The hair and beauty sector expresses deep disappointment as the Chancellor, Rachel Reeves’ Spring Statement fails to address crucial industry needs.
The long-awaited Spring Statement, delivered by the Chancellor on March 26th, has left the hair and beauty sector feeling deeply disregarded. Caroline Larissey, Chief Executive of the National Hair & Beauty Federation (NHBF), articulated the sector’s frustration, stating, “There is nothing in this statement to support the hair & beauty sector.” This sentiment reflects the sector’s collective disappointment, as the Spring Statement presented a missed opportunity to address the pressing challenges faced by businesses and professionals within the industry.
The Economic Impact: A Sector Worth £5.8 Billion
The NHBF highlighted the significant contribution of the hair and beauty sector to the UK economy. It is important to note the sector is worth £5.8 billion, playing a crucial role in supporting thriving high streets, providing valuable youth employment opportunities, as well as contributing to community wellbeing. However, the sector’s high staff costs, typically around 60% of business expenses, have been further exacerbated by the Autumn Budget measures. The NHBF’s “Straightening out the costs” report estimated an additional £139 million in overall costs for the sector, translating to approximately £25,000 in extra annual costs for a small business.
The Impact on Businesses and Employment
As a direct consequence of these increased costs, businesses are being forced to make difficult decisions. Many are increasing prices, reducing staff and apprentice hours, and even decreasing their overall workforce. The NHBF’s analysis indicates that, on average, businesses are reducing their full-time equivalent staff by 2.7 and their apprentice numbers by one per business. This trend not only impacts employment opportunities but also reduces overall tax revenue for the Exchequer, with an estimated 4% decrease (£44 million) and a potential shift of 19% of businesses (over 9,000) to a self-employed model.
A Call for Urgent Action: Lobbying for Reform
The NHBF and Estetica, along with numerous other industry bodies are all committed to continuing the vital work of lobbying the government as well as local MPs. We strongly urge all members of the hair and beauty community to join this effort, emphasizing the urgent need for VAT reform, targeted support for employers taking on apprentices, more flexible apprenticeships, and business rates relief for multi-salon businesses. These reforms are essential to ensure the continued growth and sustainability of a sector that contributes significantly to the UK economy and local communities.