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Bank of England reports that freelancers choose self employment willingly

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As if to directly contradict the views on self employment that the Labour party were slammed for last week, the Bank of England has revealed that they do not believe that the rise in the number of independent professionals has been purely as a result of economic necessity.

When Ed Milliband pointed to the rise in the numbers of people choosing self employment as a sign that lack of employment opportunities was making people desperate, a number of groups which represent independent professionals criticised his interpretation. Increased flexibility, having more say over their career path and the freedom to choose the projects they wish to work on are all reasons that freelancers have given for preferring to be their own bosses, and they resented the implication that it was lack of other options that forced their hands.

Their criticism of Labour’s interpretation of the figures has been vindicated this week as the Bank of England have released a report written by their structural and economic analysis unit. This confirms that the rise in self employment is most likely to be due to a change in the inherent nature of the economy rather than a sign of desperation on the part of those who are unable to find traditionally employed roles.

The Association of Independent Professionals and the Self Employed have welcomed the report, saying that it confirms their position that self employment is a legitimate career choice rather than a stop-gap for those who are unable to secure permanent work. They also believe that the recent figures point to a long-term shift in the way the workforce is structured, and that the labour market is likely to continue to adapt to the needs of modern professionals.

This makes it even more frustrating for those who work for themselves that the Labour party are still maintaining that the rise in self employment is due to insecurity in the labour market. Instead of addressing the needs of those who are starting their own businesses and working for themselves, the Labour party are trying to use the rise in self employment as a political tool to undermine the current government.

IPSE’s Simon McVicker has expressed his ongoing frustration with the position the Labour party have taken on the issue of self employment, and welcomes the news that the Bank of England’s research backs IPSE’s own as well as that of many other independent bodies. Failure to recognise the contribution made by self employed individuals, contractors and small businesses on the part of political parties could be a big mistake given the sheer number of voters who could benefit from freelancer-friendly policies.

If you are considering self employment and want to know more about what could be in store for you, then our free and comprehensive guide to contracting  could help you make your decision. You can learn about the pros and cons of going limited, the basics of contractor tax and anything else you might want to know from our free contractor guides.

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