Another Country Needs You (but so does this one)

It is enough to make Lord Kitchener turn in his grave. On the one hand we have Paymaster General, Dawn Primarolo, peddling the line that rumours of businesses closing down or moving overseas because of IR35 are put about by 'silly contractors' who are exaggerating the position. On the other hand, the Government seems to have woken up and suddenly become concerned about the skills shortage. E-envoy Alex Allen is so concerned about the exodus that he is formulating a plan to present to Government to entice up to 100,000 IT specialists back to Blighty.

The PCG has today launched a service to register these 'extrapreneurs' – a term coined by a UKTECH reader to describe independent contractors now working abroad. This is the first real effort to collate statistics on this issue, and if done correctly, will surely supply PCG with a solid statistic that not everyone in Government can ignore. The aim is to show the detrimental effect of IR35 and the increasing burden on small businesses.

But will the e-envoy be able to halt the exodus?

It seems not. (Partly because "on the ball" contractors have spotted an opportunity to leave – and then be incentivised to come back - even though they did not want to go.) More importantly however, the Government has seemingly failed to recognise once again that even the smallest companies are playing in a global market place these days.

For years Britain's engineering contractors have felt the squeeze of competing in a global marketplace. More recently, many IT contractors are up in arms over the issue of 5% allowable expenses – leaving little money for training expenses when they need to keep their skills right up to date to compete globally. For IT specialists in India, Pakistan, Russia and Eastern Europe, the opportunities have never been so numerous. They are sought after globally. In the flexible economy it is not always a simple case of "have laptop, will travel". More and more, low cost Internet workers do not even need to move to Silicon Valley or the other high growth hot beds. Jobs come to the workers too – in recent weeks Germany, France and Italy have all cut tax rates to attract foreign investment and jobs.

Nevertheless, globally workers are seeking out the best outlets for their talents. The best flexible workers will go to where they can find the best flexible jobs. Perhaps from a different starting position, Britain now shares the same concerns as India and Pakistan – too many (IT and engineering) workers are leaving to sustain domestic growth.

Perhaps the combined efforts of the e-envoy and hard evidence will help the Government to see sense. Perhaps some sense will stop two officers of the same Government simultaneously penalising and incentivising the same people. Otherwise, our guess is there will be more contractors heading abroad to the tune of "pack up your laptop in your old kit-bag."

Overseas readers are encouraged to register at the PCG Gone Abroad page

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Mark Roderick