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UK puts on show of confidence at CES about its post-Brexit tech prospects

In an interview with CNET, the country's investment minister talks digital tax, relations with China and how the British tech industry will thrive after life in the EU.

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The UK looks to the US as it prepares to leave the EU.

Jonathan McHugh/Getty
This story is part of CES 2020, our complete coverage of the showroom floor and the hottest new tech gadgets around.

With less than three weeks to go before the UK leaves the EU, you might think the British government would have more important things to do than attend a Las Vegas technology show. But last week at CES, Graham Stuart, the UK's minister for investment, was flying the flag for the country's tech scene as it finally prepares to enter a post-Brexit world.

It's the second year in a row that the UK sent a government minister to accompany the country's delegation to the show, which this year included more than 65 companies. Stuart's presence at the show should be interpreted as "a major statement of confidence by the UK in its future and technology," he said in an interview at the event.

Last year at CES, then Secretary of State for International Trade Liam Fox said the UK's success after the country had left the European Union was dependent on the tech sector. The original March 2019 deadline for leaving the EU passed without Brexit going ahead and after former Prime Minister Theresa May failed several times to secure a deal she was replaced by Boris Johnson in December.

With the date for leaving now finalized as Jan. 31, the investment minister used CES as an opportunity to reiterate Fox's sentiment and showcase the success of the UK's tech scene and the strength of its universities. "Our leadership in technology in Europe is a really important part of making a success of the UK as we leave the European Union, and CES is an important part of telling that story," he said.

There is some concern that Brexit may cause people to feel unwelcome in the UK -- either putting them off from coming in the first place or making them feel as though they should leave. Investment in UK tech could also be directed elsewhere, as was the case last year when Tesla chose Germany over the UK to build its new gigafactory. 

In a letter to the prime minister last year signed by over 1,100 signatories, including Samsung Research and Wikipedia founder Jimmy Wales, industry lobbying group Tech for UK expressed concerns that Brexit would stem the flow of talent to the UK. "We know many of the innovative startups of the future are looking to other EU cities to relocate to, or simply bypassing the UK altogether," the letter said.

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UK Investment Minister Graham Stuart.

UK Parliament/CC BY 3.0

But Stuart is dismissive of this. He points to the record foreign investment UK tech companies attracted last year (£9 billion or $11.7 billion, according to research by venture capital firm Atomico -- more than France and Germany combined) and the various visa programs that will be put in place for talent wanting to come and work in the UK. 

"The big change post-Brexit is that we're going to treat the whole world the same -- it doesn't matter whether you're German, you're French, Ethiopian, Nigerian or Japanese. If you've got something to offer, then the UK is open to you," he said.

He did agree, however, that it's important to better promote the message that the UK is keen to welcome foreign tech talent, and he asked people to look past some of the negative headlines.

"Under Boris Johnson, we are determined to create the most business-friendly environment in Europe," he said. "And if you want to do that, you've got to make it the best place to live in Europe, and that means strengthening our commitment to a tolerant open society that makes everyone feel welcome if they've got something to contribute."

Friendly relations with China and Trump

As the UK prepares to leave the EU, its relationships with non-European countries could also come under greater pressure and scrutiny.

Prime Minister Boris Johnson currently plans to implement a 2% tax on digital companies operating in the UK starting this April, which would generate an estimated £500 million ($640 million), largely from US tech companies including Amazon, Google, Apple and Facebook. In pressing ahead with the tax, Johnson risks attracting Donald Trump's ire, after a similar proposal in France resulted in the US president suggesting the US would retaliate with taxes of its own.

When asked whether he thought such a tax might negatively impact relations between the US and the UK, Stuart didn't appear concerned. "I believe that we will continue to have a very good close relationship with the United States while nonetheless determining our own taxation policies," he said.

He added that the policy wasn't designed to be discriminatory towards the US. "We believe in a rules-based liberal, open-trading system in which there's a level playing field and everyone is treated equally," he said.

The UK could also be at risk of upsetting Trump if it doesn't follow in the footsteps of the US by excluding Chinese company Huawei from its national telecoms infrastructure. Trump has repeatedly sent a clear message to US allies that they must take action on Huawei if intelligence sharing between them is to continue.

The UK has a different relationship with Huawei -- its equipment is embedded in the country's mobile networks, the company's devices are all still on sale in the UK and Huawei has invested in building research and development facilities on British soil. Over the past year, the country has consistently delayed making a decision on whether it will continue to do business with Huawei.

"We have increasingly close and successful relations with China and Chinese companies and I'm confident that we will continue to see Chinese investment flow into the UK," said Stuart. "Just like China, the UK takes an interest in protecting its interests and working with allies to make sure that we should remain secure. But I think the opportunities going forward are immense on both sides."

When pressed on whether the British government was feeling pressure from the US over the issue he declined to comment further. "We determine our own policies," he said.