Self-employed set to ‘outstrip’ public sector workers by 2018, RSA says

RA Now

The number of people who work for themselves has increased by 13% since 2008, and based on current rates of growth will overtake the total number of UK public sector workers, a report is expected to conclude.

But the government needs to re-examine whether its support for small businesses – particularly tax and welfare policies – goes far enough to encourage microbusinesses to grow, the long-term research project from the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) will conclude.

The Power of Small report, to be published in May, argues that microbusiness is booming, with the number of firms with between one and nine employees increasing by 550,000 in the last six years. But over half of microbusinesses currently fold within their first three years of trading.

A poll of more than 1,000 microbusinesses released ahead of the final report has found that 43% of microbusiness owners think that the government is not doing enough to support them.

While 63% agree that the economy is getting better and the country is “heading in the right direction”, 61% don’t agree that the welfare system is fair to them.

When it comes to pro-business policies, 46% of micro-businesses think the Conservative Party has the best policies, compared to 10% for Labour, 7% for UKIP and 5% for the Lib Dems.

“Microbusinesses are the new political force to be reckoned with, but the government has yet to win their favour,” RSA senior researcher Benedict Dellot said. “Business support remains confusing and superficial, and we have an archaic welfare system that does little to recognise or reward those who want to work for themselves.”

“Parties of all sides need to get beyond the rhetoric and start delivering policies that actually help the go-getters to achieve their potential – not just for their benefit but for that of wider society,” he added.