Self-employed jobs have made up two-fifths of new posts since 2010 but self-employment income has fallen by £2,000 on average.

Shadow Work and Pensions Secretary Rachel Reeves MP and Shadow Business Secretary Chuka Umunna MP will today highlight how self-employed people have been hit by the cost-of-living crisis and call for improved statistics fully to take into account the contribution which self-employed people make to the economy.

New analysis by Labour has found that self-employed incomes have fallen by £2,000 on average since May 2010, highlighting The Choice between a Tory-led government under which working people have seen their incomes squeezed and Labour’s plans to tackle the cost-of-living crisis.

The self-employed have been hit even harder by the cost-of-living crisis than those in work – their gross income fell by 14 per cent between financial year 2009/10 and 2012/13 compared to a 9 per cent fall for those in regular employment.

Self-employment accounts for almost two-fifths (38 per cent) of new jobs since 2010 and self-employed people make up almost one in six of those in work, but the ONS’ monthly Labour Force Survey statistics – published for August later this week – do not include their earnings.

Tools (PD)Rachel Reeves and Chuka Umunna have written to Sir Andrew Dilnot, Chairman of the UK Statistics Authority, to ask him to examine whether new measures are needed to fully take into account the earnings of self-employed people.

In the latest intervention in Labour's summer campaign, 'The Choice', on Tuesday Rachel Reeves and Chuka Umunna will meet self-employed people at Camden Collective, a pioneering business hub project in London which offers work space and facilities.

Universal Credit will create huge new burdens for those self-employed people who receive benefit payments, requiring them to report on their income each month, rather than once a year, and using a completely different accounting system to that used by HMRC meaning that each individual will be expected to prepare two different sets of accounts each month.

Shadow Business Secretary Chuka Umunna MP said:

“To start out on your own and become your own boss takes grit, determination and energy. Self-employment is increasingly becoming a route people choose to fulfill their dreams and aspirations, while it also offers flexibility for those who want to balance work against other commitments, such as childcare.

“This entrepreneurial spirit should be encouraged, but worryingly under the Tory-led government the situation has gone into reverse as we’ve seen self-employed people hit hardest by the cost-of-living crisis.

“And the implementation of policies like Universal Credit, which create disproportionate burdens on self-employed people, are set to make the situation worse.

“We need to see the contribution and endeavour of self-employed people properly taken into account – that’s why we have written to Sir Andrew Dilnot today.”

Shadow Work and Pensions Secretary Rachel Reeves MP said:

“Self-employed people have been hit hard by the cost-of-living crisis with their income falling by £2,000 on average since 2010. It’s time for David Cameron’s government to do more to help self-employed people to prosper. And ministers must rethink their plans to hit the self-employed with unnecessary red tape under new Universal Credit rules.”

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