Private Eye links IR35, work permits and EDS in 'EDS they win'

Throughout the entire IR35 debacle to date, the coverage of the subject in the satirical publication Private Eye has been notable in its absence.

Issue number 1024 (23rd March - 5th April) went some way to rectifying the suspicion that Editor Ian Hislop had been instructed by Government contacts to ignore the story.

On page 26, under the banner "EDS they win", and accompanied by a fetching photograph of Paymaster General Dawn Primarolo, the 450-odd word report details the apparent connection between IR35, the Government's Fast-Track immigration work permit scheme, and the US-based consultancy and facilities management firm, EDS.

Referring to the recent Judicial Review, IR35 is briefly described as a "measure that forces (contractors) to pay higher tax and national insurence for any job lasting more than three months, and thereby subjecting them to the same tax regime as full-time employees without any of the benefits." Reference is made to the PCG's counsel, Gerald Barling QC who contended that whilst the Inland Revenue insisted that contractors were only competing with the permanent employees of service companies and in-house IT staff, they were also small businesses competing with large service providers, such as EDS.

After referring to the Paymaster General's reluctance to accept that IR35 is driving contractors to seek work overseas, the article continues in describing a "marvellous example of joined-up government" relating IR35 with the Government's Fast-Track immigration scheme. The scheme is summarised as a means to allow IT firms to recruit cheap overseas workers (quoting from the article) "presumably to replace home-grown contractors."

As an example of what happens when a political journalist turns his attention to the subject of IR35, the Private Eye article then reveals an otherwise unknown fact; a Department of Education and Employment (DfEE) report made by its information technology communications and electronic skills strategy group in 1999 recommended that the process of recruiting staff from abroad should be eased, for specific occupations (i.e. IT.) The chair of the strategy group was none other than Alan Stevens, of...EDS.

The article asks "the Inland Revenue's insistence upon a tax which benefits EDS among others is surely unrelated to its ten-year "strategic partnership" with the IT giant?"

The final paragraph refers to Rabinder Singh, a member of the Inland Revenue's defence team at the Judicial Review, who together with Prime Minister's wife Cherie Booth, set-up Matrix Chambers last year specialising in providing legal services for the new Human Rights Act. The article concludes with "no doubt Mr Singh is defending the human rights of large technology companies such as EDS to boost their profits still further when the opposition is taxed out of the market."

Brendan Newport