Brave contractors will vote ‘leave’ on June 23rd

Like many of you wondering which way to vote in the EU referendum on June 23rd, I have been absorbing a surfeit of ‘stay’ and ‘go’ propaganda - filtering most of it as disingenuous. Overall though, I find Brexiters to be the most reasoned and convincing, writes Mike Phillips, a director of overseas contracting advisory Its international.  

‘In’ & ‘out’ getting us ‘down’

Some of our closest contacts who are British contractors, recruiters and clients across Europe have quietly shared with us their growing frustrations with politicians, institutions, central bankers and ‘respected’ commentators using fear and manipulation to capture our votes in this month’s referendum.

In my view, none of these groups should be proud of their track record in controlling markets and global economics. Indeed, this was a point well-made by Queen Elizabeth when she visited the London School of Economics in 2009 and enquired: “Why did nobody see this coming?”But there are others too in this EU debate -- trade bodies and industry leaders who, while not intending to mislead, are clouding the issues with arguments that don’t entirely stand up to scrutiny.

Brexit and business

For example, we’ve heard that uncertainty around a possible Brexit isn’t really having a significant impact on the IT micro-business landscape. Well, Rich Pleeth, co-founder of friend-finding app Sup, who had his funding pulled because of EU jitters, will likely disagree. And I too disagree with some of the gloom being cast over your future if you go contracting in an EU country in the event that the UK gives up its EU membership.

More on that later because, however important the ‘in’ or ‘out’ EU question might feel to ContractorUK’s readers, among the “higher than expected” likely turnout on June 23rd, contractors, contractors’ service providers and contractors’ recruiters will represent just a small chunk.

A bigger presence at polling stations will be businesses owners, ranging from one-man bands and PSCs to SMEs and corporates. Well, a Brexit-winning referendum will mean that all EU directives and regulations directly binding on the UK, its citizens and its companies will no longer apply. If you’re a business owner, you know that represents a respite that it is not before time! So be reassured if you’re backing Brexit because if you get your way next month, the UK government is going to be free to repeal or amend all EU-sourced frameworks, including the likes of the Agency Workers Regulations.

However, it should be recognised that continuing to access the single market will likely require voluntary compliance by the UK with most existing and future EU directives and regulations. In practical terms, the UK authorities are not resourced to implement and manage wholesale change.  But will Brexit make it more difficult for British contractors to operate in EU countries?

Contracting post-Brexit: the same, better and undisturbed

For many years, end-clients across the EU have preferred to source required project skills locally, rather than engage expatriate contractors from other member states. Their logical aim is to mitigate any language and cultural barriers, as well as expect to pay lower fees. Irrespective of a Brexit victory, this practice is likely to solidify. To ‘encourage’ the use of local skills, more and more member states have been insisting EU expatriate freelancers (not just British individuals) obtain certain registrations before entering their country of work.  For example, the Austrian authorities require them to obtain a Police Clearance Certificate and a Trade Registration before arriving in the country. 

That aside, a Brexit is unlikely to interfere with demand from many EU member states for British contractors offering skills which cannot be sourced from within the EU.  Although there will be new immigration protocols (such as entry visas and/or work permits) set by each EU member state, these are likely to be ‘fast-track’ services probably obtained online. This is why I don’t subscribe to the downbeat view that if you, a contractor, want to freelance in an EU country after a Brexit, it’s going to be burdensome. However, freedom of movement for British contractors on EU multi-country projects is likely to be constrained by new immigration protocols. 

Positively though, existing Double Tax Treaties and Social Security Agreements between the UK and individual EU member states are unlikely to suffer radical change following a Brexit. One concern we’re hearing is about the EHIC (European Health Insurance Card), which is usually obtained by British contractors before working in Europe and by British citizens going on holiday in Europe. The EHIC covers immediate, clinically-necessary, state-funded treatment until the holder’s planned return home to the UK.  It also benefits Europeans on a temporary work or holiday stay in the UK.  Fortunately, this ‘mutual’ benefit is unlikely to be at risk (although it is the case that a fresh reciprocal agreement will have to be created). 

It’s (not) the economy, stupid

Wrangling on the detail of that agreement is an example of why, ultimately, Brexit looks primed to be a political issue for the EU Commissioners and state officials, far more than an economic issue. Whatever post-Brexit agreement you’re thinking of, if it’s too soft on the UK, it will encourage fringe EU members states to seek their own exits on similar terms. Conversely, if the EU Commissioners are too tough on the UK, existing business between the EU and the UK could be irreversibly damaged. Such an outcome, almost regardless of the type of agreement and whether it is to do with trade or travel, could reduce contracting opportunities for British contractors in Europe post-Brexit. If too many unpalatable agreements emerge, only then will Brexit make enterprising recruiters in the UK turn their attention to the newly-freed markets outside of Europe. It is then that agencies will encourage their highly-skilled British candidates to venture in this exciting non-EU work arena, which is too often overlooked and so remains untapped.  

But let’s get back to the big picture. Most people will arrive at their polling station on June 23rd feeling uninformed about the issues. Their vote will be cast more from solid emotion rather than a firm grip of the relevant issues. Economies are not high-performance engines which can be mechanically adjusted to power Formula 1 cars. They are highly complex structures with too many shifting, independent parts to control. It is because it’s a case of politics first and economics second – a distant second - that when you come to reflect on the first weekend following the referendum, you will find that the result will not be as vital as we are currently being led to believe by the mainstream press.

Fear, blame and bravery

As regards your own modus operandi, if you do wish to contract overseas in the EU and there’s a Brexit, then fear not. The world of international contracting will keep on spinning and we will all carry on managing the ongoing flurries of statutory change.

Here in the UK as a contractor, a Brexit will mean that your government cannot continue blaming EU Commissioners and faceless EU bureaucrats for constant additions and amendments to legislation. So your British government will become truly democratic and wholly accountable – a truism that a Brexit will bring and one which this country is long overdue. At the time of writing however, the bookmakers are backing the UK to ‘remain.’ As the old adage goes, “it’s a brave man who bets against them”, so I for one will be summoning all my courage on June 23^rd to defy the odds; and for the future health and prosperity of our country I suspect many contractors will do the same.

Editor’s Note: Related Reading –

Why the EU’s contingent worker laws won’t worry contractors
IT contractors won’t defy Cameron on Europe
Contractors favour UK staying in EU