Here we find evidence of the ‘bogus hairdresser’ phenomenon – that increasing numbers of people are declaring themselves to be self-employed without actually having jobs. This article is useful as it provides figures to support the claim, with graphs showing that the number of people saying they were self-employed shot up shortly after the rules changed on April 29 last year, with an increased burden on the tax credit system. There has recently been a sharp drop in the declared earnings of people who say they are self-employed, but earnings figures are published almost two years after the relevant tax year, so it will be January 2016 before we see what all this jiggery-pokery has done to self-employment earnings.
I take a break for a week or so and lots of people publish stuff about self-employment. Even the Bank of England’s Monetary Policy Committee were discussing it earlier this month, describing it as a “striking feature” of the UK’s labour market while holding a “range of views” as to the possible reasons for it. As Ben Chu noted, this is a polite way of saying that they disagree, which is not surprising given the ambiguous and sometimes contradictory data on self-employment.
Of course, this didn’t stop the government putting its own spin on the MPC’s comments. Ian Duncan-Smith claimed that welfare reforms were reviving Britain’s entrepreneurial spirit, citing the Bank of England in support, even though there was no reference to entrepreneurialism anywhere in its report.
What the MPC did say, however, was that benefit reforms might have been one of the factors leading to higher rates of self-employment…
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