It’s no exaggeration to declare that the UK’s freelance contracting community has taken a heavy pounding in the wake of the recession, in virtually all sectors of the economy. Just as many freelancers are looking for signs of renewed growth, a new report has appeared which suggests that contract jobs could be squeezed even further in 2011. If this proves accurate, further tax rises and spending cuts could well be back on the agenda very shortly.
The coalition has already revised its forecasts for economic growth over the next twelve months down from the 2.3 per cent it anticipated at the time of the Autumn Statement, to 2.1 per cent now. But according to the Institute of Directors (IoD), both forecasts are unrealistically optimistic. It believes that growth is unlikely to rise above 1.2 per cent in the coming year, almost half the level that has been predicted by the government.
If the IoD is correct in its prognosis, the Chancellor, George Osborne, will have little option but to increase taxes or cut spending even further – possibly even a mixture of both – if he is to stand any prospect of meeting his targets for budget deficit reduction.
Recognising that there has been much exaggerated “doom and gloom” surrounding the government’s Spending Review, the IoD nonetheless believes that there must be “greater realism” about the existence of weaknesses in the economy which will impede the attainment of the government’s hoped for growth rate next year. For the jobbing contractor, that could well mean punching another hole in an already tightened belt.
