The secret of success for any free market economy is competition. Competition generally drives up quality, drives down prices and ultimately gives the customer more choices for their money. The same is true in the contracting market.
Trade barriers of any description upset this virtuous circle of competitive behaviour, because it gives some of the competition an unfair advantage. Give anyone an unfair advantage and they tend to get complacent and take their eye off the ball. So quality plummets, prices soar and the market heads for disaster.
These are sweeping generalisations, but you just have to look around you in both the public and private sectors to see how unfair competition, or upsetting the competitive cycle, has ultimately resulted in a poorer deal for the customer, which is usually us.
So, what’s the point of me boring you with my 30-second tutorial in basic economics? It’s simply this. If we prevent highly skilled, non-EU contractors from coming to the UK to work, and applying their skills on behalf of their clients, we are almost certainly going to cause major damage to our own contracting market.
Why is this? Well, to start with, expat contractors from outside the EU often have sought-after skills and unique experience. Plus, of course, they are frequently much more cost effective to hire than a UK contractor – and note I have been careful not to say cheaper, because it is not the same. All these are good things for the end-user clients. And for UK PLC.
The second key reason is that contractors in the UK should welcome being challenged by competition coming into the market from outside, as it will ensure they keep updating their skills and the value they offer end user clients. Keeping out expat contractors will, conversely, lead to a less skilled and more expensive UK market, possibly, in the long-term, leading to companies choosing to relocate abroad to where the skills they require can be found at the right price.
A free market economy with healthy competition can also work against an expat contractor in just the same way it can work against an indigenous one. If the expat is not very good at what they do, they will be found out, won’t get work and will ultimately have to go home or somewhere else. That’s an example of how the market can self-correct.
Protectionist policies, if adopted, would ultimately drive prices up and quality down. This was clearly the case in IT contracting during the booms years of Y2K and the later dotcom bubble, when demand far exceeded supply and even junior programmers fresh from university were earning £100k a year.
This is clearly not right, nor good for the economy. Competition from expat contractors? Bring it on!