I was always under the impression that high level UK engineers tend to become freelance consultants so as to get paid an appropriate amount - is this not true (anymore)?

This used to be the case, but now with IR35 rules you are generally treated as an employee for tax purposes not a business, which heavily complicates the situation. This in turn brought down expected rates to the point where most would rather the employment option since the risk of being self employed no longer came with a substantial reward.

This is becoming less true due to the current and incoming taxes that are going to rise in the UK.

Many consultant friends I know and business owners have moved away from the UK to low tax areas in Portugal or UAE.