I suspect part of the problem is the "flood of contractors", due to low salaries for permanent jobs. A "senior java developer" job in the North is advertised as 45k, which is ridiculously low; if I were in that position, I'd be very tempted to just quit and go contracting, where you can make 20k in a single month. But of course, if everyone does that, the contractors market gets saturated.
£20k of income(sans VAT) per month is barely possible. If you're at the level of being paid £45k - you will not earn £20k per month during first year. £20k per month is ~ £900 per day @ 22 days per month, and that is paid to very well known consultants. But what I will agree with is that the disparity of contractor pay and permanent pay in UK is staggering.
To give an example, I live in Seattle in the US (which is relevant as many states in the US apply additional taxes on top of those applied federally). My effective tax rate is probably somewhere around 35-40% of my gross income. I'm curious if devs in the UK are looking at a similar deal, or if more than half of that 20k per month is going to evaporate into taxes... also how does that vary for contract versus permanent work (in the US it would cause an immediate 7.5% bump in my tax rate, I believe).