Furious Contractor Backlash
Tory attitude to IR35 provokes a furious contractor backlash.
UK Freelancers and their representatives all over the land have reacted furiously to the existential threat posed by the Conservatives. Chancellor George Osborne has threatened their profession and their lifestyle.
The Conservative Government have had stories placed in the Guardian and the Mail. These say that intermediaries will be abolished, e.g. umbrella companies and personal service companies for contractors.
Any contractor staying more than a month at one company must be put on the payroll of that company.
How dumb is that?
Why Companies Use Contractors
One of the reasons that companies want to use contractors is becasue they are not on their payroll.
If a company has an IT project they will have more work than their current staff can cope with. They may also not have the experience in the skills to be able to do that work That’s if they are building the project using new more up-to-date skills than those used on current systems.
However, they don’t want to take on a whole load of new permanent people to do the project. When the project ends, they won’t need them all any more.
So they use contractors who bring knowledge and skills to their projects, who teach their permanent staff those skills and who will then leave the company after the project has ended. They will not leave the company with overheads.
This has worked very well across the country.
All sides were happy – till now!
Contractors to Go On The Payroll
Now the Conservatives, under George’s Osborne’s mooted proposals, want companies to take these contractors on as employees.
This will create chaos.
George Osborne reckons that it will bring in £400m worth of extra tax.
How would it do that if companies cut the number of contractors that they take on, as they don’t want to take them onto their books?
Contractors Turning Against Conservatives
Contractor’s Group IPSE (ex-PCG), who have always been perceived as being pro-Conservative, have reacted with fury to the Chancellor’s proposals.
Chris Bryce, the CEO of IPSE, has asked contractors to write to their MPs about it and they have even created a letter for them to use on their website.
Said Bryce “IPSE really needs your help to stop our businesses being destroyed and the world of contracting being changed forever.
“We will continue to fight on your behalf so that you can continue to do what you do best – run your business as a business and not a cash cow for Government.”
IPSE and the Conservatives
Of course, if IPSE had really been an effective force in the fight for contractors, the Conservative Governemnt would not have dared do this.
They must see IPSE as pussycats to dare to pull off this stunt which will decimate the contracting profession completely.
I say ‘decimate’ but it is even worse than that.
The word ‘decimate’ comes from an old Roman practice where they used to kill every tenth soldier of a legion who lost in battle.
The estimate is that the Chancellor’s changes will affect 9 in 10 contractors and not one in ten.
Contractors are Traditional Tory Voters
Many contractors have traditionally voted Tory but they are now reassessing this.
Indeed one major opinion former in the contracting industry told us yesterday “I resigned from the Conservatives last week over this. My local MP called me up.
“I told him why and he gave me the usual charming bollocks which sounded good at the time, but was, of course, nonsense!”
He may not be he only one. There could be IT Contractors resigning from the Conservative party in droves across the country.
Freelancer and Contractor Groups
Other freelancer and contractor groups are all coming out against the Conservatives’ proposals and trying to find out more about this existential threat.
Contractors have not been so furious since New Labour brought in IR35 in 1999. It caused many contractors to turn against the New Labour project.
Now, with their profession and income under serious threat from the Conservatives, it looks like many IT contractors, of which there are hundreds of thousands across the country, are preparing to dump the Conservatives.
Add to that all those who are self-employed in one way or another (almost 5m) and the Conservatives may see one serious backlash.
They were supposed to be the party of business. It looks as if they are just the party of big business as they abandon small businesses to their fate.
While cutting taxes for the big boys they just see contractors as tax avoiders.
They will find that there are a lot more small businesses than large businesses.
They will be hit electorally by this furious contractor backlash.