"Permanent employees are basically impossible to fire."

That really isn't true at all - you can be fired for pretty much anything in the first two years and after that the process is pretty straightforward.

I've never seen a company fail to get rid of someone they didn't want working there - one way or another.

Contractors are especially needed in unionized permanent companies - where contractors/3rd party companies are needed just to get things moving in the direction management wants.

Total bollocks in the UK you can let a fulltime employee go at any time in the first 2 years and its fairly easy to fire after that you just have to follow a simple procedure.

I would disagree that the UK is exactly the same as Scandinavia (having worked in both). Maybe for general companies around the country but definitely not for startups. I have seen many get fired for no particular good reason. They might be arranged via some theater of made up performance reviews then fired, but job security in the startup scene in London at least is a lie. But also those startups get a reputation and suffers for it.

Which is why I am now a contractor in London. No theater. They can let me go on short notice ethically and legally, and I am fine with that. Mostly as I am financially fine with it.