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The Labour Party have the great problem of IR35 - they introduced it so they must defend it under all attacks. It did seem for a long while that Labour was trying to destroy the home-grown contracting industry by issuing fast-track visas to foreign workers to take the place of domestic workers (about 30,000 are currently out of work). They have recently announced that IT fast-track visas will not be issued - so maybe they have heard the cries from contractor organisations.
The Conservatives have pledged to repeal IR35. "IR35 was a sly measure which turned into a disasterous attack on the IT sector. In seeking to eliminate the bad it destroys much that is good. The Government fails to understand that contracting out is a legitimate and growing practice in IT and other sectors." They do however promise 'targeted legislation' to eliminate abuse - possibly by setting a time limit on a contract. This ignores the fact that projects sometimes drag on and get re-defined. In addition, once a company have found a good contractor, they like to keep him/her and move them onto other business-critical projects. I have met people who have contracted to the same company for years - because they were really good and the company didn't want to lose them. Why penalise these companies by forcing them to take an inferior contractor?
"There's no doubt that IR35 is a mistake that will do very serious damage to the IT industry. In an ideal world we could scrap it, but that's no longer possible." So, they have already given up and now focus their attempts on changing the 5% allowance for expenses including training. How middle-of-the-road and pathetic can you get?
No political party seems to understand that the demand for contracting has come from the big companies. They have been unable to find the right skilled and competent staff. Often it is because of lack of planning - there is rarely a chance to think about taking a contract, the demand is for 'As Soon As Possible' and you have to start within a week (i.e. you need to have already finished your previous contract). There may have been a problem in the past because accountants would advise paying a very low salary to avoid employers tax - why not address this and force small companies to pay realistic salaries to their directors rather than paying in dividends? If your salary doesn't cover your mortgage then surely you are using your low salary to avoid tax. Is the answer that politicians are worried that measures would affect them personally because so many of them are company directors?