The rise in the number of people working for themselves was a significant feature coming out of the crash caused by the 2008 financial crisis, taking up slack around the margins and softening what would have been a steeper and more sustained increase in unemployment.

According to figures from the Office for National Statistics (ONS), the level of self-employment in the UK rose from 3.8 million in 2008 to 4.6 million in 2015. That number remained on an upward course in the ensuing years, getting to just shy of five million people by the close of 2019.

But the latest set of employment data from the ONS shows a stark reversal that has led to warnings of “hidden unemployment” and given rise to concerns that the economy will lose the workforce flexibility required to mount a recovery from the current crisis.

Derek Cribb, chief executive of the Association of Independent Professionals and the Self-Employed (IPSE), put it as such: “If this economically essential sector is to drive recovery further down the line, the self-employed urgently need more and better support now.”

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He was responding to last week’s figures from the ONS, which showed that the number of self-employed people in the UK during the third quarter of this year fell by 240,000 compared to the same period last year. That record decline took the total down to 4.56 million, wiping out the last of the growth of the last five years in a return to 2015 levels.

Despite the raft of financial support that has been unleashed to support jobs and businesses through the first seven months of the pandemic, critics say far too many independent workers have fallen between the cracks of these safety nets.

“This is just the tip of the iceberg,” said Mark Hart, professor of small business and entrepreneurship at Aston University. “People are leaving self-employment because the Government has let them down, and we’re also likely to see more small businesses close permanently.

“ONS data from late August reveals that one in six firms are trading insolvently – that’s horrendous.

“Based on that, I estimate that around 250,000 small businesses could close in the next two to three months. That could amount to at least another one to two million people unemployed.”

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Further compounding the difficulties for independent workers was their exclusion from any additional support in the Chancellor’s latest update, the Winter Economic Plan, which was presented at the end of September in lieu of the usual Budget statement.

Mr Cribb of IPSE said the loss of 240,000 people from the ranks of the self-employed last quarter reflected the “devastating impact” from the lack of support during the first wave of the pandemic, with more to follow as infection rates rise going into the winter.

“It is deeply concerning that as we move into the second wave, the Government has not only failed to plug the gaps in support that caused this decline – it has also reduced the support for eligible self-employed people,” he said.

“In locked down areas, the self-employed can claim only 20 per cent of their earnings from Government, compared to 67% for employees – an even more glaring disparity than before.”

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This and other issues led trade unions Prospect and Community, along with the Federation of Small Businesses, to earlier this month launch their Enquiry into the Future of Self-Employment.

Due to run through the autumn with a final report later this year, the inquiry will examine a number of policy areas such as the future tax regime for freelancers, employment rights for those on PAYE contracts, and what a future safety net for the self-employed should look like.

“The coronavirus pandemic has brought tens of thousands of self-employed workers in the UK to the brink,” Prospect general secretary Mike Clancy said. “Jobs and livelihoods at risk, and whole sectors such as the creative industries, are facing an uncertain future as their workforce have been left with little or no support from the Government.

“I hope that the team of experts we have assembled can arrive at solutions to these issues and persuade the Government to sit up and take notice of the plight of the self-employed in Britain.”