U.K. Self-Employment Surge Driven by Desperation, CIPD Says (1|

An increasing number of Britons are being forced to work for themselves in a “desperate” attempt to avoid unemployment, the Chartered Institute of Personnel and Development said in a report.

Self-employment rose by 101,000 to 4.12 million in the three months through November and accounts for 14.1 percent of total employment, figures released by the Office for National Statistics today show. It has grown about 8 percent since the start of the recession in 2008, while the number of employees has fallen 3 percent.

The rise in self-employed “is having quite an important dampening effect on unemployment numbers,” John Philpott, chief economic adviser at the CIPD, said in an interview. “The job situation is so tight, people are taking what they can get.”

Two years after Britain emerged from its worst recession since World War II, gross domestic product is still almost 4 percent below its peak in early 2008. Concerns are mounting that the economy may now be contracting again as the euro-region debt crisis and government austerity measures sap confidence.

The unemployment rate based on International Labour Organization methods rose to 8.4 percent in the three months through November, the highest since January 1996, from 8.1 percent in the period through August, the ONS said London. The jobless total climbed by 118,000 to 2.69 million, the most since 1994.

Private Jobs

While self-employment surged, the number of people in employee jobs fell by 109,000, the figures show. Overall employment climbed by 18,000 to 29.1 million, suggesting the private sector created jobs at a faster pace than the government eliminated them.

The type of people who have become self-employed since 2008 “are unlike self-employed people as a whole in terms of gender, hours of work, occupation and sector of employment,” London-based CIPD said in its report. Women account for more than half of the increase, while almost 90 percent of the newly self-employed work fewer than 30 hours a week. Agriculture saw the biggest increase.

“It’s far from clear that the recent rise in self-employment marks a resurgence in British enterprise culture, with many of those taking the self-employed route back to work looking more like an army of part-time ‘odd jobbers’ desperate to avoid unemployment,” the report said.

(Updates self-employment figures in second paragraph, unemployment in fifth.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE