Because they’re worth it: why government’s attitude to the beauty industry is due a makeover
Misunderstood, sneered at by sexists, and now brought to crisis point by the pandemic, the £28bn hair and beauty industry has its fair share of problems. Kate Proctor reports on how the sector is lobbying for an immediate cash injection from government and why there is a long way to go for this female-dominated industry to be taken seriously
It’s the laughing that really hurts. The sniggering from male politicians whenever hair and nail salons are mentioned in the House of Commons hasn’t gone unnoticed by those working in the country’s £28bn beauty industry.
With more than half of businesses facing financial worries from the many months the pandemic has shuttered their shops, and fury over VAT rates, it’s a desperate time for thousands of people. And for the predominantly female workforce of the beauty sector, it’s no laughing matter.
In July last year, a well-meaning question by William Wragg MP to the Prime Minister about the delay in reopening beauty services descended into a flippant exchange about the state of both men’s hair and whether they would attend a beauty salon. It led to several business owners providing the media with furious quotes about a lack of respect.
The Prime Minister’s announcement this February on salons reopening generated more Commons laughter – innocent mockery prompted by the state of Boris Johnson’s hair at the time, it still furthered the perception among beauty workers that politicians simply don’t take their industry seriously enough.
Labour MP Judith Cummins, who co-chairs the Beauty, Aesthetics and Wellbeing All-Party Parliamentary Group (BAW APPG), said: “We’ve seen the lads’ terminology of nail bars and the industry being pink and fluffy. That points to a more deep-seated lack of respect verging on sexism.
“This sector must be treated on an equal footing to other industries that contribute the same to the economy.”
Hairdresser Nicola Clarke, who has styled actress Cate Blanchett and runs a salon in Fitzrovia in London, said: “I remember one politician spoke out about how many billions the industry brought into the market and [another] one scoffed and laughed.
“I work in a salon, and the film industry and in fashion, and it’s really serious. Today I’m on a L’Oréal commercial. To be scoffed at in the Commons was degrading and quite shocking. When you’re so high up in your industry you forget how ordinary men think it’s quite frivolous. You forget … how certain Members of Parliament look down.”
Carolyn Harris, who co-chairs the BAW APPG, said she and her colleagues had been trying to get the sector on a level playing field with hospitality throughout the pandemic. It’s left them angered that they have had to battle so hard to build understanding across Whitehall about how hairdressing and beauty contribute to the economy, and how they are a lynchpin to a thriving high street.
It was only in January 2021 that the Department for Business, Energy and Industrial Strategy (BEIS) set up a Personal Care Services team, with dedicated civil servants, for the first time. Before that, hair and beauty had hovered vaguely between hospitality and retail from a policy perspective, which is partly why those in the sector think it missed out on additional help, like the VAT reduction.
There’s still concern that not much will change unless this part of the economy gets the same recognition within the Treasury.
“They can be talking to BEIS until they’re blue in the face, but if BEIS are not talking to Treasury they’re not going to get anything,” Harris said.
The £28bn industry is made up of two parts: spend on products (which accounts for the vast majority), and beauty services, which comes in at around £8bn to £9bn. That’s a workforce of more than 500,000 people, which generated £7bn in UK taxes in 2018 and forms 1.3 per cent of GDP.
The National Hair & Beauty Federation’s (NHBF) report released last month makes for stark reading on how the industry has suffered through the pandemic. In 2020 salons were shut for 140 days, turnover fell by 45 per cent compared to 2019 and the average cash loss to a business was £17,000, with those over the VAT threshold taking a bigger hit.
Six out of 10 salons started the year with no cash reserves whatsoever, and many businesses are now described as acutely vulnerable to failure.
Furlough stopped businesses immediately going bust, but salon owners are still having to pay rent, insurance, then national insurance and pension contributions for staff, and buy in products for the reopening from 12 April. There are also loans to pay back. Cash flow problems are at their most severe.
The NHBF has also carried out research that shows there are more hair and beauty businesses in the poorest parts of the UK. The body is arguing for immediate personal care grants, pointing to the damage those businesses’ closure could do to already fragile economies.
Richard Lambert, NHBF chief executive, said: “The government should be aware that if the hair and beauty sector starts to fail, many of those businesses will be in areas of greater deprivation.”
He stresses they are predominantly staffed by young women, many of whom are part-time and mothers, who will be out of work.
The sector has channelled its fury into two big demands for government: cut VAT to 5 per cent, and provide cash grants immediately.
Katie Mulcahy, who owns Paint & Powder in Stafford, opened her business in December 2019. She only had a few months of trading before the pandemic hit, and says she needs about £4,000 immediately to make her salon reopening a success.
“At Christmas we were busy, quite profitable. But any profit we saw or money we had in the bank we’ve had to use to keep going,” she said.
Plans to take on an apprentice are also on hold because of money worries, and she knows that is a loss of an employment position for a local school-leaver.
Gemma Hensman, who works for her family’s hairdressing business with salons in Northampton and Milton Keynes, said lockdown is costing them up to £8,000 a month. She’s used furlough, and had a £9,000 grant through the local authority, but there is huge frustration that they haven’t had the VAT drop, and there are still pension and national insurance contributions for their 33 staff to pay.
The Save Our Salons campaign group has been campaigning on the VAT issue for months, trying to lobby MPs. It wants to elevate the industry within political circles well beyond what may be a disappointing budget.
It’s steered by five of the UK’s top stylists and beauty industry business leaders: Hellen Ward of Richard Ward Hair & Metrospa, Stephen Nurse of Daniel Galvin, Luke Hersheson of Hershesons, Kim Clayton of Errol Douglas, and Toby Dicker of The Chapel Hairdressing.
Dicker said it became apparent at the start of the pandemic the industry is effectively “invisible” to government. In part, he said, this is because of a split across the industry between those in the sector paying VAT, on turnover of £85k and above, and those who don’t – largely the self-employed who want to stay below the threshold.
The immediate concern was securing the 5 per cent cut for salons to level the playing field, but it became apparent very quickly that “the big brewing companies have a stronger lobbying voice” than the beauty industry in parliament overall, and this is something they need to work on.
He said: “We are not complaining about the support [we’ve had], but the unfairness of the distribution of the support, especially around hospitality. It’s the exact same model as us.”
Ward, who is vice-president of the British Association of Women Entrepreneurs, is losing £1,000 a day in lockdown at her salon. Her husband, Richard, had a hand in styling Kate Middleton’s hair at her 2011 wedding to Prince William, and the salon attracts scores of celebrities.
She said ultimately the industry should lobby to get rid of the VAT threshold altogether and have a decreased rate, perhaps mirroring Ireland which is 9 per cent on services and 21 per cent on goods.
Ward doesn’t dwell too much on whether the industry has been ignored because it’s female-led, but she said there is an element of being under the radar and not being taken seriously. She’s certainly dealt with a lot of men “taking the piss” out of her career over the years.
She said the government urgently needs to wake up to the fact “we bring that vital footfall into the high street” and salons will close without help.
“We have 1,200 clients a week in just one location in central London,” she said.
And having found their voice, the Save Our Salons group isn’t going away, adding: “If we do get the backup in the short term that still won’t tick the box for us. We want to look at the long term.”
A government spokesperson said: “We know this is a difficult time for all businesses, including the hair and beauty industry. The personal care sector makes a significant contribution to the UK economy and plays a vital role on our high streets.
“The government has put in place one of the world’s most comprehensive economic responses to protect jobs and businesses throughout this pandemic, and continues to engage regularly with the personal care industry to understand the needs of this important sector.”
Businesses are currently able to defer VAT payments, previously due in March, and take business rates holidays. There is also a moratorium on eviction for commercial tenants. The Budget did not include any plans to expand the scope of the reduced rate to hair and beauty, while hospitality were given an extension to the 5 percent rate, which will then shift to 12.5 per cent.
The government said in a response to a petition about VAT cuts that there were no plans to expand the scope of the reduced rate.
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