A new study has revealed that self-employed people were hit hardest by the financial meltdown under Labour. Earnings in the sector have fallen by 20 percent since 2007, compared to just 6 percent amongst employees of companies.
The self-employed also earn just 60p for every £1 earned by an average employee. The report from the Resolution Foundation, found that the number of self-employed people had increased since the 2008 financial meltdown.
The think tank blames the changing labour market, although they concede that two-thirds of people who have become self-employed during the period in question are there by choice. The growth in sector has also been fuelled by Britain’s ageing population, with one third of self-employed people being over 60.
The fall in salaries also coincides with the rise in Eastern European immigration which took off in 2004 but had reached its peak of 228,000 arrivals per year in 2006. Many of those arriving have gravitated towards the construction industry, many of whom are self-employed.
In 2008 Gordon Brown’s government presided over a catastrophic financial meltdown. The country was much more badly affected than others in the Western world because the government was running up large debts in the boom years.
Their policy entitled “sharing the proceeds of growth” meant that taxes were levied and extra debt was heaped into the public sector. Brown believed that he had “ended boom and bust economics” and so the government were unconcerned about the growth in the public sector. When the recession came it meant the government faced an almost insurmountable deficit.
Also under Tony Blair’s premiership the power to regulate the banks was taken off the Bank of England and given to the Financial Services’ Authority (FSA). In 2008, when banks begged for public funds to stay afloat, it became clear that the FSA had failed to protect consumers.
Labour’s poor management of the economy has meant that six years on from the meltdown many British people have lower living standard than they did in 2007.