As the editorial board and print team wind down for the summer (we don’t come out again until early October) there is an opportunity to review the latest labour market statistics and ponder what this might mean for employment law and practice over the next 12 months. It makes a welcome change from the pledge-swapping exercise to choose the next prime minister and the endless drama that is Brexit.

One of the mysteries of the UK economy over the course of the past decade has been the high employment rate/low unemployment rate with a fairly anaemic growth in wages. Wages are now only just approaching their real-term value just before the financial crisis of 2008. Conventional wisdom would suggest that high employment and low unemployment shows a problem in labour supply. Certain employers bemoan the difficulty in recruitment (talent war, skills shortages etc). In turn, one would expect low supply and high demand to increase the price – or wages – of labour. That has not happened, at least until now. Wages are now growing at 3.6% a year, around 1.7% higher than inflation.

The Office for National Statistics publishes a huge amount of data on the labour market and the latest batch has only recently come out. They show a continuation of the pattern. The employment rate was estimated at 76%. The unemployment rate was 3.8%, the lowest it has been since October 1974. This means that 32.75 million people aged between 16 and over are in what is called ‘employment’.

A little care needs to be exercised, particularly with you as the audience. Employment is defined by the Office for National Statistics as being in paid work. That is not a definition many of us would subscribe to and, as it is so broad, it encompasses people we would not regard as being in employment but in work.

Dig a little deeper and one finds that of this 32.75 million people, 4.96 million of them are in self-employment, representing more than 15% of those in work. This is the highest number recorded in the UK as being in self-employment and it does show a continuing, perhaps accelerating, change in the world of work, namely the rise of the ‘gig’ economy.

Some argue that this is a consequence of both a harsher welfare system, applying undue pressure on people to go and work, whatever that looks like, coupled with a more rampant form of capitalism that is prepared to exploit a less regulated labour market. There may be truth in that and one can certainly point to genuine examples of exploitation and undue pressure. However, it is also worth taking note of various surveys that have been undertaken over the past decade, all of which show a fairly consistent picture of the self-employed being happier in their work than those in employment. They value the freedom and flexibility that self-employment can bring.

Does any of this mean anything for employment law? While one should be careful of making predictions, by the time you read this, the UK will have a new prime minister and one who has presented himself as being in favour of reducing regulation. This is likely to be a contrast to Theresa May, who promised to increase labour protection. If one wanted to look for optimistic data and stories to justify ditching those promises, there is certainly some to be found.

Alex Lock, DAC Beachcroft LLP