Quarter of self-employed want secure jobs, survey finds

More than a quarter of those who became self-employed in the last five years – about 450,000 people – would rather have salaried jobs, according to research published on Wednesday.

The findings will fuel debate about whether the UK’s surge in self-employment indicates a rise in entrepreneurialism or simply people who cannot find a job trying to make a living in other ways.

The survey for the Resolution Foundation think-tank by Ipsos Mori found that 72 per cent of those who had become self-employed in the past five years preferred their current situation to being an employee. That may encourage the government, which this week hailed the growth of self-employment despite criticism from the Trades Union Congress.

“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,” the Department for Work and Pensions said.

But 28 per cent of those who became self-employed in the past five years said they would prefer to work for someone else, compared with 11 per cent of those self-employed for five years or more.

Conor D’Arcy, a Resolution Foundation researcher, said that while a majority still preferred to be their own boss, a “considerable minority” would rather have the security of being an employee.

A record 4.46m are self-employed, accounting for nearly half of the 1.2m jobs created since the coalition came to power. The self-employed make up almost 15 per cent of all those in work, double the level of 35 years ago. The last time there was so large a rise was under Margaret Thatcher in the 1980s.

The Resolution Foundation said nearly 1.7m had become self-employed since 2009. More than one in four cited a lack of work alternatives as the main factor behind their decision.

One in four also said they had been prevented from obtaining credit or loans because they were self-employed, while 12 per cent said their status had prevented them from securing a tenancy.

Ahead of labour market data on Wednesday that economists expect will show a drop in unemployment, Labour published data showing the UK has the fourth highest level of underemployment in the EU.

It cited EU figures showing that 1.9m people in the UK, or 6.5 per cent of all in work, were underemployed, defined as those in part-time jobs who would like longer hours. Only Spain, Ireland and Cyprus had a higher proportion.

Labour said the number of people working part-time because they cannot find full-time work had increased by 356,000 since the coalition took office. It cited figures from the House of Commons library suggesting this cost £1.8bn a year in benefits, including tax credits and housing benefit.

Ministers announced £170m for youth employment programmes mainly in inner London, Merseyside, southwest Scotland, the Tees Valley and the West Midlands. But the Prince’s Trust, a charity, said youth unemployment would not fall to pre-recession levels until at least 2018, a decade after the financial crisis kicked in.