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Why a Conservative Majority Could Be a Disaster for the UK's Tech Industry

30/04/2015 22:45 BST | Updated 30/06/2015 10:59 BST

For the last two months, I've been religiously checking Nate Silver's FiveThirtyEight blog to see if he has some profound insight into the result of the General Election. Unfortunately, there's been no Eureka moment, Nate's polls, like everyone else's, show a dead heat. This forces me to mull the possible economic consequences of multiple permutations of government. The conclusion I've reached is that a Conservative majority or Conservative/UKIP coalition would be devastating for the UK's tech industry.

As I'm sure people will be quick to point out, both these results are growing increasingly unlikely. However, that's assuming that May's result doesn't produce a weak minority government that sparks a snap election in autumn, a la 1974, and a surge in support for one of the main parties. For reference, the Fixed Term Parliament Act makes exception for no confidence votes and, in any case, can easily be amended.

So why do I think the traditionally business friendly Conservatives pose a threat to the UK's tech sector? In a word - Europe. Although it has fallen far down the political agenda and gathered little media attention recently, it's worth remembering that David Cameron has bound himself to a referendum on EU membership if he is re-elected. The price of a coalition deal with the Lib Dems would, luckily, kick this into the long grass. However, if the Conservatives gain a majority next week or in October, a referendum will be on the cards.

The reason I fear an EU referendum is because the UK's tech sector benefits even more than most sectors from Britain's place in Europe. Access to the single market, combined with the UK's cultural and economic ties with the US, makes the UK the ideal place to scale a tech company. Rapid growth and a global presence are often essential for the survival of start-ups in areas of cutting-edge technology. Similarly, a huge proportion of US and Asian tech companies use London as a gateway to expansion into Europe. Consequently, London is Europe's leading city to gain tech investment capital.

Threatening the UK's access to Europe is just one side of the coin, a referendum is also a severe threat to recruitment. It's no secret that there's a chronic skills gap in the UK and this is readily apparent in the tech industry. While growing indigenous talent is crucial and should be the priority of the next government, the skills gap is not going to get plugged solely by home grown recruits any time soon. The sheer diversity and volume of technical skills required by the UK's tech industry necessitates the free flow of workers to the UK. Closing, or even threatening to close this avenue will severely hamper the ability for UK start-ups to grow over the medium-term.

For full disclosure, I see my personal and professional political preferences as separate. My assessment of what could happen if the Conservatives win a majority is focused entirely on how it will impact my business and the people who work with me. With that in mind, I have no problem with a Conservative/Lib Dem coalition or a Conservative minority government (assuming it was stable).

However, a Conservative majority would put EU membership back on the agenda and, even if David Cameron did not intend for the referendum to actually take place, it will undoubtedly negatively affect the UK's tech industry. It is worth remembering that, if managed properly, the UK's tech industry could easily surpass financial services as the nation's main driver of economic growth.

Mike Weston is CEO of data science consultancy Profusion