Government warned of 'exodus' of tech companies from the UK if Investigatory Powers Bill is passed

Tech company announces withdrawal from UK over government security plans - and warns that more will follow

Software vendor Eris Industries has announced plans to withdraw from the UK and called its staff back to its New York head office over government plans in the new Investigatory Powers Bill – formerly dubbed the Communications Data Bill – to impose backdoors in encryption products and services.

The company makes free software based on Blockchain intended to be used in "smart contract technology". It claims that if it were forced to comply to the demands of the legislation it would cripple its business, and has therefore announced plans to close its UK offices and relocate staff out of the UK.

"Eris Industries' business is industrial cryptography. This legislation, if passed, is likely to prevent our technology's use in myriad industrial applications, including financial services, which need reliable, open-source cryptography desperately if they are to stay competitive in a digital age," claimed the company's chief operating officer and general counsel, Preston Byrne, in a blog post.

He continued: "The proposals contained in the Queen's Speech were first introduced by the Conservative component of the coalition government in January of this year. In response to these proposals, at the time Eris Industries promised we would leave the country if the proposals were introduced as legislation."

Byrne said that the powers that the government was seeking under the new Bill were "completely unnecessary" and based on figures that seemed to have been made up. He furthermore warned that if the Bill were passed, more companies would leave the UK than submit to the Investigatory Powers Bill.

"If this Bill is passed into law, we are likely to see a mass exodus of tech companies and financial services firms alike from the United Kingdom," wrote Byrne, adding that the company had already ordered its staff to leave the UK until the situation becomes clearer.

The Conservatives pledged to re-introduce the Communications Data Bill - again - in its election manifesto after a combination of the House of Lords and coalition partners the Liberal Democrats scuppered the last attempt. Plans for a new Communications Data Bill - now known as Investigatory Powers Bill – were made almost as soon as the Conservatives won the last election.