Firstly - "Temps absolutely do NOT represent a 'cheap option' for the firms they actually do the work at, I remember learning at one factory (where I was being paid £5.50, and the perms £7) that the agency was being paid £9.90 for me." Well, maybe so, but for the permanent staff at least you have to add all the extra cost - employer taxes, National insurance payments, workplace insurance, holiday and sick day allowances, etc. It's not what you or the agency have been paid, it's what the employer is paying out in total.
I agree with AC "at last" - big companies get an awful lot of benefits from not having to worry about the long term provision for their temp employees. I've met temps who've been in the same job for ten years, and won't get a pension, don't get paid sick days, etc. These people are going to benefit, and possibly it will benefit temps overall.
There is absolutely no point in getting rid of agencies. Yes, they're expensive, but they aren't as expensive as hiring a full time member of staff just to find people to work for you over a brief period of time.
Finally, with all the talk about how there aren't enough people in this country willing to do tier one jobs (accountancy and IT related jobs are all tier three I believe - there to make something unnecessary to survival easier for other people) what makes you think they aren't trying to get rid of the higher earners? Politically, getting rid of examples of high income earners would make the lower income earners less aware of what they're missing.
When I lived with Students and was on £9k a year, I easily supported myself and my boyfriend. Now we have a joined income considerably higher than that, but we've moved to an area where people are wealthier and we perceive ourselves as being worse off. Which is mathematically (and I've sat down with a calculator to double check this) ridiculous.