NHBF calls on Government to protect beauty sector via 6-point plan
The National Hair and Beauty Federation (NHBF) has urged the new Chancellor, Jeremy Hunt, to adopt a six-point plan to protect the beauty sector.
The NHBF argues that that beauty and hair sector is experiencing a “cost of doing business” crisis, with energy and business costs escalating, inflation at 10% and consumer confidence falling.
The rising costs for businesses are paired with a sector skills crisis, said the federation, undermining the ability of businesses to recruit both entry-level apprentices and experienced staff.
Commercial rents are also rising, and businesses could pay more through business rates after revaluation in spring 2023.
Earlier this year, the association called on then Prime Minister Liz Truss to introduce measures to support the beauty and spa industry.
The six-point plan asks for:
Continued support on energy bills
The Energy Bill Relief scheme is a vital lifeline for many sector businesses. The array of services offered by the sector are underpinned by energy usage; for 64% of businesses, energy represents their first or second largest outgoing, found NHBF.
These costs have increased by over 40% for half of businesses, with some experiencing increases of 300-400% or more.
NHBF said there is a “ticking time bomb” for a third of businesses who will see their energy contract renewals coming up over the next three-to-six months and risk paying significantly higher prices.
Businesses need further support on energy bills beyond March 2023 and energy companies should be encouraged to offer a range of flexible payment plans so that businesses are supported to pay off bills over a longer period of time, said the federation.
Continued support on business rates
The NHBF has called for the 50% business rates discount continued into the 2023-24 financial year.
If government finances allow, then 100% business rates relief as envisaged with Investment Zones would be invaluable and very welcome across the UK.
Nurturing the next generation of talent
NHBF also called for financial incentives for small and medium businesses to employ 16–18-year-old apprentices: The future of the sector depends on an influx of 16-18 apprentices.
Funding could be channelled to fund apprenticeships to enable training providers to train and employers to take on apprentices, making the apprenticeship more viable and affordable for businesses through an incentive of £3,000 per apprentice.
In addition, the plan asked for financial incentives for SMEs who hire apprentices aged 19 or over. There has been a flood of older learners wanting to train in the sector. However, the National Minimum Wage (NMW) or apprentices’ wage restriction have prevented this.
Learners are unable to contribute to the business’s income until they are qualified and insured, so the increase in their costs after the first-year acts as a deterrent to employers.
First year incentives would help support taking on apprentices aged 19+ by bridging the gap between the apprentice wage and the minimum wage.
These incentives could be funded by restructuring the Apprenticeship Levy so that more small businesses could benefit from a redistribution of the fund
In the Careers at the Cutting Edge report, the NHBF estimated the cost of these initiatives, which would be a fraction of the £2 billion currently unspent.
Restraint on rises to National Minimum Wage and National Living Wage
The Government will soon be announcing its response to this year’s recommendations from the Low Pay Commission on the National Minimum Wage (NMW) and National Living Wage (NLW) rates.
Given the severely challenging economic environment and looming recession, the NHBF asked for restraint and for any rises to take account of business survival and the ability of businesses to employ.
A fairer tax system
The NHBF has called for a fairer approach to the tax system to create a more level playing field between businesses with employees and businesses using self-employed individuals.
This includes raising the VAT threshold so that more small and micro businesses benefit from relief, reducing the VAT rate to 5% or introducing tiered rates for the smallest businesses to remove the disincentive to grow and remain below the threshold.
Crackdown on tax evading businesses
The NHBF also called on the Government to target resources for a crackdown on informal businesses operating on a cash basis in the margins, failing to declare earnings, not paying tax or VAT, which means they charge lower prices, undercutting and threatening the survival of responsible businesses and undermining minimum wage legislation.
Richard Lambert, NHBF chief executive said, “Hair and beauty businesses are desperate for some economic stability so they can plan for and be confident in their future. The revolving door at the Department for Business has seen four different Personal Care ministers pass through it in the past four months.
“We still don’t know who in government will be looking after our sector-specific needs.
“The targeted investment we propose will, in the medium to long term, generate more revenue in taxes, as well as increasing business growth and employment opportunities.”