A key figure in Britain’s tech industry has warned that Britain’s Brexit breakdown is harming the sector.

Giles Derrington, head of Brexit policy at trade body techUK, told a Westminster select committee that investors are beginning to shun UK tech start-ups amid the uncertainty.

The two candidates to become the nation’s next Prime Minister, Boris Johnson and Jeremy Hunt, have both said leaving the European Union without a deal is a possibility.

Derrington said a no-deal Brexit would threaten the UK’s reputation as the “obvious global hub” for tech investment outside the United States and that the sector is already suffering “reputational damage”.

“Lots of people who work in tech are very internationally minded. What we are seeing, rightly or wrongly, is the reputation that the UK is somehow closing itself off from the rest of the world,” he said.

A recent KPMG report revealed a 57 per cent drop in the number of successful venture capital deals in Britain in the first three months of 2019. However the value of the deals was similar to that seen in the first three months of 2018, at £1.19 billion.

Derrington said Britain’s VC funding is down 20 per cent on two years ago, while investment in nearest rival Germany has climbed 30 per cent in that time: “The gap is closing.”

However he added: “Tech is still a growing sector; the UK is still a very good place for tech companies and therefore there will still be tech investment.

“The question is the scale and level of that investment compared to what it would have been.”