Perspectives from a microbusiness: why free movement is a deal breaker

Written by Nic Wistreich on . Posted in articles

Turbine Hall, Tate

I get it. The people have spoken (well, 37% of the electorate or ~26% of the UK). Brexit means Brexit (tho no-one knows quite what that is) and the decision is clear. There may be a multitude of reasons why people voted Brexit – to save money, to avoid EU regulations, to get more parliamentary sovereignty, to cut welfare for EU migrants, to send a message to Westminster, to send a message to Brussels, to get rid of non-whites, to get £350m a week for the NHS – but change is coming. What sort? Well, although had the EU offered David Cameron a better deal in February, we'd probably have voted to Remain, making it plausible the EU could offer us a better deal now, that doesn't appear to be happening. The British negotiating positions looks like either Single Market without free movement or if not given that, full Brexit, perhaps with a right-to-remain agreement for current residents in exchange for similar deal for Brits in the EU or a Canadian-style trade deal. In either scenario the system of democratic influence into the operation of the EU we currently have; the seat at the negotiating table for new deals, treaties and funding schemes – that has gone, as are the network of MEPs who exist to communicate local issues to the EU.

Removing free movement means that if I was going to open a big factory, if I couldn't employ enough cheap skilled workers to do that in the UK, I could just set up a factory in in Poland and do it there. Poland would get my PAYE, VAT and Corporation Tax and there would be no tariffs for me to sell my stock back into the UK. I'd employ fewer local businesses to support and build my factory. It's good for me, Big Business, but terrible for countries and communities. This is the thing about free movement that politicians seem to not bother explaining. Economically speaking, free movement is designed to protect local jobs and the local economy, it's a concession to social issues in an otherwise purely business deal.

Though for me, free movement means something different. It means the ability to not have to make the trade-off between being able to travel and being able to hold down a job or start a business. I can currently both work and run my business while travelling and living around the EU. I'd prefer if that was the world (and to be honest, provided I bring money with me, and keep moving, that's true). I appreciate many people in many jobs don't have this luxury, tho they doubtless earn more. Still, remote working, the gig economy and digital businesses are only growing, ten years from now my lifestyle of working for clients while starting ventures from any nice place I chose (with Wifi) could be the norm. What kind of lifestyle do people want their kids to have? My brother is just starting a top MA in Sweden – for free! Why prevent people from the freedom to bounce between Florence and Copenhagan, Paris and Krakow, Berlin and Madrid, building a network of peers, co-workers and friends? Why deny that luxury to British citizens?

If free movement goes, then I guess I would to, and move to a country that does offer it. Businesses and entrepreneurs will be the first to be offered plenty of EU27 incentives and residency by other states, something that's already begun with the Berlin billboard van. America wants to fast-track visas for entrepreneurs with startups. The public funding systems in some EU countries are brilliantly set up to support startups and small business (not to mention research, art, film, tv production, theatre, etc).

I can imagine some Brexiters would call those who Leave a traitor to their country – actually all of this is the reverse: it's because I want to stay in the UK and run my business from here that it matters so much to me that we get the best possible post-Brexit deal. I know I'm not alone.

Why the EU matters to a tiny business like Netribution

I've not done the sums but maybe up to a quarter of my business in recent years has come through the EU. Netribution is a tiny outfit that's chosen to stay really lean and small with the lowest possible overheads in order to maximise time to develop new ideas. Still, through this microbusiness, I've worked on Honeycomb, an EU Interreg project researching and building creative digital micro/SME business networks across Ireland, Northern Ireland, Scotland and England; and Interreg's Scandinavian World of Innovative Media, bridging Copenhagen and Malmö with some of the region's most creative digital people and microbusiness. You can download a copy of the research I did for Honeycomb here, and watch the slightly stumbly lecture on web film distribution I did for Swim here.

Eight years ago with Adam P Davies, Netribution launched our 490-page world Film Finance Handbook at Cannes. We sold copies in the local bookshop and the American Pavilion, and on upturned boxes in the street to passing multi-million dollar producers. We even thrust a copy into the hands of a then Culture Secretary, Tessa Jowell – better access then we could have got in London. Best of all, we paid no tariffs and had to fill in no forms.

Three years ago I spent six months working on digitisation of the book in Berlin at half the living costs of London. Two years ago, at a free info day at the Pompidou Centre in Paris for the Horizon 2020 CAPS project I met Henry Story, who created AltaVista's BabelFish and pioneered the W3C's much overlooked WebID protocol, making up for the fact that the CAPS fund I applied for, CHEST, turned me down. An example of how the EU attracts the 'best and brightest': Henry moved with his family to London to find partners for EU-funded projects built around his new system, though now faces much uncertainty staying here. Indeed in the week following Brexit, I almost applied for ODINE with an open funding data project, but pulled out for fear being British would work against the bid.

This isn't to say there's no future in the UK outside the EU – it only takes 45% of exports and for me generates maybe 20% to 30% of my business, depending on the year. This could be replaced. But, and this is the key thing, it has provided or helped the most interesting and challenging work I've got to do, while introducing me with all sorts of interesting and talneted people, not to mention taking me to some beautiful cities. In 2014 that included Paris, Brussels, Copenhagen, Cannes, Cork, Helsingborg & Malmö – half self-funded, half by the EU. With AirBnB, local supermarkets and Easyjet it's pretty cheap.

I’m just running a tiny business, never got start-up cash (unless credit cards count), have no degree and struggled to get going as much as anyone. So I'm lucky to have this kind of work now, but I'm not alone: countless film, TV & interactive producers tap into Creative Europe funding, and even more researchers, engineers, innovators, universities, research labs and M/SMEs depend on being part of Interreg or Horizon 2020 research & development projects, which has an €80bn budget over 5 years.

The point is, EU funding systems are a bit of lottery. We might but in £14bn into the EU's budget, but what we get back depends on how good the bids are that we're a part of. We already get a disproportionate amount back (helped by world-class universities and research institutions), but some years we get a huge percentage back. It's a bit like investing in the Olympics, only with British science, arts and business. Most worryingly of all, no-one in government is offering to replace this money once current rounds have ended.

Therefore if we didn't want to lose both the money and these useful research, knowledge and creative networks and partnerships, relocation would be very compelling. Leaving wouldn't be some anti-British treachery, it'd be self- and business- preservation, in the face of a very close vote creating unsustainable conditions. Running a lean startup in London is hard enough and our businesses are built on relationships, confidence and finance.

So losing free movement is a killer, but what of a Norway or Swiss-style deal?

Losing our democratic influence in the EU

It's not just access to funding and job opportunities that's important for the creative & small business sector; it's a seat at the decision-making table across the EU. It is influence over the legislation we'll have to operate by, whether we're in the EU, single market or using a trade-deal. Legislation, obviously can work for or against UK interests. It might be copyright law, mobile roaming charges, internet governance, VAT or quotas for production - but in many cases there's a trade-off between business and social benefit. If we can't have a say in those decisions we've less chance of being sure rules that we'd be governed by under either a single market or a trade deal, work in our interests. For instance, not letting UK nationalise, say British Steel at times of crisis, because of EU State Aid rules makes a trade-off in favour of business over social need, there could be many more rules like that: the TTIP-style deal with America we could sign, for instance, might include having to open up the NHS to competition from US Healthcare corporations.

So of course the EU & EC seem clumsy, distant and inefficient; no-one denies it needs reform, but at least as EU members we have a say in the legislation we have to live with. If we're just in the single market, like Switzerland or Norway – or like Canada have a trade deal – we have no vote or say over our terms of trade. Britain loses democratic representation in the creation of laws with no influence on what the funding priorities should be for science/startups/social/infrastructure/communities/research/arts/films/etc. We have no MEP we can write to with our worries, ideas or problems.

No-one yet has managed to explain to me how losing that democratic voice is taking back control. Yet most Brexits being discussed seem to involve losing that democratic representation; the 'Norway kind of deal' that Jeremy Corbyn seems to be calling for, would only give us less control.

But, given the people have spoken, and all that, what am I calling for?

A new offer from the EU

Why don't we have someone leading a negotiating team to see what further concessions the EU27 would offer further concessions for us to remain in the EU with them? No-one seems to even be calling for that. Shouldn't we at least find out if there's a counter-offer to us leaving? Everyone seems to agree that if Cameron had got a better deal from the EU in February the vote would have swung differently.

It would save billions in Brexit costs – likely to be significant – when saving money was a clear factor behind people's vote to leave. Surely it's worth doing the sums and exploring? Not least given the problems for devolved Scotland and Northern Ireland in leaving the EU after both nations voted to Remain. 

Indeed, is the rest of the EU really happy to see the back of us? Doubtless many in the EU may want to try and make a new offer – if they avert Brexit the EU could emerge stronger and stabler, Germany balanced by another big economy, and the block having resolved it's first major breakaway crisis. Good relationships are built on resolving problems as they arise.

Preparing for an irrational Brexit

Still, there's nothing in the current discussions to suggest this is going to happen. The revamped 'Stronger In' has decided to build on the success of their campaign with a new 'Open Britain' campaign that seeks to scrap free movement. Seriously. So it seems sensible – for businesses and EU residents here at least – to make contingency plans for a possible irrational Brexit, as in one that only increases the problems it originally set out to fix. An Irrational Brexit may be 'taking back control' over legislation, but then losing democratic control over that legislation in favour of lawyers behind closed doors on a bunch of new trade deals; the savings in money sent to the EU could be less than the multi-£bn cost of Brexit & loss in tax receipts; or no extra money for the NHS but a US-UK trade deal that speeds up its privatisation and the end of it being free at point of use.

When a problem isn't resolved but worsened, sooner or later people figure out and begin looking for ever more radical fixes. An irrational Brexit, as may be on the cards, would deepen uncertainty and instability, and at significant cost. That might not happen so, for now, it's the national motto of Don't Panic, Look on the Bright Side, Keep Calm and Carry On Up the Brexit. But I've also got my eye on my own possible exit (a mexit?) if we end up with an irrational deal.