Brexit Disaster for Contractors
If you voted to remain in the EU, you may think that there is at least a bright side to what you saw as a Brexit disaster. There may be less competition for UK contractors jobs from abroad.
That, at least, would be something.
You couldn’t be further from the truth.
Highly Skilled Migrants Programme
Although the Government has pledged to cut immigration, there is going to be no cut in the highly skilled migrants programme. Most of those coming in via this route, moreover, are into the IT industry.
They allowed in around 30,000 a year.
However the Chancellor has announced that he “cannot conceive of any circumstances” where skilled workers from abroad would face any curbs on coming to the UK.
That sounds very definite. He hasn’t minced his words there.
Falling Rates and Number of Contracts
This has caused the number of contract jobs to decline and also contractors’ rates to fall over the years.
Many older contractors say that the contract market is not what it used to be in terms of rates.
It used to be that when companies couldn’t find enough permanent IT workers they would then get contractors. Now, many of them take overseas IT workers before contractors.
Permanent Worker or Contractor
A Government minister at the time, I think it was the infamous Dawn Primarolo, said that companies should first decide if they want a permanent worker or a contractor.
If it is a permanent worker they want, and couldn’t get one in the UK, they could then choose a foreign IT worker ahead of a UK contractor.
This highly skilled migrant worker’s programme is unilateral.
They haven’t negotiated a similar scheme with the EU.
So, they’ve given up a whole host of IT Contractors’ jobs in the UK to both non-EU and EU skilled migrants. That’s without asking for anything in return.
Brexit Negotiations
So, much for Theresa May not wanting to show her hand before Brexit negotiations.
She, and her Chancellor, appear to have made an exception for UK contractor jobs.
The main challengers for UK contract jobs have always been those pulled in by the highly skilled migrant programme from outside the EU. India has been the main country that they have come from.
Contractors Coming Home
As regards the EU, it has always been the case that more UK IT Contractors work in the EU, where they are highly popular, than EU contractors work in the UK. Many get higher rates than those at home.
Now those EU workers can continue to come to the UK to work whether or not the EU offer Britain something similar in the Brexit negotiations.
The UK Government has already given away that negotiating chip.
Any agreement for highly skilled workers reached in any Brexit negotiations, would likely be for permies, anyway.
So, it looks like all those contractor working in he EU will have to come home again and compete in the UK contract market.
More Contractors Competing for Same Number of Contracts
When you add that to the highly skilled migrants, who will still be allowed to come in from all over the world, including the EU, that will be a lot more people competing for the same amount of jobs.
This will mean less contract jobs available for UK contractors.
Because of the economic laws of Supply and Demand, it will mean that rates will have to fall.
Let’s hope that there will be other factors that will counterbalance this.
However, Brexit will have no silver lining for UK Contractors after the Chancellor gave away ther jobs without even asking for anything in return.
Where are contractors’ group IPSE in this Brexit disaster for contractors?
If you know anyone else who would find this article useful, please share it with them using the social media buttons at the top and bottom of the page.
Ad – Contractor Services
If you think you can benefit from using an umbrella company, try the following:-
Public Sector Umbrella Company
Or do you need some professional advice on which umbrella company is right for you? Fill out the form below to receive expert advice.
For all necessary business insurance, including IR35, try Business Insurance for Contractors
