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Recession creates entrepreneurs

30.04.14

A combination of the recession and cuts in benefits has created more self-employed professionals, according to the Bank of England.

The welfare reforms, put into place by the coalition, mean that one household can claim a maximum of £500 per week, an equivalent of £26,000 per annum.

Official statistics show that the number of self-employed workers in the UK has increased by over 600,000 since 2010.

"Every one of our welfare reforms has been about getting Britain working, so it's encouraging to see the Bank of England explicitly linking our reforms with the strength of the UK labour market," Work and Pensions Secretary Iain Duncan Smith told The Daily Telegraph.

"This country has a great history of entrepreneurship and small businesses are in many ways the backbone of the UK economy. The growth in self-employment is both a sign and a result of the economic recovery this government is delivering. We should welcome this sign that the entrepreneurial spirit is alive and will in the UK".

However, Dr Nima Sanandaji from the Centre for Policy Studies wrote in the same newspaper: "The coalition's benefit reforms may well promote self-employment, which is a good thing in itself. But it is wrong to suppose that reducing benefits will do much for entrepreneurship.

"In order to do that, the coalition should turn its attention to cutting business and personal tax rates and taking the axe to red tape".

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