernmental organisations, funded by the EU including green groups who disagreed with Professor Glover's support for genetically modified organisms. It was the old French farming lobby in new clothes - the Common Agricultural Policy writ large.
We have had the ESPRIT and Framework programmes for decades. So name me one world class innovation or company that they have spawned ? Just one unicorn please? There aren’t any. Did Baroness Martha Lane-Fox seek an ESPRIT grant for developing LastMinute.Com ? No, of course not. She is far too sagacious and thoughtful to have wasted her time in trying to gain help from the EU.
Speak to Britain Stronger in Europe (BSE) people and they will immediately cite the World Wide Web as an example of a wonderful EU invention. But it wasn’t!! The World Wide Web was invented by Sir Tim Berners-Lee when he was a contractor at CERN in Geneva which is in Switzerland outside of the EU. CERN is not the EU or EU funded - it has 21 member states including Israel. Britain was one of its 12 original founders in 1954 - three years before the original six member EEC was set up in 1957. Britain In Europe likes to take credit for it - but has nothing to do with the EU or its dead hand on technology and science.
Now I love working with people in TechCity and sharing my knowledge and experience. But I have a problem. I’m British and my first language is English. I am trained as a barrister in the Common Law system - the system that is found across the Commonwealth and in the USA. So naturally I find it easier to work with people who share my language and my legal system - particularly at a technical and administrative level.
When Britain joined the EU forty years ago there was no internet or world wide web to facilitate working at a distance. Today with SKYPE, Google Hangouts and a good IP connection I can communicate and trade with anyone in the world at minimal cost. I can commission piece work from graduates or designers anywhere on the planet - using services such as FIVRR.
But in any lengthy face-to-face relationship EU membership requires me to give a preference in dealing with people who, frankly, are not the best people for me to deal with. Recently while working on child protection issues I had a meeting with a distinguished academic. Knowing about my patents and my work the academic put me in contact with an Australian start-up company that is doing great things in developing privacy enhanced technology apps that could safeguard British children. I met with them and I hope to work with them incorporating some of my granted patents into their apps, widening their appeal and marketability. But this Australian start-up has to combat the British Tier 2 Visa system which is raising the costs and hindering the ease with which it could get its key staff working with me here in London in a satellite operation.
After Brexit the UK would regain control of its borders. It could amend its Tier 2 Visa system so that non-EU technologists could be given preference over unqualified Turkish, Bulgarian and Romanian citizens - maybe bringing in a “London-only” or “TechCity-UK only” work visa system. Such a change would enable companies like mine to form real partnerships with Commonwealth and American companies, possibly with shared funding arrangements without EU costs and bureaucracy. It would be a fillip for TechCityUK (which is not just a London phenomenon - there are offshoots appearing all over the UK in places like the Northern Powerhouse and Bristol) because funding and people go together.
So TechCity could get more and better jobs through Brexit But then what?
When I was a 14 year old school boy I was given the opportunity to go on an engineering training course to the English Electric Manufacturing and Training Centre in Rugby. At that time English Electric was a major industrial company making transformers, diesel motors and steam turbines. It merged with GEC who merged with AEI and Ultra. Where is it now ? Where is Imperial Chemical Industries ? Racal? and the major ‘blue chip’ companies of the age when I grew up?
The answer is that they have all disappeared or become minor players as manufacturing industry has got more efficient and capitalist creative destruction has reformed our economy. Computers when I went to English Electric then cost millions to make and run. Now they can be made for pennies and are in everything. White Goods and Brown Goods are far less expensive in real terms. Precision engineering is inexpensive - just look at the miniature electric motor in a Gillette Fusion Power wet shaver. And, in consequence, the profit generating parts of the economy have moved into services such as design and innovation. The cost of manufactured goods and products of all kinds has plunged and with it their share of the economy. Unlike a lot of the EU, the UK economy has become primarily a services economy sometimes called an ‘invisibles economy’. Services can be very profitable: The British company ARM licenses its chip designs and earns billions forcing Intel to give up on mobile chips - the x86 Wintel machine is now dead and the next few billion mobile phones and tablets will all contain ARM designed chips from the company in Cambridge. Apple designs its products and gets them built in China. The profit margin on each iPhone is around 70%, by far the highest in the industry. It costs Apple about $200 to manufacture an iPhone 6 which retails for $649 and only $16 more to manufacture the iPhone 6+ which retails for $100 more. Today we are rather good at services in the UK - in inventing and creating stuff. London is to advertising what Silicon Valley is to computers with all the world’s top advertising agencies within streets of each other, generating millions for the UK Treasury in profits. Our theatreland, television, music and film industries earn billions for the UK. Our common law legal system is world class and earns billions as an invisible export through the use of our lawyers and courts. The City lives on the back of our legal system and creates new wealth from financial services. We have three of the world’s top ten universities. And we have an open and inclusive culture which is not racist or homophobic - unlike many states within the EU or states that are about to join the EU.
TechCityUK can give us the new creative, knowledge intensive businesses which can replace those lost manufacturing industries like shirt making and steel. Our aim must be to Scale Up businesses - Sherry Coutu’s Scale Up Report should be essential reading for all UK bureaucrats and policy makers. TechCity is tiny and companies such as mine are never going to employ a large number of people - directly. But my company and other start up companies like mine can feed and nourish the world class broadcasting establishment and other establishments in other industries so that those establishment companies can grow and employ more people, giving life chances to people who are not entrepreneurs in their DNA.
But what about the Environment? Why would Brexit be good for that?
A few days ago I listened to Mark Lynas on the BBC Radio 4 programme “Why I Changed My Mind” broadcast in February 2015 where he was interviewed by Dominic Lawson on how the environmentalist, who was once a prominent figure in direct actions to destroy genetically modified crops, why he now advocates for GM technology and what the reaction has been from his former allies. Lynas explained how once he finally looked at the science, properly, he realised that he had been completely wrong about GMOs. He regretted his actions and admitted that his actions may have led to malnutrition in Tanzania. It was a brave and powerful programme because it is very hard for anyone to admit that they are wrong and that harm had consequences. But honest and good people must always be prepared to change their minds and learn - as J Maynard Keynes said “When the facts change I change my mind - what do you do?
After listening to the programme’s podcast I did a web search on Mark Lynas and the second Google entry under his name was an excoriating howl from an organisation called GMWatch. GMWatch appears to be fully funded by NGOs all of which take the EU ‘shilling’. The science on GMWatch site is what can best be described as “dribble”. Why is it still funded? What is its agenda?
Like hundreds of civic minded people around the world I’m a contributor to Wikipedia in a small way - and I try always to maintain a neutral point of view when I prepare or edit any article. GMWatch pretends to have a neutral point of view and just points out the “dangers”. If anything like it came before me on Wikipedia I would despatch it for immediate deletion.
Further reading and research quickly led me to “Sustainable energy – without the hot air” by Professor Sir David MacKay - a British scientist who set out to cut “UK emissions of twaddle” by applying the laws of physics and mathematics to the debate on sustainable energy. I was mesmerized by reading this - here was a British scientist who measured the environmental needs of the world and showed what is possible with true Global Consensus using science, mathematics and engineering. MacKay served as Chief Scientific Advisor to the Department of Energy and Climate Change from 2009 to 2014, My intellectual journey a few days later came full circle when I ran into Mark Lynas interviewing Sir David MacKay online. This was Professor Sir David MacKay’s last video interview before he died where Mark awarded him the Breakthrough Paradigm award and they discussed the future. MacKay died of cancer aged 48 eleven days later - a huge loss to us all.
My conclusions from looking around the subject as a scientist, engineer and barrister with a neutral point of view are that the EU is bad for the environment. Leave aside the madness of the Common Fisheries Policy over the years in “dumping’ over quota fish which has devastated our sea life. The EU on environmental matters is an embodiment of Super Evil Mega Corp - which, while a good name for a computer gaming company. is not a good thing for living people. After Brexit, Britain would regain its seat in many international summits where it could put forward the good science behind UK developments such as the Global Calculator - an Open Source resource created by the UK Department of Energy and Climate Change - rather than the biased and politicised lobbying from the EU’s captive cohorts.
If we voted for Brexit we would be able to dump TTIP - the Transatlantic Trade and Investment Partnership - which entrenches the privatisation of services and the lowering of environmental and workplace standards - all under rules enforced by democratically unaccountable tribunals. Like almost everyone in this country I do not want any part of the NHS to be privatised - yet that appears to be the likely “Mission Creep” of the TTIP agreement. The average tariff which TTIP addresses are minor - they represents less than 3% on the price of the goods and services and we would continue at this level if a Brexit took place prior to a UK renegotiation with the United States. But there are far bigger tariffs which should concern us, that hinder British businesses getting their goods and services across the world.
Some years ago my wife had a cottage in Hythe near Southampton. On the waterfront was a house that was lived in by Sir Christopher Cockerell, the inventor of the Hovercraft. He never made money from his invention owing to patent infringement and copying mainly by the US military. But his invention lives on in the work of Emma Pullen, a businesswoman operating a small manufacturing business in Kent. It is a rented factory on a wartime industrial estate that employs about 15 people called The British Hovercraft Company. It makes Hovercraft - 80% of its production is export, but almost none of it goes to EU countries – partly because their product falls foul of an EU Directive - the Recreational Craft Directive which explicitly excludes Air Cushion Vehicles (ACVs). Whilst not actually banned, it makes selling and using them within the EU somewhat difficult and as a result, customers opt to spend their money elsewhere. But because the EU does not have trade deals with major markets Emma loses out.
Last year she had an enquiry from a wealthy Brazilian businessman who wished to order 5 small hovercraft from her for a proposed driving activity centre in Sao Paulo. Purchase price, £50,000 – duty cost in Brazil £42,000. That’s an 80% duty! Needless to say, the deal didn't go ahead and there's been plenty of similar outcomes dealing with other non ‘EU approved’ nations.
Britain is not allowed to make its own trade deals, and this prevents us from selling our products and services, bringing money into the UK, growing businesses and employing more people.
Instead if we vote for Brexit the UK could negotiate its own trade agreement with the USA and with India and with Africa. It could open TechCity-UK to Indian, African and American programmers under an enhanced Tier 2 Visa system. On behalf of the Scotch whisky industry Britain could negotiate its own trade deal with India - where it could reduce the 150% import duty on Scotch whisky which hinders our exports to this growing market - something that has been stalled for years in EU negotiations. We could introduce Clean Air controls over diesel cars based upon how they really pollute rather than the criminally lax EU measures and do this in conjunction with US Federal environmental standards - using good science rather than fixes. We have experience in this - Britain brought in the Clean Air Act in 1956 after the great London Smog of 1952 that killed thousands. We could regulate the power of electric kettles and electric vacuum cleaners based on safety, the benefits for disabled users, and how well they work rather than on the say-so of EU lobbyists. We could save lives by not implementing the restrictions on the sales of e-cigarettes to cigarette smokers thereby following the independent advice of the Royal College of Physicians.
The economic case for BREXIT is powerful and is grounded in modern science and technology and innovation. Do not be deceived by Project Fear.
Thank you for your attention - I am happy now to take questions.