General Election Results 2024: what it means for the beauty industry

Published 05th Jul 2024 by Erin Leybourne

Today, the results of the 2024 UK election saw a victory for the Labour Party, as Sir Kier Starmer enters 10 Downing Street.

In his first speech as Prime Minister, he said the Labour party will 'rebuild the infrastructure of opportunity, brick by brick," in a "government of service."

As the leader of the winning party, Starmer will soon start appointing his cabinet, with Rachel Reeves expected to be chosen as Chancellor of the Exchequer, with a budget announcement predicted in the autumn.

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.”

This result could see significant change for the beauty industry, with the Labour Party offering some noteworthy pledges for small and medium businesses in the UK.

Key pledges

  • Cap corporation tax at the current level of 25 per cent for the entire parliament.
  • Retain a permanent full expensing system for capital investment and the annual investment allowance for small businesses.
  • Reform of the British Business Bank, including a stronger mandate to support growth in the regions and nations, to make it easier for small and medium sized enterprises to access capital.
  • Publish a roadmap for business taxation for the next parliament which will allow businesses to plan investments with confidence.
  • Create a new publicly-owned company, Great British Energy, and ensure tougher regulation on existing energy companies.
  • Create a Growth and Skills Levy, to replace the current Apprenticeships Levy.

Industry response

The industry has responded to the change, with beauty associations calling on the new government to work with the beauty and hair sector.

National Hair and Beauty Federation

Caroline Larissey, chief executive at the National Hair and Beauty Federation, said:

“Congratulations to Keir Starmer and the Labour party, we look forward to working with the new Government to advance the interests of the beauty and hair sector.
 
“We have been heartened during the election campaign to hear Labour underlining the important role of the hair and 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 and 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.”

British Beauty Council

The British Beauty Council has compiled feedback from those working in, and buying from, the industry to identify specific areas which could most significantly benefit the beauty sector.

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 a ‘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 and 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 on 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

  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. 

Victoria Brownlie MBE, chief policy and sustainability officer of the council said: ‘We are continuing to work cross-party to advocate on behalf of the industry. We are maintaining and building new relationships with policymakers to push for action in areas where the sector will benefit most.’

British Asssociation and Confedoration of International Beauty Therapy and Cosmetology

Of the result, Lesley Blair MBE, chief executive of BABTAC and CIBTAC comments, “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 Cosmetic, Toiletry and Perfumery Association

Dr Emma Meredith, CTPA’s director-general said, “A clear election result and a significant mandate for the new UK Government provides the in-coming administration with an opportunity to plan long term for the future success of business, and specifically for the cosmetics, personal care and beauty industry.

"CTPA welcomes the new Government’s plans to have sector strategies as part of an overall industrial strategy and requests that, as part of this, the UK Government develops a dedicated strategy for the cosmetics, personal care and beauty industry.

"This would promote the essentiality of the industry’s products and services, maintain strict risk-based safety legislation, protect science-led decision-making, provide a framework for growth with sustainability at its core, enhance the competitiveness of the UK industry for both import and export, and champion the UK industry as a leader in product manufacture, design and innovation.

"CTPA stands ready and willing to work with Government, as a trusted partner, on the critical issues affecting
our vital sector.”

 

What did the other parties promise in their election manifestos?

The Conservative Party

The Conservative manifesto made many pledges in consideration of small businesses in the UK, saying that: “Small and medium-sized businesses are the lifeblood of our economy and we are making the UK the best place in the world to start or grow a business.”

Key Pledges:

  • Keep the VAT threshold under review and explore options to smooth the cliff edge at £90,000. 
  • Improve access to finance for small and medium busineses, including through expanding Open Finance and by exploring the creation of Regional Mutual Banks.
  • Lift the employee threshold allowing more companies to be considered medium-sized.
  • Retain tax incentives that encourage small businesses to grow, including the Enterprise Investment Scheme, Seed Enterprise Investment Scheme, Venture Capital Trusts, Business Asset Disposal Relief, Agricultural Property Relief and Business Relief. Neither will the Conservative Party increase Capital Gains Tax.
  • Ensure that Basel III capital requirements do not inhibit lending to small and medium businesses.
  • Fund 100,000 high-quality apprenticeships for young people.

The Liberal Democrats Party

The Liberal Democrats’ manifesto commented that the growth of businesses has been minimal, productivity is slipping, and business confidence have been damaged in recent years. The Party said that it will “maximise the opportunities for investment, growth and employment across the country.”

Key pledges

  • Boost small businesses and empower them to create new local jobs, including by abolishing business rates and replacing them with a Commercial Landowner Levy to help our high streets.
  • Tackle the productivity crisis by encouraging businesses to invest in training, take up digital technologies and become more energy efficient, including through a industrial strategy and reform of business rates.
  • Replace the broken apprenticeship levy with a broader and more flexible skills and training levy.
  • Helping people with their energy bills by implementing a one-off windfall tax on the super-profits of oil and gas producers and traders.

The Green Party

Green commented that it aims to "fight for an economy that delivers security, wellbeing and a better quality of life for everyone" as well as tackling climate and environmental issues. They proposed some specific support for small and medium businesses, to assist in decarbonisation.

Key Pledges

  • Regional mutual banks to be set up to drive investment in decarbonisation and local economic sustainability.
  • £2 billion per year in grant funding for local authorities to help businesses decarbonise.
  • Community ownership to be encouraged through greater access to government funding in the transition to a zero-carbon economy.
  • An increase in the minimum wage to £15 an hour, with the costs to small businesses offset by reducing their National Insurance payments.
  • Introduce a universal basic income to give everybody the security to start a business.

The Reform UK Party

Reform UK's 'contract' sets out the reforms that it believes Britain needs in the first 100 days following the general election and thereafter. 

Key pledges

  • Lift the minimum profit threshold to £100k.
  • Reduce the main Corporation Tax Rate from 25% to 20%, then to 15% from year 5.
  • Lift the VAT Threshold to £120,000.
  • Abolish IR35 rules to support Sole Traders.
  • Abolish Business Rates for high street-based small and medium firms.
  • Increase Technical Courses and Apprenticeships.

The Scottish National Party

The SNP has prioritised independence for Scotland in its manifesto, commenting: "Independence is a vital necessity for Scotland because decisions taken at Westminster have made life more difficult for people, families, communities and businesses across the country."

The manifesto itself does not have any SME-specific pledges, but the SNP says in its policies that it will establishing a Scottish National Investment Bank to give businesses the long-term capital they need to grow and create jobs.

Erin Leybourne

Erin Leybourne

Published 05th Jul 2024

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