Clanger - I've faced the same problems as yourself in engineering over several years. There are several umbrella companies who do absolutely nothing but charge you for keeping you on the right side of the IR35 whilst you contract for ONE employer. It's bordering very very closely on legality but there you go.
Most engineering agencies I've gone through have always pointed me in there direction. Shocking? Yes. Legal? Probably not.
Harry - I think most realise the implications however they, and I, would rather be treated like
and paid instead of being treated like
and paid bugger all.