What's behind the 367,000 new self-employed people?

It could be an outbreak of entrepreneurism, tax avoidance, or maybe just plain old unemployment

The strength of the UK labour market has been an on-going puzzle. Despite a 4 per cent drop in GDP, employment has risen, and more people are in work than in 2008. Yet the rise hasn’t been in full-time employee jobs. Part-time work has accounted for some of the increase, but most of it has been a result of self-employment. New figures released today (6 Feb) by the ONS show self-employment has grown by 367,000 since 2008, with the trend most pronounced amongst males and older workers.

So what’s behind this trend? There are a number of possible explanations. Ministers will no doubt claim it as a resurgence of entrepreneurialism, with new companies emerging from the ashes of the old economy. Yet this is unlikely, and few of the newly self-employed will be starting the Facebooks of tomorrow: 66,000 fewer self-employed workers are actually employing staff.

A second potential culprit is the Work Programme. Long-term unemployed jobseekers may be encouraged into self-employment by providers who are incentivised to get them off Jobseekers Allowance. However, this effect is unlikely to be significant enough to explain the overall trends: ERSA estimate that only 10% of those who have found work have entered self-employment. Assuming around 300,000 job starts, only 30,000 will be self-employed (even if all survive in self-employment).

A third explanation may be more significant: firms are shifting workers onto self-employed contracts to avoid paying National Insurance, holiday pay and benefits. Yet while such contracts are increasingly used in construction, the explanation doesn’t quite fit with the characteristics of many of the newly self-employed. Research by the TUC shows that the biggest rise in self-employment has been in professional occupations.

This leaves a fourth culprit looking increasingly guilty: the weak economy is pushing workers into self-employment. The evidence fits. Underemployment amongst the self-employed has increased from 6.4 per cent in 2008 to 10.8 per cent in 2010, and is now slightly above the rate for employees. So while some will find self-employment a good way to earn a living, for others the situation is decidedly bleaker. Professionals don’t want to be unemployed, so they become “self-employed” as a way of saving face.

The rise has been most pronounced for older workers, which is perhaps not all that surprising since this is the group with the most contacts, experience and start-up costs to move into work on their own. Some will also be deferring retirement to avoid the low value of pensions. Others will find self-employment an attractive alternative to a tough formal labour market.

So why does the rise in self-employment matter? Surely self-employment is better than unemployment?

Yet self-employment can be tough – many will be building up debt as they scrape along. And later this year, Universal Credit will be introduced. It will assume that the self-employed earn a certain amount, regardless of whether this is actually the case. Those with low incomes in self-employment will find they lose benefits. For many workers now, self-employment is tough. But it is likely to get tougher in the future.

Photograph: Getty Images

Neil is the Senior Economist at The Work Foundation

 

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If there’s no booze or naked women, what’s the point of being a footballer?

Peter Crouch came out with one of the wittiest football lines. When asked what he thought he would have been but for football, he replied: “A virgin.”

At a professional league ground near you, the following conversation will be taking place. After an excellent morning training session, in which the players all worked hard, and didn’t wind up the assistant coach they all hate, or cut the crotch out of the new trousers belonging to the reserve goalie, the captain or some senior player will go into the manager’s office.

“Hi, gaffer. Just thought I’d let you know that we’ve booked the Salvation Hall. They’ll leave the table-tennis tables in place, so we’ll probably have a few games, as it’s the players’ Christmas party, OK?”

“FECKING CHRISTMAS PARTY!? I TOLD YOU NO CHRISTMAS PARTIES THIS YEAR. NOT AFTER LAST YEAR. GERROUT . . .”

So the captain has to cancel the booking – which was actually at the Salvation Go Go Gentlemen’s Club on the high street, plus the Saucy Sporty Strippers, who specialise in naked table tennis.

One of the attractions for youths, when they dream of being a footballer or a pop star, is not just imagining themselves number one in the Prem or number one in the hit parade, but all the girls who’ll be clambering for them. Young, thrusting politicians have similar fantasies. Alas, it doesn’t always work out.

Today, we have all these foreign managers and foreign players coming here, not pinching our women (they’re too busy for that), but bringing foreign customs about diet and drink and no sex at half-time. Rotters, ruining the simple pleasures of our brave British lads which they’ve enjoyed for over a century.

The tabloids recently went all pious when poor old Wayne Rooney was seen standing around drinking till the early hours at the England team hotel after their win over Scotland. He’d apparently been invited to a wedding that happened to be going on there. What I can’t understand is: why join a wedding party for total strangers? Nothing more boring than someone else’s wedding. Why didn’t he stay in the bar and get smashed?

Even odder was the behaviour of two other England stars, Adam Lallana and Jordan Henderson. They made a 220-mile round trip from their hotel in Hertfordshire to visit a strip club, For Your Eyes Only, in Bournemouth. Bournemouth! Don’t they have naked women in Herts? I thought one of the points of having all these millions – and a vast office staff employed by your agent – is that anything you want gets fixed for you. Why couldn’t dancing girls have been shuttled into another hotel down the road? Or even to the lads’ own hotel, dressed as French maids?

In the years when I travelled with the Spurs team, it was quite common in provincial towns, after a Saturday game, for players to pick up girls at a local club and share them out.

Like top pop stars, top clubs have fixers who can sort out most problems, and pleasures, as well as smart solicitors and willing police superintendents to clear up the mess afterwards.

The England players had a night off, so they weren’t breaking any rules, even though they were going to play Spain 48 hours later. It sounds like off-the-cuff, spontaneous, home-made fun. In Wayne’s case, he probably thought he was doing good, being approachable, as England captain.

Quite why the other two went to Bournemouth was eventually revealed by one of the tabloids. It is Lallana’s home town. He obviously said to Jordan Henderson, “Hey Hendo, I know a cool club. They always look after me. Quick, jump into my Bentley . . .”

They spent only two hours at the club. Henderson drank water. Lallana had a beer. Don’t call that much of a night out.

In the days of Jimmy Greaves, Tony Adams, Roy Keane, or Gazza in his pomp, they’d have been paralytic. It was common for players to arrive for training still drunk, not having been to bed.

Peter Crouch, the former England player, 6ft 7in, now on the fringes at Stoke, came out with one of the wittiest football lines. When asked what he thought he would have been but for football, he replied: “A virgin.”

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 01 December 2016 issue of the New Statesman, Age of outrage