What Does the UK General Election Mean for Barbers?

The UK general election result has been called and Keir Starmer will be the new Labour Prime Minister. This result will have significant implications for the hair and barbering industry with several points in the Labour Party’s manifesto being relevant to the hair and beauty sector.

Starmer will soon start appointing his cabinet, with Rachel Reeves expected to be chosen as Chancellor of the Exchequer. Although a budget isn’t expected until autumn, Reeves will be driving forward Labour’s manifesto and their commitment to creating the conditions for productivity rises and growth.

Labour’s plans for economic growth include specific support for small businesses, commenting that “small firms, entrepreneurs, and the self-employed face unique challenges.” And calling them: “The lifeblood of communities and high streets across the country.” 

The Labour Party’s Key Pledges

The National Hair and Beauty Federation (NHBF) has outlined what Labour’s manifesto could mean for the hair and beauty sector:

• Economic Stability and Taxation: Labour’s promise of economic stability with a new partnership with businesses could provide a more predictable environment for salon owners. The cap on corporation tax at 25% and replacement of business rates might relieve some financial pressure on high street beauty businesses.
• Apprenticeships and Training: By transforming Further Education colleges into specialist Technical Excellence Colleges and reforming the apprenticeships levy through a growth and skills levy.
• Support for SMEs: Actions on late payments and reforms to the British Business Bank are designed to improve the financial health of small businesses, which is critical for many independent salons and freelance beauty professionals.

Responding to the General Election result, Caroline Larissey, Chief Executive at the National Hair & Beauty Federation (NHBF) said: “Congratulations to Keir Starmer and the Labour party, we look forward to working with the new Government to advance the interests of the hair and beauty sector. We have been heartened during the election campaign to hear Labour underlining the important role of the hair & beauty for healthy high streets, economy and communities. We were also pleased also to hear their considerations around VAT reform and we look forward to feeding in on the proposed roadmap for business taxation. As the new Government develops its proposed industrial strategy, it’s important that this improves the business environment in which our sector businesses work, improves the many towns, cities, high streets and communities where they are based and has talent development at its heart. People are central to the future of the hair & beauty sector and we look forward to working with the government to make sure that the proposed Growth and Skills levy improves, and not reduces in any way, support for apprenticeships for small and micro businesses, helping them bring on the talent of the future.” 

Lesley Blair MBE, CEO of the British Association of Beauty Therapy and Cosmetology has also assessed the new government’s manifesto to see what it could mean for the sector, “While a change of guard can bring uncertainty, it also presents the perfect opportunity to align and offer our extensive expertise and experience. We will ensure we offer our support to the incoming Labour Government to assist them in delivering on their manifesto promises - especially those identified as being beneficial to our industry and our members - as well as advising them of additional important matters affecting our sector directly.”

She continues, “We would like to congratulate Keir Starmer and his party and wish them all the very best. We strongly encourage them to collaborate with reputable and professional industry bodies, such as BABTAC, to help optimise their objectives in each sector.” 

The UK Government’s Key Policy Priorities

The British Beauty Council also compiled feedback from the industry during the run-up to the election in order to set out its key policy priorities. Key areas that were identified as needing attention included tax reform, green incentives and the simplification of trade.

The British Beauty Council’s key priorities: 

Tax and Spend

1. Tax reform including a reassessment of VAT policy, specifically focussing on tapering the current VAT threshold cliff-edge.
2. A wholesale review of the business rates system to create a more level playing field between high-street stores and e-commerce platforms.
3. An increase in the Employment Allowance for SMEs to reward businesses that grow their workforce.
4. The introduction of an internationally competitive, tax-free shopping scheme for international visitors.
5. Tax-deductible business training in new areas of business such as AI and sustainability.
6. A commitment to review the classification of SPF30+ to an ‘essential’ rather than an ‘cosmetic’ item.

Trade and Regulation

1. Targeted investment incentives that prioritise business reshoring and increase UK manufacturing and innovation, particularly in relation to sustainability.
2. A closer and more positive working relationship with the EU in respect of trade and export policy.
3. A commitment to maintain a sector specific, risk-based, approach to any regulatory reform relating to UK Cosmetics Regulation in order to ensure long-term stability.
4. A commitment to proceed with licensing regulation as secondary regulation under the Health & Care Act 2022 in the aesthetics sector. 
5. A closer and more positive working relationship with the EU in respect of trade and export policy, addressing the barriers that have resulted in £852m drop in sales to Europe since the Brexit vote.

Education and Growth

1. An updated skills and apprenticeship education system that works for a modern Britain, managed under the remit of the Department for Business and Trade to ensure the qualifications are fit-for-purpose for UK business.
2. Greater flexibility regarding the use of Apprenticeship Levy funds to build on and develop skills in the areas both large and small businesses need.
3. The reintroduction of Child Benefit for families of under 18’s who undertake apprenticeship.
4. A focus in resources to ensure improved access to funding for typically disadvantaged groups such as women and ethnic minorities and greater representation at all levels of business and enterprise.

ESG (Environmental, Social and Governance)

1. Support and incentives for companies to implement carbon reducing, circular, nature positive and environmentally sustainable business practices.
2. An implementation strategy in relation to Extended Producer Responsibility regulation that works with industry to ensure a common-sense approach to execution e.g. utilising digital labelling etc.

Read next: Salon and Barbershop Owners Call On The Government For An Immediate Cut In VAT