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Three years ago, my experience was from the commercial world. Travelling around the world selling military patrol craft to foreign Governments, I was well aware of the need for political finessing. At the same time I had helped build a business that this year will turn over close to £75 million, so I was well versed in making things happen.
It was obvious. The Government had made a mistake; IR35 was going to damage a crucial part of the UK’s small business sector; we needed to make them understand that; they’d realise their mistake and change it. Surely no Government would want to actively damage entrepreneurial spirit.
The Fast Track Visa issue was equally clear. FTVs were brought in the country to meet a skills shortage – with tens of thousands of contractors out of work, it was obvious there was no shortage. We needed to demonstrate it to the Government, they’d realise the problem and change the list.
Two issues; two campaigns – and two very different outcomes. So what was the difference? Did we get one wrong and the other right – or were there events and factors which were outside our control?
IR35
There is no doubt that we learnt lessons from IR35 and there are things we’d do differently – but also the odds were stacked against us from the start.
Having been a contractor and from that helped fund a successful business, I felt that IR35 would prevent others from doing the same. At the time, I was about to launch jobs board at a time when the "dot.com" bubble was building and I had spent a year preparing for this. I could not believe that not one newspaper or e-zine had picked up on this obscure Inland Revenue press release No 35 and decided to get on the modern equivalent of the soapboax. I transferred my intended jobs board website into a ‘news site’ originally engineerjob.com – now Shout99 – and within a matter of weeks 10,000 people had registered.
Initially I thought that there might be common ground with other associations who had an interest in contracting matters but it soon became clear that if we wanted representation we were going to have to do it ourselves. I’d organise the campaign if there were 2,000 people willing to join a group – which we later called the ‘Professional Contractors Group’. I recruited a lobbyist, a press officer and a geologist who was looking for a career change into web design and I promised to personally underwrite their costs.
So the campaign was underway. In summary some of what we considered to be our strengths were also our weaknesses. But we punched well above our weight and landed a few blows.
1. It was too late. When the Chancellor announces a policy the ink is usually dry on it. We needed to be in at the time they were thinking about it in order to influence their decision-making. We needed to be walking the corridors and – have relationship of trust with the advisers and civil servants behind the scene.
2. It was political. The Minister responsible was Dawn Primarolo who had earned her nickname as Red Dawn. A tough and determined Minister who in the past had been prepared to go to jail for her beliefs. We came out of nowhere and with little time to build relationships (We had a window of opportunity of no more than two months) positions became entrenched. Especially when the next point is taken into account.
3. Cyber-terrorists. The PCG had come from nowhere with no track record and no reputation. While the vast majority of the members of the PCG who participated in the campaign made well-reasoned and balanced arguments – one or two contractors chose to make threats, including a death threat, and hurled abuse and vitriol at MPs, the Minister and the Civil Servants. This gave the Government moral ascendancy and they frequently tarred us all with that brush. It also did little to win hearts and minds amongst back bench supporters.
4. High visibility. As there was little sympathy and even less knowledge about IR35 and contractors we had to raise our profile. Susie Hughes, our press officer, took this obscure tax measure and made it front page news. Those cuttings were hitting Dawn’s desk daily.
5. Lack of track record We made up for our lack of history by forging coalitions with the IOD, CBI, ICAEW, CIOT, FSB and several other trade bodies. We co-ordinated joint letters to push for consultation. Our pressure allowed these more established bodies to push for changes behind the scenes. Although they seemed relatively minor at the time it will become clearer with time how important these changes were.
6. Grass roots. Contractors were prepared to stand up and be counted at an individual level. They flooded MPs mail bags and their surgeries with stories of their personal experience and how IR35 was going to affect their businesses. Close to a thousand went to the House of Commons in one of the biggest ever "green card" lobbies to tell their MP in person of the problems with IR35. This was necessary to keep the pressure on at grass roots level and in fact this obscure tax measure became one of the main issues being raised with MPs.
Fast Track Visas
Our approach to the FTV campaign was very different. To a certain extent this had the potential to blow up in our faces more than the IR35. It was easy to see how the Government could play the racist card. From so-called ‘tax cheats’ to ‘racist’ in one small leap.
SHA with Philip Ross taking the lead advised PCG to take a low key approach. Letter writing to MP’s can often result in a PQ (parliamentary question) from which the opposition can score points and the danger is that it would push the Government into an entrenched position
PCG realised that what we needed was consultation – we needed to be at that table. If we could manage that, then we would be ‘inside the tent’. On IR35 the main thrust of our campaign was to get consultation. In addition we had seen with IR35 the importance of building consensus amongst trade groups with shared interests. We built on this experience and worked hard to understand how we could help other groups achieve their objectives and at the same time isolate those with opposing views
So what were the differences?
1. Representation: This time PCG recruited the services of someone who spoke their language. Philip Ross had contested a Parliamentary seat on behalf of Labour, though hehad not shied away from criticising their policy on IR35. He also worked well with Gurdial Rai who had been a lone voice on this issue for some time.
2. Timing: The clock was ticking with IR35 with a House of Commons deadline to meet. The FTV was an on-going consultation.
3. A seat at the table: There was an established consultation process with clear rules of engagement. PCG had a seat at the table and were able to influence it from the inside.
4. Reputation: PCG had a profile and reputation – not always good, but at least people knew us.
5. Political. This was a civil service driven procedure rather than a Ministerial driven policy.
These differences resulted in a significant result at vastly lower cost for members, Government and UK Plc. I would estimate that in the first year of IR35 at least 1000 contractors had engaged their creative ability to defeat IR35 rather than invent the next "big thing". The lost opportunity cost was enormous and measured in the tens of millions of pounds.
This time the combination of an established brand, experienced Public Affairs team, working within a consultative framework, delivered real change for less than the price of a Cabinet Ministers salary.
PCG is the only Trade Association representing IT and Engineering contractors. The message, (in marketing speak; the "brand") that members delivered in the fight against IR35 was that they were not to be messed with. Their views were to be respected and taken account of.
Without this reputation the success on FTV could not have been delivered. As the new PCG public Affairs team takes shape under the leadership of Gareth Williams, we wish them the best of luck in continuing to build on this successful brand. I would also like to thank the PCG members in the first year who joined with no thought, but to have a go at defeating an unfair tax and by doing so helped deliver a victory three years later.
They should feel proud of their efforts.
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Andy White
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