Coalition ministers are failing to get to grips with a "worrying" rise in the number of Britons classed as self-employed amid the economy recovery, the government's former top economist has suggested.
Vicky Pryce, now chief economic adviser at the Centre for Economics and Business Research, told the Huffington Post UK: "It absolutely does worry me because those firms will not grow."
"A lot of what has been going on in the UK recently has been that much more people have become self-employed and aren't intending to really grow, either for lifestyle reasons or basically because they've been made redundant, and they've had to find a job another way.
"Although it is better to have people doing something, we need to look at that self-employment trend very carefully and in my view we don't always do that."
Pryce, formerly head of the government economic service, explained: "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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Pryce spoke after appearing at the Enterprise Research Centre's State of Small Business Britain conference at the International Festival for Business in Liverpool.
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 warn that their rise undermines the strength of Britain's economic recovery as the official jobs figures look better, although many Britons are in less secure work and are often less well-paid.
Iain Duncan Smith recently tried to seize on the rise in self-employed Britons to declare that "the entrepreneurial spirit is alive and well" in Britain.
Others, like Emma Jones, founder of small business network Enterprise Nation, welcomed the rise in self-employed Britons as "delivering economic vibrancy to the UK".
She added: "The self-employed are starting and growing businesses from home, educating the next generation of entrepreneurs, spending more time and money in their local towns and delivering variety into the business fabric of Britain."
Pryce, who now sits on Business secretary Vince Cable's Monitoring the Economy Panel, also warned that there was a "real concern" about Britain's flagging rate of exports, but blamed it on the economic troubles hitting the Eurozone.
"There is a real concern and there has been for a while now that net trade is not contributing to the growth of the economy, and that exports are not going to be growing faster than imports, if at all.
"But if you have a market like the European one, which is very weak, it's not at all surprising that out exports, given that 57% of them go to the eurozone, haven't done as well as they'd have hoped to."
She praised the pace of Britain's economic growth, saying that "money seems to be coming back to the UK which seems to be a sign of success.'
"Business investment is picking up so all in all the recovery is set to be with us for a few more years to come and probably better than many countries."
Pryce played down any suggestion that the Bank of England could soon raise interest rates, pointing out that the UK's inflation rate remains low.
"As long as people watch that [inflation], they'll know that there is no real need to increase interest rates. We're in a low interest rate environment, we'll be there for a little bit longer."