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A Politically Incorrect View of Outsourcing

I am beginning to wonder when the BNP will add IT outsourcing to its list of manifesto promises.

New Labour has never been a real friend to the domestic IT industry, preferring to seek the company of the handful of American giants than support the efforts of the thousands of small companies and contractors that take the lumps of tin and the expensive code and turn them into the systems that UK business relies upon.

First of course, there was IR45 and then last month, the Inland Revenue decided to interpret an unknown piece of eighties legislation to the disadvantage of husband and wife companies in both the entertainment and the IT industries. Roughly speaking it says that if the husband does the IT work and the wife does the accounts and all the important other stuff, then she is not an equal partner in the company and should be taxed differently. This is of course quite contrary to the divorce legislation and quite possibly sexist too.

I will not go into the details but I am sure you can guess what the implications are. It is hard enough for the small companies I know in IT to make money and the Treasury appears hell-bent on squeezing the survivors of the present recession out of business.

People feel strongly about such things and it’s not just unfair treatment and taxation. Outsourcing as a topic of conversation among IT professionals is becoming almost as emotive as immigration and invariably, the two subjects collide, as happened this weekend at a party I attended at the home of one of the UK’s wealthiest IT executives.

Computer Weekly has already reported this week that the National Audit Office is to examine complaints surrounding the IT work permit scheme and the only surprise to me is how long it has taken them to realise that there was a problem.

At a time when unemployment among the domestic IT workforces is at record levels, there are numerous complaints that employers are breaching work permit regulations by replacing British IT workers with lower-cost Indian contractors who do not qualify for pensions or National Insurance contributions. Are you surprised? Of course you aren’t.

Our Government is issuing record numbers of work permits to overseas IT staff and it was only a year ago that one of the largest of the foreign contracting companies invited me to a meeting in London to see if I might be of help to them in developing their presence in the public sector. What surprised me in that meeting me were the names of the company’s alleged ‘friends’ in government and their level of authority.

If I’m honest, I would say that we will continue to outsource our domestic industry into partial oblivion unless someone takes a strong hand and starts asking questions. Not so long ago, one MP said to me something along the lines of:

Listen, my constituency has several powerful and well organised lobbies with an interest in the Indian subcontinent. If they want me to talk about Kashmir or work permits or Indian IT, I do as I’m asked because if I don’t, then I won’t be around for the next election”.

So there you have it, whether you wish to believe me or not. A politically incorrect assessment of the problem. Our own IT workforce is threatened by a much larger and well-organised agenda, which is invisible to the ordinary contractor and is really about another country’s national interests and the influence it wields both politically and financially where it counts most.


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