Work and Pensions Secretary Iain Duncan Smith has welcomed suggestions from a key Bank of England committee that benefit reforms may be driving a rise in self employment.
Minutes from the Monetary Policy Committee (MPC) published yesterday revealed members found it "striking" that 200,000 more people began working for themselves in the three months to January.
And the minute said: "It was possible that some of the increase had come about in reaction to benefit caps, changes in pension entitlements and rules surrounding access to in-work benefits."
In comments made to the Daily Telegraph, Mr Duncan Smith said: "Every one of our welfare reforms has been about getting Britain working, so it's encouraging to see the Bank of England explicitly linking our reforms with the strength of the UK labour market. This country has a great history of entrepreneurship and small businesses are in many ways the backbone of the UK economy.
"The growth in self-employment is both a sign and a result of the economic recovery this Government is delivering. We should welcome this sign that the entrepreneurial spirit is alive and well in the UK."
The members of the MPC did not fully agree at the meeting, which was held on April 9.
The minute said a key question was whether the amount of slack in the labour market was understated by measured unemployment, as might be the case if many of the self-employed were underemployed and searching for work as employees. It found there was "some evidence against this".
It added: "Members of the committee held a range of views about the extent to which self-employment represented a form of labour market slack. They noted that this would be tested when more jobs became available."