The latest employment figures issued by the office of national Statistics have been met with delight by IPSE (the Association of Independent Professionals and the Self-Employed), but have garnered a more cautious response from the Federation of Small Businesses.
Highest Employment Rate for decades
The figures showed that in Q3 this year, 73.7% of people aged from 16 to 64 were in work. This is the highest employment rate since comparable records began in 1971, although the ONS point out
that this is ‘partly due to ongoing changes to the state pension age for women resulting in fewer women retiring between the ages of 60 and 65.’
Meanwhile, the unemployment rate has dropped to 5.3%, its lowest point since 2008. This equates to 177,000 more people in work and 103,000 fewer people unemployed compared to the last quarter.
Compared to statistics from Q3 last year, the figures also showed that self-employment has risen, with the number of self-employed people increasing by 30,000 – news that was welcomed by IPSE’s Policy director, Simon McVicker.
“The labour market has hit a record high in employment, which has again coincided with a rise in the number of self-employed,” said Mr Mc Vicker. “The figures show the resilience of the self-employed sector in what is becoming an increasingly difficult regulatory environment. Make no mistake, independent professionals are a huge contributor to the flexibility and growth of our economy, they are here to stay.”
Business Needs Sustained Support
The FSB also welcomed the labour statistics. “The jobs market remains encouraging with steady growth in employment and wages, proving again the ability of the private sector, and especially small businesses, to create jobs,” said FSB National Chairman John Allan.
However, he added a word of caution, based on recent FSB research.
“Although small businesses continue to increase headcounts, their confidence is not as strong as in previous quarters. This is likely to be related to a range of upcoming policy changes including higher than expected minimum wage increases, auto-enrolment deadlines, and changes to how dividends are taxed. The upcoming Autumn Statement will be a key opportunity for the Chancellor to reassure business and demonstrate he is aware of the challenges they face, and to maintain the positive momentum in the labour market.”
With rumours of a plan to limit PSC contracts to a month and worries over the removal of tax reliefs, the wait for the Autumn Statement is proving a tense time for freelancers and small businesses alike.