That this House has considered the impact of Government policy on the hair and beauty sectors.
It is a real pleasure to serve under your chairmanship, Ms McVey. This debate is about giving a voice to the thousands of small business owners crushed by the weight of tax demands. They are frustrated and exhausted —penalised, it seems, for doing everything by the book. They are expected to keep taking personal risks, to employ others and to pour all they have into building businesses and serving customers, even as the rewards for doing so shrink year after year. Those assumptions have bred a troubling complacency in Whitehall that these businesses will always just be there to tap up, and the crisis now gripping the hair and beauty sector is a stark example of the consequences.
High street hairdressing and beauty salons offer jobs and training to thousands of young people. These businesses are disproportionately led or staffed by women, many of whom need flexible hours to balance their caring responsibilities. We all know these people, because we have been served by them—even counselled by them—sometimes over many years.
However, today salons are under threat. The combination of the pressures they face is turning into a crisis, and the result will not just be a loss of revenue to the Treasury.
I thank my hon. Friend for securing this important debate. Only a few weeks ago, I visited Sue Davis’s hair salon in Blaby in my constituency, and she introduced me to two of the young people my hon. Friend has in mind, Tegan and Poppy. Does she agree that the measures the Government have brought in not only damage the hair salon industry, but risk reducing the number of apprenticeships, making it possible that there will be no future Tegans and Poppys going into the hairdressing business in the first place?
That is precisely one of the issues I wish to highlight in today’s debate. This avenue of employment is being closed down for too many young people, because hiring apprentices has become far too expensive. I am sure other hon. Members are seeing apprentices being shed across their constituencies because the sheer cost of employing them makes it too difficult for salons to retain them. That is a terrible loss for those young people and for salons that need those skills and that skills pipeline.
As I was saying, the result of salons closing will not just be a loss of revenue to the Treasury: it will be young people without an apprenticeship; high streets where the empty units left behind are filled with front businesses—perhaps a dodgy nail bar, a vape shop or a barber that may not be playing by the rules; customers who lose a service that they loved and that gave them a sense of place; and entrepreneurs who wonder why on earth they bothered to do the right thing and who now question whether this country is the right place to put their energies.
I will set out the challenges facing these businesses, explain why we should all care and, finally, share with the Minister the asks from my local salons, so that we can keep these vital businesses alive, with the benefits that flow to us all. Let me start by setting out some of the pressures on high street salons.
Salons have weathered some extraordinarily difficult years with the pandemic. Take Wyndham Hair in Hornchurch, a business that has been operating since the late 1970s. Owners Johnpaul and Jane returned from covid burdened with debt due to the stop-start nature of operating restrictions. They restructured and streamlined, and are now debt-free and at their most efficient, but the business offers little more than a wage. Why? Well, VAT is a major factor.
Johnpaul and Jane chose to employ staff rather than rely on self-employed workers. That offers better security for their employees and quality control for them, but it comes with a financial penalty: as an employer, they pay VAT on services. Meanwhile, mobile or home-based businesses, or salons staffed entirely by self-employed workers, often avoid that. Those operating outside premises also duck regulatory costs such as those for trade waste, music licensing and more. That creates an unfair playing field. It is a bizarre situation, because we can effectively have two businesses, identical to all intents and purposes, operating under two different tax systems.
I thank my hon. Friend for securing this incredibly important debate. Just up the road from her in Essex, in Basildon and Billericay, well-groomed men and women are facing the same issues. I thought this was a poignant moment to intervene, because it is precisely part-time workers, many of them women, who are affected, often in female-run businesses. Does my hon. Friend agree that the combination of all these things—the increase in national insurance, the issues around business rates relief on the high street—is really hitting? But there is also concern about some of the legislation coming forward in the so-called Employment Rights Bill, which local businesses tell me is an unemployment Bill and which, rather than protecting workers, is causing more problems, because businesses just do not want people on their payrolls.
My right hon. Friend is absolutely right: this is about a series of things hitting these businesses. It is about new legislation, new taxes and the withdrawal of reliefs that had been supporting businesses. I am glad my right hon. Friend intervened, because I was in Hornchurch yesterday speaking to staff at Wyndham Hair. Johnpaul, who runs that business, is one of my right hon. Friend’s constituents, and he told me how supportive my right hon. Friend has been of his local high street, so I appreciate the support he is giving me in the debate.
As my right hon. Friend said, this is about a whole range of people sectors. It is not just about salons being hit with these staggering tax bills; it is also about the early years sector. That sector supports many other businesses that require good workers. When I talk to nurseries in my constituency, some of the bills they talk about are just unbelievable. In fact, they are so unbelievable that when I tell people about them, they do not believe it—they think the nurseries must have got their sums wrong, but that is absolutely not true.
One after-school and holiday club provider has seen her annual NICs bill go from £10,851 to £26,040. That is a small business, and it is being absolutely hammered. One nursery provider told me that the combined impact of NICs and the minimum wage is adding £30,000 to her payroll costs every month. Those are unbelievable numbers, which risk driving many nurseries to closure. That will dismantle the support network that allows many other women to go into the workplace.
The minimum wage is right in principle, but when we force a small salon with razor-thin margins to meet that extra cost on top of everything else, it becomes untenable. When we add to that the looming Employment Rights Bill, many salons are telling staff to go self-employed just to survive. That is not giving people more protections but ripping up the ones they already have.
I know it is not the main thrust of my hon. Friend’s argument, but does she share my concern at the detailed exposés at the end of March in the Evening Standard and The Sunday Times about the huge proliferation of barber shops, which could not possibly all be conducting legitimate trade? For example, the Evening Standard talked about 17 barbers in and around a two-mile stretch of Streatham High Road, and about 25 on a similarly sized section of Kingsland Road between Stoke Newington and Haggerston. That is clearly criminal activity on a major scale.
I thank my right hon. Friend for that important intervention. As I was preparing for the debate, I read about some of the police operations in Manchester, where they have been cracking down on this kind of activity. The frequency with which they found that these were fronts for illegal businesses—often with links to international crime gangs—is deeply worrying. That is one reason why I want to raise the profile of this issue. We cannot lose legitimate businesses from our high streets, because what fills the void is something that none of us wants in our communities.
What can be done? I know how this works: the Minister sits in the Department for Business and Trade, not His Majesty’s Treasury, so he cannot give any substantive answers on the fundamental mistakes being made on tax policy. However, like any Business Minister worth his salt, he will probably share my concerns and wonder how best to get the Treasury to change course. He might even find this debate quite helpful to his own lobbying, just as the Under-Secretary of State for Education, the hon. Member for Portsmouth South (Stephen Morgan), and his officials did when I gave him evidence about the crisis now engulfing the early years.
Here are some practical asks that my salons would like the Minister to make of the Chancellor: VAT reform, with a reduced rate for labour-intensive services; the restoration of business rates relief and the overhaul of the outdated business rates system, particularly for high street premises; the revival of apprenticeship incentives; and revisiting the measures in the October Budget. Look, the Government should use global market turmoil as an excuse to mask Labour’s mistakes if that is what it takes, but let us get a U-turn on these economy-shrinking tax takes. They are not working. Confidence and employment are down. Growth projections have been halved. The tax take is going to shrink, and that will translate into a smaller pot for public services. Members do not need to take my word for it; the International Monetary Fund said so just yesterday, confirming its view that the UK’s growth prospects have been cut because of domestic factors.
Order. I remind Members to bob if they wish to speak in this debate; it seems that quite a few Members want to. We will come to the Front Benchers at 5.10 pm. Although I will not set a hard deadline, speeches should be about three minutes.
It is a pleasure to serve under your chairship, Ms McVey. I thank the hon. Member for Hornchurch and Upminster (Julia Lopez) for securing this important debate on a sector that, as she rightly says, is often overlooked but is a critical part of many of our communities, including mine in Ribble Valley in Lancashire.
As I am sure my colleagues will reference, the hair and beauty sector is a thriving economic powerhouse, contributing huge amounts to the UK economy while increasing visitors to high streets and promoting community wellbeing. Given its impact on not only the economy but our physical wellness, we must ensure that the whole sector is regulated effectively. I want to highlight my concerns and those of the Ribble Valley residents I have spoken to about the regulation of the beauty sector in particular.
It is deeply concerning that aesthetic medicine, a medical speciality recognised by the Royal Society of Medicine, is often considered just another part of the hair and beauty sector. If it were cardiology or dermatology, there would rightly be huge concern over non-medical professionals performing high-risk procedures. Aesthetic treatments are not cosmetic extras; they can be invasive medical procedures with serious risks, including blindness, tissue necrosis and death. I have recently read several tragic news stories of individuals—such as Alice Webb, a mother of five—who have died after undergoing non- surgical treatments, including the increasingly popular Brazilian butt lift, known as the BBL procedure. No charges have been brought because it is still not illegal.
However, it was promising to hear that last December, Save Face, a Government-approved register of trusted practitioners, met with the Government to share Alice’s story and discuss potential solutions to stop untrained individuals from performing such procedures. One of my constituents, Dr Natalie Haworth, has said that as a medical professional with her own aesthetic clinic, The Doctor & Company, she has to routinely manage complications previously caused by poorly trained practitioners. Legitimate, medically-trained professionals such as Dr Natalie undergo training built on years of foundational medical education, ethical standards and regulatory oversight. A three to seven-day course cannot replicate that. The increase in unreputable training providers across social media is increasingly worrying. We must look into training standards to rectify the situation.
It is a pleasure to serve under your chairmanship, Ms McVey. I thank my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) for securing this important debate, about which I have had much communication from constituents, particularly those who operate their own health and beauty businesses in my constituency. Those businesses, of which we are all aware, are a cornerstone of our high street and community. They provide valuable employment; I was particularly struck by my hon. Friend’s comments about the volume of employment that they provide, particularly to female members of society. But the crisis that we face is urgent, the stakes are high and the voices of salon owners, staff and apprentices must be heard.
I would like to highlight an example from my constituency. A constituent who operates a salon in Bromsgrove got in touch. After 33 years of contributing to the local economy, creating jobs and nurturing talent, they face the heart-wrenching possibility of having to close their doors within the next 12 to 18 months. Severe financial pressures, exacerbated by Government policies, have pushed them to the brink, and without support, staff—including a promising new apprentice—may lose their livelihoods. One of the major challenges is the disparity caused by disguised employment practices. VAT-registered salons, such as theirs, are struggling to compete with establishments exploiting loopholes through which workers are falsely registering as self-employed to dodge VAT. That creates an unfair playing field, forcing ethical businesses to consider unsustainable practices simply to stay afloat.
However, the consequences of inaction extend far beyond individual salons. Industry forecasts paint a bleak picture: a 93% drop in employment by 2030, no new apprentices by 2027 and the loss of generations of talent. Rising costs—including, in this case, a wage bill of £52,000 before factoring in rent, national insurance and pensions—make it impossible for compliant salons to thrive under the current VAT threshold of £90,000. That is why support from the Government is not optional; it is essential. This salon owner, alongside many others, has taken proactive steps to bring attention to this crisis. They are a member of the British Hair Consortium and they have contributed to comprehensive dialogue with Government urging action—action that cannot wait.
It is an honour to again serve under your chairship, Ms McVey. I thank the hon. Member for Hornchurch and Upminster (Julia Lopez) for securing this important debate.
I was recently contacted by the owner of a local, international-award-winning hair salon in my constituency. Tim Scott-Wright runs a salon in the village of Wollaston and prides himself on training the next generation of hair stylists. Sadly, Tim does not think that he will be able to take on any apprentices this year due to the increased NICs and the increase to the national minimum wage.
It is important to say that Tim and others are more than happy to contribute a bit more to get Britain’s economy growing. However, he did not realise that it would impact his business so drastically. Tim told me about salons forced into the self-employed model to reduce costs, which can have the unintended impact of forcing workers into accidental tax avoidance. It also reduces training opportunities for the next generation. Salons are already operating on slim profit margins, and the current VAT rate places an unsustainable burden on these labour-intensive businesses. Unlike other sectors that benefit from lower VAT rates or exemptions, hair salons must pass those costs on to customers, making services less affordable and reducing demand.
A proposed reduction in VAT to 10% would provide immediate relief, allowing businesses to plan for the future and keep contributing towards our economy. I have already written to the Treasury and the Department for Business and Trade to urge the Government to consider a targeted reduction in VAT for hair salons, bringing it down from 20% to 10%. Many salons are facing severe financial difficulties due to a combination of rising operational costs, reduced consumer spending and the long-term impacts of the covid-19 pandemic. The hair and beauty industry is a vital contributor to the UK economy, supporting over 250,000 jobs and generating billions in annual revenue. Let us back our hair and beauty industry, make sure revenue is not lost in self-employed models and keep the sector thriving.
It is a pleasure to serve with you in the Chair, Ms McVey. I start by congratulating my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) on securing this debate and articulating so comprehensively the issues that the hair and beauty sector face. I share her concern and frustrations, and those of the sector.
The hair and beauty industry contributes £5.8 billion to the UK economy. It is not just about how people look; it is important for our high streets, for individuals and for communities, yet the Government seem to insist on seeing the sector driven into the ground. Since the Chancellor’s spring statement, I have received messages almost daily from businesses across my constituency that are seriously concerned about their future. This is existential.
Just this week, a small salon owner who has been in business for over 27 years got in touch with me and said that this is the most challenging period that she has ever experienced. The Government’s changes to employer national insurance contributions and the national minimum wage will see labour costs for an average small salon in my Gosport constituency rise by over £25,000. That is completely unsustainable; as my hon. Friend the Member for Hornchurch and Upminster said, it forces people into the black economy or out of business altogether.
Only recently, the Secretary of State for Work and Pensions set out her Government’s welfare reforms, arguing that they are aimed at incentivising people currently in receipt of benefits back into work and secure employment. But I would love to hear from the Minister how he thinks that tallies with the closure of small businesses in our communities, and the redundancies that will result. On top of that, the Government’s actions are set to make 1,000 apprenticeships across the country unaffordable, closing the door to young talent and diminishing training and employment opportunities. I heard from one local barber who has trained apprentices for years; he has now said that the Government’s changes mean he will not be able to afford to train another apprentice.
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Hair and beauty is a labour-intensive sector, and around 60% of costs are wages. As I heard from Toby from the Salon Employers Association, salons trade in skill, not goods, and cannot reclaim VAT on their biggest cost, which is people. That pushes legitimate businesses to the brink and rewards those operating in the grey market. Self-employment is a legitimate business choice, but employment tribunal case law demonstrates that it is increasingly being used as a means of avoiding tax and employment laws. Without VAT reform, the British Hair Consortium forecasts that there will be a 93% drop in direct employment in the sector by 2030. That is not a typo; that is an emergency.
The long tail of covid and VAT were existing challenges. Rent and utilities increases also created pressure. Let us now add into that mix Labour’s disastrous October Budget, starting with the withdrawal of business rates relief. During covid, Conservatives supported high street businesses with grants and rates relief but, as of April, those have gone. Coal House Cuts in Upminster now faces a rates bill of £2,000, up from zero. The Vanilla Room in Hornchurch saw its rates bill rise from £7,500 to more than £18,000. Those are not minor figures; they are bills that keep people up at night.
Let us add in the increase in employer national insurance contributions. There is something pernicious about what the Chancellor has done here. Because of the change to thresholds, the NICs hike is hitting the types of business that employ a large number of lower-paid or part-time workers. For the Utopia beauty salon in Hornchurch that means a rise in employer NICs from £750 to £1,000 a worker. Many of its workers are single mums providing for their families, and it has already had to let go one of its tight-knit team. Because Utopia’s suppliers are facing exactly the same pressures, it is seeing cost increases of 5%, and energy and utility bills have trebled.
I am seeing an unmistakable theme in my constituency work: female business owners, with many female employees, are approaching me for the first time. I have been an MP for nearly eight years, and these are the types of people who never get in touch with their MP. To put some numbers on it, over 80% of the workforce in hair and beauty are women; 86% of businesses are female-owned; 40% of the workforce is part time, compared with 25% in the wider economy; almost one in three workers is under 30, so it is a young workforce; and 45% of the sector’s jobs are in areas with the highest levels of unemployment.
I want to say something that does not come easily to me because I loathe identity politics: it is hard to ignore the impact, let alone the irony, of a Chancellor celebrating herself for being the first woman to hold that office, while simultaneously hammering sectors that employ, serve and are often led by women.
That brings me to apprentices. Salons are letting them go very fast. For decades, this industry has opened doors for young people to learn skills and earn a living, and that ladder is being kicked away. At Coal House Cuts, the owners once proudly trained apprentices; now they cannot afford to. Wyndham Hair used to employ four apprentices; now they have one. The Vanilla Room is getting daily calls from laid-off apprentices, but it too has had to cut learner hours. Its owner, Kerry, told me:
“For the first time in 30 years, we just can’t afford to run apprenticeships. Our costs are up £28,000 on apprenticeships a year. How much does the government think salons make?”
After I put in for this debate, more stories poured in from across the country. This crisis goes beyond hair and beauty, because I am hearing the same from construction firms—another traditional route for working-class youth. Two vital pathways into work for working-class girls and boys are collapsing. Is this the future that Labour promised—a generation of young people priced out of skilled trades because Westminster could not design a Budget with small businesses in mind? That is surely the very opposite of what this Government say they want, and it is utterly incompatible with their drive to get people off welfare. Because beauty salons are facing so many different costs, they are also cutting back on training, in a sector where customers demand that they are up on the latest technologies.
So what will happen? First, there will be job losses and price hikes. One of the challenges for many salons is that their customers face the same economic headwinds, so they are spending less and visiting less often. Then there is the ultimate risk of closures. Every time a salon closes, it leaves more than just an empty unit; it leaves a void in the community—a place of connection, conversation and confidence gone. Speaking to Wyndham Hair yesterday, I heard not only about the services it offers but the support it gave its long-standing clients through covid. Those are the kinds of businesses that these people run. Utopia has clients aged 10 to 97; the 97-year-old goes to the beauty salon because it is her place of sanctuary. When legitimate businesses vanish, they are replaced by shady operations that are often fronts for illegal or exploitative practices. The rest of the high street struggles, apprenticeship routes collapse and tax receipts fall—they will not rise.
To conclude, this debate must serve as a reminder that Government do not create growth—businesses and people do. Those businesses are now often paying increased rent, utility bills, professional fees, VAT and covid debt interest and, since April, giant hikes in business rates and the cost of employing people. It is just too much. People work to incentives, and right now the incentive to start a business such as a hair and beauty salon, grow it, take on staff with full employment rights and train apprentices is simply not there.
The Government say they care about growth, communities and employee rights, but their actions—I hope by accident rather than design—are crippling the very people who grow things, give heart to communities and employ people. I say to the Minister: use this debate and take these real stories, these stark warnings and the sector’s clear-eyed solutions straight to the Treasury—before it is too late.
Across the UK, invasive procedures such as fillers, liposuction and facelifts are being performed in unregulated salons. These are overwhelmingly carried out on women, reflecting a systemic failure to take the risks seriously—often dismissed as a women’s issue or vanity. In a society where our beauty standards are shaped by social media and celebrity culture, there is no doubt that aesthetics treatments will continue to grow. In 2024 alone, the UK aesthetics industry grew by a considerable 8.4%.
Unregulated actors in this space lower the reputation of the whole industry, which in turn impacts the success of safe and legitimate services like those provided by my constituent, Natalie. We must therefore work to tackle the rise of unregulated cosmetic procedures. Will the Minister confirm whether the Government plan to follow up on the previous Government’s consultation on non-surgical cosmetic procedures? The Government must listen to women’s stories and work to act and legislate on aesthetic medicine to ensure that people’s safety is secured.
Meanwhile, the NHS shoulders the burden. A&E departments are seeing increasing complications from fillers, botox and laser treatments that should have been managed in a clinical setting. The industry must not be overlooked. We need to support trained practitioners and advocate for women seeking treatments by prioritising the raising of standards across this dynamic sector.
I am also struck by the comment made by the hon. Member for Ribble Valley (Maya Ellis) about non-surgical aesthetic treatment; I have raised that before in the House of Commons myself. My constituent, Nicky Robinson, is quite happy to go on the public record as someone who often performs corrective action for surgery that has gone wrong. That is another dimension to an industry that presents an emerging healthcare crisis that I, too, urge the Government to address. I would also like the Minister to confirm when the Government will introduce a mandatory licensing regime that will protect not just consumers but those practising in this industry.
The beauty sector is not merely about aesthetics: it is about empowering individuals, building confidence and fostering community connections that we all know exist across our constituencies. It is time for the Government to recognise the importance of the industry and take the necessary steps to ensure its survival.
Businesses will suffer. Female-led businesses in particular will suffer, as well as female work opportunities. Communities will suffer, and in the end the Government will see declining tax receipts. Will the Minister admit that his party made a mistake, and set out how he will communicate with the Treasury to attempt a U-turn? I do not think that anyone on the Opposition Benches would blame him if his party took that sensible step. On Monday I will be hosting a roundtable for all the hair and beauty salons across my constituency, and I would love to know what the Minister’s message is to them.