Serious support gap warning after record self employment slump

With a ‘disproportionate and disturbing’ drop of 238,000 in the number of self employed in the second quarter of 2020, many are struggling after seeing income fall 25%, IPSE reveals

IPSE, the Association of Independent Professionals and the Self Employed, is warning that a ‘disproportionate and disturbing’ drop in the number of self employed will lead to a ‘brittle workforce’ just when, going into a recession, it needs to be at its most agile.

The comments came after the ONS survey revealed the number of self employed fell by a record 238,000 in the second quarter of 2020.

IPSE said the drop in self employment is ‘almost certainly’ because of gaps in self employed support during the coronavirus crisis compared to more comprehensive employee support.

It also reported in its most recent confidence index that self employed quarterly incomes have dropped by 25% after a record fall in the amount of work they are able to secure.

Derek Cribb, CEO of IPSE, said: ‘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.

‘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.’

IPSE found that the 25% drop in income was driven by a record fall in the average number of weeks freelancers worked in the second quarter of 2020. Between March and June, the average freelancer went 5.5 weeks out of 13 without work.

Combined with a 3% fall in freelancers’ average day rates, this led to average quarterly earnings declining by 25% from £20,821 in Q1 2020 to £15,709 in Q2 2020.

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