The UK has been dubbed the ‘self-employment capital’ of Western Europe after an increase in the number of people working for themselves, according to a new report from the Institute for Public Policy Research (IPPR).
Figures from the think tank suggest that the UK has caught up with the EU average of 14 per cent of workers who are self-employed, with the number increasing by 8 per cent over the past year, faster than in any other Western European nation.
The number of self-employed has grown by more than 1.5 million in the past 13 years to 4.5 million and now accounts for more than 15 per cent of the labour force after ‘internationally low levels of self-employment’ for many years.
The report states that around two-fifths of all new jobs since 2010 have been among the self-employed, a trend that has triggered debate over the strength of the recovery.
In fact, some members of the Bank of England’s interest rate-setting committee view the phenomenon as an indication of weakness in the labour market. According to the report, some have seen it as a negative development, having concerns whether a lot of the new self-employed are actually employees by another name.
Meanwhile, the monetary policy committee of the Bank of England, while divided on the issue, see the rise in self-employment as a sign that the labour market may be weaker than it appears.
A spokesman for the IPPR said that around 2,000 people a month are moving off benefits into their own business, which has gratified ministers, who see the trend as an indication of the UK’s ‘entrepreneurial zeal’.
However, as he added, the self-employed come in many shapes and sizes, with some being entrepreneurs driven by high-growth ambitions and disruptive business models, while others are sole traders happy to stay at their current level.
