UK becoming the ‘self-employment capital’ of Western Europe

Job growth in UK fuelled by fastest growth of self-employment in Europe

  • Growth in self-employment in the UK has been the fastest of all Western European countries over the last year, with the proportion of workers who are self-employed rising by almost a whole percentage point.
  • The UK had internationally low levels of self-employment for many years but has caught up with the EU average
  • Self-employment has proven to be a key driver of overall job creation, with the working-age employment rate reaching historically high levels.

Demography – businesses

Business Demography, 2012: ONS

  • The number of business births increased by 8,000 (3.1 %) between 2011 and 2012.
  • The number of business deaths increased by 25,000 (11.0%) between 2011 and 2012.
  • In 2012 the births of new businesses (270,000) was greater than business deaths (255,000).
  • The move towards economic recovery has seen birth rates being higher than death rates from 2011, but the gap has narrowed in 2012.
  • London had the highest business birth rate at 14.8% and the highest death rate at 11.7%. Apart from London the number of birth and deaths by region were similar.
  • In broad industry terms, accommodation and food services had the highest death rate, at 13.3%.

Small business and the local economy

Local Procurement research report: FSB

  • 58 per cent more of the money spent by local authorities with small firms is re-spent in the local economy compared to that spent with large businesses in the same area.
  • Small local firms generated £746 million more for the local economy compared to large local businesses
  • For every £1 spent with a small or medium-sized business (SME) 63p was re-spent in the local area compared to 40p in every £1 spent with a larger business.
  • Local authorities across the UK in the last year spent a total of £8.7 billion buying goods and services in their local area
  • If each authority had spent an additional five per cent of their budget locally and committed just three per cent more of that to small local firms, an additional £788 million could have been generated for local economies.

Homeworking on the increase

Analysis of unpublished data: TUC 

  • The number of people working from home has increased by 13 per cent in the last five years
  • Just over four million employees usually worked at home in 2012, a rise of 470,000 since 2007.
  • 65% of people who work from home are male
  • The majority of homeworking jobs created in the last five years have gone to women.
  • The rise in female homeworking is partly due to the fact that almost nine in ten (86.8 per cent) of these new jobs are part-time.

SME orders and output fall

SME Trends: CBI

  • Small and medium-sized manufacturers saw orders and output continue to fall in the three months to April, though firms are expecting both to grow in the next quarter.
  • Output also fell for the fourth consecutive quarter. However, manufacturers expect output to grow slightly over the next three months.
  • Optimism about the overall business situation has steadied, following three quarters of decline. Meanwhile, optimism about export prospects rose for the first time in a year.
  • Manufacturers expect a modest increase in headcount in the coming quarter.
  • Growth in average unit costs was the fastest since October 2011, squeezing manufacturers’ profit margins once again.
  • No sign of an improvement in credit conditions

Business Bank

Business Bank launched: BIS

  • £300 million will be invested alongside private investors to address long-standing gaps in the SME finance market. This money is the first deployment from the £1 billion of new capital allocated to the business bank in the 2012 Autumn Statement. It will build on the success of the Business Finance Partnership to leverage at least the same amount in private sector investment.
  • The focus is on promoting greater diversity of debt finance available toSMEs by encouraging the growth of smaller lenders and new entrants in the market. Investments will be made via new and existing lending channels on a commercial basis.
  • New research by the National Institute of Economic and Social Research (NIESR) highlights that SMEs have been disproportionately affected in their ability to access finance as a result of the contraction in bank lending since 2008.



The CBI follows a well trodden path in suggesting that the the key to success is awareness. I’ve heard that too often. If these were such great finance offers, businesses would know about them, wouldn’t they? Word of mouth and all that. Businesses I’ve spoken to seem to be disappointed that so many of these schemes have done little except  reproduce what is already available – what is so special about offers from this new launch?