A war of words has broken out between the Trades Union Congress and the PCG over what the historic rise in self-employment means for the UK economy.
Rather than signalling an entrepreneurial boom, the TUC claimed that an influx of 540,000 self-employed jobs since 2010 represented ‘insecure employment’ that would ‘depress pay.’
In response, the PCG said the union was “backward looking” for issuing such an “unhelpful” and “misguided” analysis of official figures, the latest batch of which will be issued shortly.
The freelancing group’s rebuttal chimes with comments made yesterday by the Department for Work and Pensions, when it reportedly characterised the TUC’s claims as baseless.
In particular, the TUC says in its new report that while some individuals are choosing to be self-employed, “many people are forced into it because there is no alternative work.”
A spokesman for the DwP rejected this assertion, telling The Times: “There is absolutely no evidence in these figures that people are being forced into self-employment.
“Small businesses and entrepreneurs are the heartbeat of the continuing success of the country, and as the economy grows these self-starters may well become the employers of the future.”
Chris Bryce, PCG’s chief executive, also couldn’t evidence the union’s claim, as he said that 90% of freelancers recently described themselves as being “happy” with their choice to ‘go it alone.’
Accompanying research from the trade group shows that eight out of ten freelancers are content with the control they have over their working life and the amount of hours they work.
But in its report, the TUC says it is concerned that people are “only” taking the self-employed route because they cannot find “good quality employee jobs,” roles which “they really want.”
Frances O’Grady, its general secretary added: “Newly self-employed workers are not the budding entrepreneurs ministers like to talk about.
“Only a tiny fraction run their own businesses, while the vast majority work for themselves or another employer – often with fewer rights, less pay and no job security.”
In line with her comments, the TUC’s analysis shows that the number of people starting their own businesses has fallen in recent years, in spite of rising self-employment.
The biggest growth areas of self-employment since mid-2010 have been people working for themselves (up 232,000), freelancing (up 69,000) or sub-contracting (up 67,000).
At the same time, adds TUC, the chunk of self-employed who either run a business, or are a partner or sole director in one -- “positions usually associated with entrepreneurship”-- has reduced by 52,000.
“Rising self-employment is part of a wider shift towards insecure employment, rather than as a result of a growing number of people starting up new companies as ministers like to claim,” the union reflected.
“Insecure work including self-employment, agency work and zero-hours contracts are becoming a permanent feature of the labour market, even as the economy recovers.”
The report warns: “The growth of casualised work is likely to continue to hold back wages, and prevent people from having the kind of secure employment they need to pay their bills, save money and plan for the future.”
PCG’s Mr Bryce disagrees: “The rise in self-employment is a long term phenomenon that has continued steadily over a number of years through both positive and negative economic periods. It is a structural change in the way we approach the concept of work, not a cyclical occurrence based on an unhealthy jobs market”.
He added: “Not only do self-employed people actively
stimulate economic growth, research shows their work also creates the permanent
jobs which the TUC purports to be fighting for. The boom in self-employment is
at the heart of the UK’s economic recovery and for the TUC to blame it for the
problems experienced by vulnerable workers is misguided and unhelpful.”