6

Dr Jayne Hamilton, IT Services Freelancer – Written evidence (FTS0006)

Introduction

This report, using my own personal case study, provides answers to 3 of the questions posted by the sub committee.

       What is the impact for trade in services of the UK and EU reaching a free trade agreement?

       What effect may national reservations to the UK-EU Trade and Cooperation Agreement have on trade in services with the EU?

       What effect will arrangements on the mobility of professionals have on trade in services between the UK and EU?

The trade deal is a 'trade restriction' treaty in several ways.

IT Services by Freelancer (Independent Professional)

Jayne Hamilton - Senior software developer/architect (Java, JEE, Open Source, integration, niche technology)

Msc in Computing Science (Newcastle University), BA  Spanish and Latin American Studies and PhD background in European languages (fluency in Spanish, Portuguese, Dutch, German and French), based in Northumberland near Newcastle. Freelancer in UK+ mostly EEA since 2005 (NL, Germany, Switzerland)

Business sector experience (banking, aviation, telecoms/internet, retail, digital, public sector)

Unique combination of business/technical skills plus languages won roles ahead of competitors.

Niche nature of work entails changing countries per project

In a letter to the New European, 'Brexit is a career killer for freelancers, 8 January 2018,  I wrote:

'While companies export products, we freelancers export ourselves. The freedom of movement and work in the single market is vital for us.

I am an experienced software developer with fluency in several languages. It has taken me over 12 years to build up my network and clients. Many of them are in Germany and the Netherlands. My languages in addition to technical skills often secure me a contract and allow me to fend off tough competition. For example, a trading system I developed for Deutsche Bank which required programming, banking experience and Portuguese language skills.

Unlike application processes for permanent jobs, the customers and agencies usually need freelance candidates fast, sometimes within days. It would be impossible for us to wait for work permit applications to be processed. Work permits would involve extra costs. Candidates who cannot offer a fast start date face rejection, even when their experience is a perfect match, unless the project has the luxury of waiting for a candidate to become available. Remote work is not always possible and some clients require you to be present in the office at least four days per week. Secure sites in banking or defence often restrict contractors to office-based positions.'

Senior developer prices are 70 to 85 euros, 110-120+ CHF p.h, senior developer/architect higher. Despite belonging to an exempted category for trade in services, the Brexit Deal places large restrictions on trade compared to what we had from the single market:

• Financial loss. Rates in Europe are a third more or double those offered in the UK
• For professionals with European language skills, deployment to EEA projects is essential to leverage the candidate's full skill set to the project offer, ensuring a higher degree of success when tendering.
• Loss of knowledge exchange and experience in a fast moving industry. (Working on projects in Europe is not just about the financial rewards. It is a major source of new knowledge, experience and collaboration which may lead to:

     entry into a new technological area

      gaining specialist business sector knowledge

      spark off  innovation for new services/products

    allow us to bring skills back into the UK or another host country

• Cut off from client/agency contacts established over 15 years due to the ambiguous wording of the deal and time limitations it sets (12 months maximum). Establishment of a profile on various European freelancer websites is time consuming as is networking. These contacts are rendered void by the current deal.
• Impact on regionally based freelancers is harder – London/SE centrism means anyone based outside of the area has little chance of pulling roles in comparison to local candidates, which is why regionally based professionals  tendered on the EEA market.
• Increased travel time and cost to sites - Access to European locations via regional airports is cheaper and faster than for sites in the SE, which take up to 7 hours to reach, sites in the SW 6 hours. Flights to Europe 1 hour to 3 hours with transfer.
• Loss of self – I am no longer allowed to be 'myself', the person /professional I had become over 25+ years via school, university/experience: to my full capacity. Freedom of choice removed, also having to restrict personal visits to the EEA in order to save 'work days'.

(* similar points for developers employed by UK services co, e.g. Accenture, => corporate loss) 

Brexit Deal Restrictions 

Business to business service provision: direct clients, agencies, and brokers

If the deal refers to pure business to business work it restricts my market to between 8% to 10% of what it was even if I am in the excluded  category for a work permit requirement

• Business to business contracts are permitted, but no agency work.  Most independent professionals, myself included, source up to 90% of project work  via agencies. Urgent clarification is needed. The current deal evidences that the government misunderstands how the IT industry works.
• Customers are under time pressure and use agencies instead of their own HR
• No clear difference is made between a (contract) broker and an agency.
• What of hybrid companies which are both IT services companies which offer recruitment services such as Gulp in the DACHs market of German speaking countries?
• Right of establishment in countries where a local registration is required to use any portals for tenders setup by a direct client or a broker on their behalf is  hampered as UK citizens are now TCNs.
• In the Dutch and German markets, some customers, who fall under country specific legislation, may insist that the consultant falls under terms which are akin to British IR35 and go onto payroll (ANU setup in Germany, Wet DBA in NL). In this case, the candidate is forced to work via an agency scenario and those projects will not be accessible without a work permit, even though the end-client is in a country which would normally exempt the professional from a work permit.

Contracting demands a fast turnaround, candidates must be available in 2 weeks, maximum 1 month

The EU blue card only applies for projects which last for 12 months or more and restricts the professional to payroll only as an ' employee'.

National country restrictions further restrict my former pre-Brexit market.

Differences in country criteria within the deal compared to what we had means I am cut off from some projects (re work permit issue), including but not restricted to:

• Denmark
• Belgium.

I had a nascent market in Denmark, with several agency contacts and one Danish IT company for which I worked in NL. Denmark is the source of many banking projects for customers like Nordea.

Benelux IT firms often have project roles in another country in the Benelux, (Business would arise via the Dutch office of the company for roles in finance, telecoms, and public sector)

Some clients require work in more than one city, such as ING as it has offices in Amsterdam and Brussels.

As a third country national, where work permits are required, I may be blocked from applying for contract work, contract terms demand a consultant has right to work or fines ensue.

It takes 2 weeks - 3 months to process work permit applications.

Agencies or customers have to advertise the role for 8 weeks in the EEA and prove that no suitable candidate based in the EEA was found before a third country national may be put on the project.

British contractors: time limitations on our shelf-life

The Brexit Deal limits us to 12 months of service on site. the shorter shelf-life puts us at a major disadvantage compared with our EEA competitors: Some clients have rolling contracts and many programs go on for longer than 12 months, in particular transformations to cloud technology/microservices, greenfield developments, transformation from host/mainframe to a modern technology stack The norm before corona restrictions meant 4-5 days per week on site,

Practical challenges

What do we have to show on visiting countries (contracts, letter of invitation, forms?)

How will we demonstrate that we have the right to serve in a country for 12 months?

Practicalities of agencies and clients implementing the Brexit Deal

1. Uncertainty about the rules means that many agencies based in the EU or UK  ignore British candidates unless they are in the country now under the Withdrawal Agreement.

2. Uncertainty about the  rules mean that agencies require EU/EEA citizens only on adverts.

3. Customers are wary of data equivalence, which might not be the same as GDPR and data protection under EU law.

Brexit deal exemption categories for independent professionals and contracted service suppliers

In general, there is a difference made between contracted service suppliers exemptions (employees) and independent professionals. The former requires 3 years’ experience and a degree; the latter 6 years’ experience and a degree.

Within technology, it would be feasible for a highly talented graduate to take on freelance roles after 2 years of experience as an independent professional. Those individuals are blocked from the exempted category by the deal unless contracted employees.

Switzerland

This is a separate trade agreement with the UK. However, professionals operating in Europe in general, especially in the DACHS market of the German speaking countries, are impacted by this deal.

1200 L permits are made available throughout the Cantons for temporary workers. (3500 B permits exist for permanent jobs and in some cases longer projects of over 1 year).

The 90 days per year are specifically intended for services providers.

The Swiss system disallows in most cases use of a UK limited for services provision on site and in practise requires freelancers to go under a Swiss payroll.

Before Brexit, UK nationals would be guaranteed an L permit or B permit if they sourced a project. Swiss agencies now include restrictions in adverts to candidates from the EU/EEA and current residents only.

Impact

The treaty allows for limited work. However, agencies and customers have been put off British candidates due to the entire Brexit process and its uncertainty since 2018 and this has been reported in The Guardian (See References, John Henley, CVS at Bottom of Pile , 2018).

IT is any industry which is not impacted by the corona virus pandemic to the extent of other sectors. Rather it is the Brexit deal arrangement which makes it extremely hard to get into the European tender processes for project work.

Contract adverts stated: Schengen passport holders only, EU passport holders only already in 2018.

Over the years, I have collated several examples from project portals.

I estimate that Brexit uncertainty and Brexit deal related restrictions have already cost me well into six figure sums.

Publications

Jayne Hamilton, ‘Letters: Brexit is a career-killer for freelancers like us’, The New European (8 January 2018), https://www.theneweuropean.co.uk/brexit-news/brexit-career-killer-freelancers-23236

Jayne Hamilton, ‘Mobility Frameworks for Services, Jobs and Projects: the Covid-19 recession life jacket’, North East Bylines (27 July 2020)

https://northeastbylines.co.uk/mobility-frameworks-for-services-jobs-and-projects-the-covid-19-recession-life-jacket/

Jayne Hamilton, ‘Shorting the Tech Sector – With state aid we’ve got it made: technical misnomers’, North East Bylines (14 September 2020)

https://northeastbylines.co.uk/shorting-the-tech-sector-with-state-aid-weve-got-it-made-technical-misnomers

Interviews

Brexpats Hear our Voice – In Conversation With

https://www.youtube.com/watch?v=2zNaAUaNVVw&feature=emb_logo

Services and mobility for Glasgow loves EULivesream

https://www.youtube.com/watch?v=AZ0NwkPotlQ&t=0s

Luke Walton, BBC Look North (12 February 2020) Services with The Often Herd band, Jayne Hamilton, and North East Chamber of Commerce Jonathan Walker

https://www.youtube.com/watch?v=vjESXElsQzs

References

Jon Henley, 'Cvs at Bottom of Pile' , Guardian, (15 November 2019)

https://www.theguardian.com/politics/2019/nov/15/job-hunting-britons-in-eu-say-brexit-is-taking-its-toll

January 2021

6