Contract wages are considerably higher, especially in London. In some cases, twice as high. If you have a little fire in your belly, and don't mind living with some uncertainty and a lot of change in your life, contracting in London can be great -- financially and otherwise.
Ex: City (finance) contract rates of £500-£700 per day are far from uncommon, if you have finance experience. Non finance, £400+ per day is not hard to find.
Just for reference, I don't think I've seen a rate of under £400 per day for Ruby/Rails developers, and I used to get £400/450 several years ago when I was still doing that, even outside of London.
Direct contract rates are even higher, somtimes > 100% higher. The pimps (contracting agencies) really screw over contactors on London. My personal experience: went from £30/hr to £100/hr by bypassing the former pimp and contracting directly to a London oil company.
Ex: City (finance) contract rates of £500-£700 per day are far from uncommon, if you have finance experience. Non finance, £400+ per day is not hard to find.