The increasing debate over the UK’s self-employment revolution got the Paxman treatment last night as Newsnight tackled the tricky subject of whether the UK’s 4.5 million-strong self-employed are there by choice, or through a lack of available alternatives.
Nicola Smith from the Trade Union Congress, a group which has repeatedly criticised the rise in self-employment (and faced its fair share of backlash from the self-employed community), debated the issue with Allister Heath, Editor of City AM.
According to the TUC’s research the growth in self-employment is driven not by aspiring entrepreneurs wanting to build and grow businesses, but by new freelancers and contractors wanting to work for themselves. Allister Heath says he believes the shift has been a two-phased one: the recession forced many people to choose self-employment, but the continuation (and acceleration) of that trend through the economic recovery shows many people are actively choosing self-employment.
“I think [the growth in self-employment] tells us that there is still a lot of weakness in the jobs market, and there’s still a lot of ground to make up. When we look at some of the detailed self-employment figures, since 2008 the number of people who say they’re self-employed working in social care has gone up by 29%.
“That says to me that there’s a lot more insecure, low-paid jobs in social care.”
“In past recessions unemployment went up much more because people didn’t have the ability to be self-employed. There’s been a cultural change here; people have become more self-reliant, and so on.
“It’s good that people want to work for themselves, it’s good that fewer people want to work for large companies, and it’s good that fewer people want 9-to-5 jobs. It’s more exciting, it’s more creative and more liberating. It creates a more dynamic society.”
The majority of data on the subject so far – a study from the Resolution Foundation and a survey we conducted – show that between two-thirds and three-quarters of self-employed individuals are happy with their current situation. The Resolution Foundation’s study found slightly more than a quarter of newly self-employed individuals would prefer a salaried position, and our study found a third would go permanent – but only for a hefty pay rise.
You can watch the Newsnight debate here.