The number of self-employed workers in the UK fell by a record 238,000 in the second quarter of 2020, latest figures released by the ONS have revealed. This is a “disproportionate and disturbing” drop that will, according to self-employment body IPSE, lead to a “brittle workforce” at a time when the labour market must be at its most agile.
But whilst it was the COVID-19 pandemic that created so many problems for many solo workers, IPSE has blamed the gaps in the Government support for hundreds of thousands of people turning their back on self-employment in recent months, as CEO Derek Cribb explained:
“In the second quarter of 2020, there was a disproportionate and disturbing slump in the number of self-employed in the UK – far more than among employees. This is almost certainly because of the serious gaps in the Government support for the self-employed, including directors of limited companies and also the newly self-employed, who are at the most fragile stage of their careers.”
Cribb went on to say: “Going into a recession, we would normally expect a jump not a slump in the number of self-employed, as businesses look to the flexible expertise they offer. However, with Government policy driving down the number of self-employed, there is a real fear the UK workforce will become brittle and rigid just when it needs to be at its most agile.”
The data was published on the day IPSE released its quarterly Freelance Confidence Index, which explored contractors’ attitudes towards the economy, COVID-19 and their own businesses. In addition to the 238,000 drop in self-employed numbers highlighted by the ONS, freelancers and contractors reported to IPSE a record 25% decrease in quarterly income.
This concerning fall in earnings was driven by another unwanted record, this time in the average number of weeks independent professionals worked in the year’s second quarter. Between March and June, contractors on average went 5.5 weeks out of 13 without any work. Together with a reported 3% drop in day rates, average income declined by 25%, from £20,821 in Q1, to £15,709 in Q2.