Government needs to provide more support for the self-employed

(2 minutes to read)

The Association of Independent Professionals and the Self-Employed has warned that the government needs to look at how better to support the self-employed to improve productivity.

Latest ONS figures have revealed that self-employment numbers remain stable, however, the IPSE believes that it’s worth considering how the poor economic growth and productivity affects the self-employed.

The report shows that the labour market has stayed strong, with self-employment remaining at approximately 4.8 million or 15% of the workforce and unemployment falling from 4.6% to 4.2% – the joint-lowest on record.

This is, however, set against ongoing poor economic performance and a 0.5% drop in productivity in Q1 2018.

Tom Purvis, IPSE’s Economic Policy Advisor, commented, “These figures show the labour market is still in a fairly strong position. Employment has continued to rise, unemployment is still falling, and self-employment remains broadly stable.

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“What we need to talk about, however, is the wider economy. Because although the labour market is performing well, there is still poor economic growth and productivity. In fact, productivity fell by 0.5 per cent in Q1 2018, and it is worth considering how self-employment affects this. As a report by the Centre for Research on Self-Employment has shown, the self-employed give a major boost to productivity in the construction industry, and it is likely they drive productivity in other sectors too.

“So, while the labour market seems to be in a strong position at the minute, the Government must focus its efforts on turning this into better economic performance. In short, it must protect the self-employed and give them the support they need. Policies like lowering the VAT threshold or rolling out IR35 to the private sector would jeopardise the self-employed, threaten the vital productivity boost they bring, and cause severe problems for a UK economy that only grew 0.1 per cent in Q1 2018.”

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