UK becoming ‘self-employment capital’ of Western Europe

Nick Elvin

The number of self-employed workers in the UK has risen faster than in any other Western European economy, according to new analysis from the think tank IPPR.

Between the first quarters of 2013 and 2014, the number of self-employed workers rose by 8%, a figure eclipsed by only a few countries in Southern and Eastern Europe, while the proportion of the total workforce who are self-employed increased by almost a percentage point.

Spencer Thompson, IPPR senior economic analyst, said self-employment has proven to be a key driver of overall job creation.

“Around 2,000 people a month are moving off benefits into their own business,” he said. “The self-employed come in many shapes and sizes. Some are entrepreneurs, driven by high-growth ambitions, innovation and disruptive business models, but many are sole-traders simply looking to get by or small businesses happy to stay at their current level.

“Many older self-employed workers are simply working longer, due to a combination of rises in the pension age and recession-induced falls in the value of wealth stored up for retirement.”

The IPPR analysis reflects the latest ONS labour market statistics, which show the number of self-employed professionals in the UK has hit 4.59 million, nearly a fifth of the country’s workforce.

Andy Chamberlain, senior public affairs manager at PCG, the representative body for independent professionals and the self-employed, said the rise in self-employment was “hugely positive news”.

“PCG’s research shows that in 2013 independent professionals contributed £95 billion to the economy in the UK alone and this number is set to rise as more people choose to become their own boss,” he said.

“Independent professionals are driving the economy forward and doing so in a way that boosts their quality of life as well as Britain’s economy. The vast majority of independent professionals choose self-employment because they want to take control of their own destiny and achieve a work/life balance that suits them and their families.”

“It is important to recognise that the biggest growth areas in self-employment this year are among mothers and those aged under thirty. This shows that going solo is becoming open to anyone, no matter their age, gender or background. Current trends suggest that by next year there will be more self-employed professionals than people working in the public sector.”