POLITICS

Tory Minister Says Self-Employment Critics Are Doing Down The Recovery

15/08/2014 12:59 BST | Updated 15/08/2014 16:59 BST
Anthony Devlin/PA Archive
West Suffolk MP Matthew Hancock, leaves 10 Downing Street, London, as Prime Minister David Cameron, kicked off a coalition reshuffle, with Scottish Secretary Michael Moore among the casualties.

A Tory business minister has hit out at Labour, trade unions and economists for worrying about the rise of self-employed Britons, accusing them of "doing down" Britain's recovery.

Speaking to the Huffington Post UK, Matthew Hancock said: "I think they are doing down exactly the sort of attitude of get-up-and-go and aspiration that is going to get our country out of the very mess that usually those who are complaining are the ones who let us get in."

Britain has seen a massive rise of self-employed Britons since the financial crash, with over half of the 722,000 jobs created over the last year were self-employed positions, with the total standing at 4.5 million.

Critics have seized on the trend to argue that the economic recovery was undermined by Britons in less secure work who are often earning less.

Describing himself as a "passionate supporter" of self-employment, Hancock went on: "It is wrong to look down on people who take the plunge and start their own business.

"Those who say that this recovery is based on poor quality employment simply aren't looking at the facts. There are more jobs available than ever before in this country, the vast majority of the jobs are full-time contracts of employment, and there has also been a very strong growth in self-employment. "

Labour's shadow business secretary Chuka Umunna accused the coalition on Monday of seeing the situation "go into reverse" for self-employed Britons, producing research which found that their income had fallen by £2,000 on average since 2010.

Former government chief economist Vicky Pryce recently told the Huffington Post UK: "You [self-employed Britons] tend to work below your skill level, you tend to find it quite hard to make ends meet and very often you just don't employ anyone additional."

"You are not usually compensated for what you lost before, with the result that there is very little productivity growth. Very often it means that firms will not grow, and very often society has lost quite a lot of potential."

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The trade unions have also expressed concern about self-employed jobs. Frances O'Grady, head of the Trades Union Congress, said last year: "Ministers brush away these concerning by saying that there are more people in work than ever before. What's not clear though is how many of these new jobs actually offer secure and regular paid work, let alone enough hours to make ends meet."

Labour's attack coincided with a report by the Institute for Public Policy and Research (IPPR) think-tank, which found that Britain was becoming the "self-employment capital" of Western Europe due to an increase in Britons working for themselves.

Hancock defended the rise of self-employed Brits after speaking at the Home Business Summit at Somerset House in central London, organised by the Enterprise Nation small business network.

He used his appearance to unveil new government reforms which will allow self-employed Britons greater freedom to start up a business from their home This includes legislation to help home-based businesspeople run a firm from a rented property and new guidance on business rates clarifying that, in most circumstances, home-based firms will be exempt.

Planning guidance is also being updated to make it clear that planning permission should not normally be required to run a business from home. Around 70% of new businesses start off in the home and they contribute £300 billion to the economy, according to the Government.

Enterprise Nation founder Emma Jones said one in 10 domestic properties are now home to at least one business.

She added: "These are not people starting businesses out of necessity through lack of jobs, they are part of a growing movement that is responding to the new opportunities technology brings and actively taking control of their own destiny by starting out from home.

"They are hard-working people who now have the capability to trade globally from their own kitchen table. They are growing through outsourcing work to other home-based individuals and as they do so, they are bringing important employment opportunities to rural as well as urban areas of Britain."