Opinion Former Article

FSB: Government must nurture a culture of entrepreneurialism

FSB launches new report into self-employment as unemployment statistics look set to increase further.

The Federation of Small Businesses (FSB) is calling on the Government to establish the right to decide to be self-employed in a new report, as unemployment looks set to rise further.

With unemployment at 2.5 million and looking set to increase tomorrow (16 March), the FSB is concerned that the Government's focus has solely been on creating new employment opportunities within existing businesses, and the FSB believes that more needs to be done to nurture self-employment to really help cultivate economic growth.

In a new report, 'Self Employment: Stimulating Economic Growth', the FSB is calling on the Government to establish the right to decide to be self-employed by creating a register to define their status. Currently, many self-employed people have to prove they are self-employed and have regular check-ups. The system is overly complex and taxes self-employed people as though they are employees without giving them the legal benefits received by employees.

The FSB is calling on HMRC to respect a declaration of self-employment as just that. HMRC must check within a six-month timeframe whether the entrepreneur meets the criteria for self-employment. Once their self-employed status has been accepted the applicant must be considered as self-employed until further notice.

Self-employed people contribute £21 billion in added value to the UK economy every year, and with 18 unemployed people chasing every job vacancy, the FSB is concerned that there has been too much emphasis on employers taking on more staff.

The FSB believes that encouraging more people to go into self-employment will help guarantee long-term economic growth and is urging the Government to:

. Ensure access to the New Enterprise Allowance Scheme is more widely available so that applicants with a viable business plan can apply before six months

. Ensure that the benefit system does not disadvantage the self-employed throughout the life cycle of their business

. Develop a culture of entrepreneurship in all schools, and further and higher education institutions with a focus on starting a business at each stage

. Specifically include responsibility for self-employment and entrepreneurship within the Small Business Minister's portfolio

. Change the culture within Jobcentre Plus to better recognise self-employment and to actively encourage people to look at going it alone as a career choice

. Create a statutory definition of self-employment to help clear up the confusion around the status

John Walker, National Chairman, Federation of Small Businesses, said:

"The public sector cuts are really starting to bite and unemployment looks set to rise even higher. The Government has so far concentrated on creating employment opportunities, but they also need to help nurture an environment of entrepreneurialism. The Chancellor's Budget provides the perfect opportunity for the Government to put a spotlight on self-employment and help break down the barriers to entrepreneurship.

"By extending the New Enterprise Allowance scheme and establishing the right to decide to be self-employed, the Government will send the right message to future entrepreneurs and allow self-employment to thrive. The self-employed people of today will be the wealth generators and job creators of tomorrow."

ENDS

Notes to Editors

1. The FSB is Britain's leading business organisation with over 210,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at

2. To view a copy of the report, 'Self Employment: Stimulating Economic Growth', please go to www.fsb.org.uk

3. The New Enterprise Allowance scheme is available in England, Scotland and Wales for people who have been unemployed for six months or more.

ISDN facilities are available for broadcast media interviews
Contacts

Andrew Cave, Chief Spokesperson: 07917 628991
Prue Watson: 020 7592 8121/ 07825 125695 prue.watson@fsb.org.uk
Sara Lee: 020 7592 8113/ 07595 067068 sara.lee@fsb.org.uk

For regional FSB contacts please go to www.fsb.org.uk

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