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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
It is a pleasure to see you back in the chair, Sir Roger, and to serve under your chairmanship. I congratulate the hon. Member for Swansea East (Carolyn Harris) on securing today’s important debate, and I congratulate her and others, including the hon. Member for Bradford South (Judith Cummins) and other members of the APPG, on the work that they are doing in support of this important sector.
Today’s debate is important because the beauty and wellbeing sector is so important. It is important because of its contribution to the economy, its pivotal role in high streets and communities in every corner of the UK, its showcasing of female entrepreneurship, as we have heard, and its role in improving our health and wellbeing. We have heard a little about high streets. We have to remember that high streets are an ecosystem. It is not just about retail, hospitality or the beauty and wellbeing sector; they all work together to make our high streets vibrant. It is important that we protect all of that as we reimagine the future of the high street.
I was keen, as we looked to the end of this lockdown and at the Prime Minister’s road map, that we should secure the reopening of the beauty and wellbeing sector at an earlier stage than last time. The sector was last to open after previous lockdowns, but among the first to open this time. That is testament to the appreciation that we were able to get across to the Government and the understanding that people’s wellbeing is so important, as well as the economic situation and the recovery. Today’s debate has highlighted the key role that the sector plays in our economic society and I hope it will go some way to strengthen the perception of the sector as highly skilled, entrepreneurial and accessible.
As we have heard, the personal care sector consists of over 280,000 businesses employing about 561,000 people and adding £21 billion to the economy. Over 95% of the businesses are small or medium sized. As for levelling up, 30% of all hair and beauty enterprises are based in local authorities that fall into the ninth and tenth deciles of multiple deprivation. Although its economic contribution is significant, what is arguably even more valuable is its impact on society and its role in communities. It plays a key role in supporting jobs, as was eloquently shared by my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), especially jobs for women and young people. Some 82% of hair and beauty businesses are female owned, 60% of workers are self-employed and around 20% of hair and beauty workers are under the age of 25.
The pandemic has had a major impact on our mental health and we need to recognise how the sector can help the nation’s recovery by improving people’s physical and mental wellbeing. Whether it is feeling fresh after a new haircut, catching up with the local beauty therapist or getting a massage to relax, as the hon. Member for Swansea East said, the beauty and wellbeing sector provides the services needed to make people feel better.
The sector tells us that 68% of British adults who get their hair done professionally agree that having their hair done supports their mental health and wellbeing, and it is interesting to hear the hon. Member for Feltham and Heston (Seema Malhotra) tell us about how she had to bring out her hairdressing skills. There was no way that I was going to try that. I know that some people thought that I was taking my loyalty to our Prime Minister to the nth degree with the hair that I sometimes brandished in the Chamber, and I am glad that I have been able to get it cut since.
As we have heard, the sector also plays a key role for some people with serious medical needs, such as those with cancer. We therefore allowed treatments to continue during lockdown for those with health issues when they could not be deferred—for example, some people undergoing cancer treatment were able to visit spas and salons to receive specific treatment tailored to their comfort. Throughout the pandemic, I have worked really closely with the sector to understand the issues, so that I can best represent its interests within Government. Although it has always been represented in Government, we had a dedicated personal care sector support team back in January, and we look forward to working with organisations within the sector, the APPG and other interested parties in the coming months and years.
However, this has been a really tough year for personal care businesses, which have been closed at various points of the year and faced restrictions for the remainder. That is why, in recognition of the impact that the pandemic and the restrictions have had on the sector, we put in place an unprecedented package of support worth £382 million. That is the largest peacetime support package in history, and it included the job retention measures that we have talked about, support for the self-employed, access to the highest grants, the restart grants of up to £18,000 and loans. Indeed, the restart grants are a testament to the sector. Although it was able to restart at an early stage of this part of the road map, the restart grants are a testament to the extra costs that the sector had to bear by getting the PPE and other mitigation measures in place. As we have heard, we have also provided business rates relief and a moratorium on commercial rent evictions.
The business support programmes have helped many businesses and protected many jobs, but they cannot substitute for operating in an open market. The road map that I have talked about has always been cautious and gradual, but it has to be irreversible. To help the sector reopen, we developed guidance that could get it to reopen safely. Through compliance with that, it has been able to operate since 12 April. The road map laid out the timing for easing restrictions, and it is an approach that is being led by data, not dates. We have obviously had the announcement by the Prime Minister that we are taking a four-week pause at step 3, meaning that restrictions, including social distancing measures, are still in place. That will still have an impact on the beauty and wellbeing industry, because operating at reduced capacity is extremely challenging—not only for revenue, as we have heard, but by making certain roles in the workforce redundant—but by pausing step 3, we will further improve protection in the population and reduce the need for stringent restrictions to control the virus.
Seema Malhotra
The Minister has just mentioned the extension of the restrictions in line with the required public health measures, based on the data. Can he explain—the Government have not explained this—why furlough support has not been extended in line with public health measures? There seems to be a mismatch, and there is no explanation that does not leave the most vulnerable businesses continuing to pay and having a greater gap between their revenues and costs.
Paul Scully
I will cover support in a bit more detail in a few minutes. In his Budget, the Chancellor essentially went long by extending furlough to September, which allowed a cushion within the road map. It was about data, not dates, so it was never on the June date specifically—it was not before the June date. That is the essential thing, but I will cover support in a second, including the VAT request that has been made by number of hon. Members.
Over the next few weeks, we obviously want to ensure that the pause allows us to get more people vaccinated, but I hope that our unprecedented package of financial support will continue to go some way towards reducing the impact of the pause. As I say, we erred on the side of generosity, as well as going long, in the Budget in March, specifically to accommodate short delays to the road map. Most of the schemes do not end until September or after in order to provide continuity and certainty to businesses. It is fantastic that the sector is looking at ways to boost consumer confidence to maintain the high demand—for example, the Oh Hello Beauty campaign, which I have supported.
Until then, it is critical that we all continue to follow advice on safe behaviours, including social distancing, wearing a face covering when required, washing hands, and letting fresh air into indoor spaces. It is so important that hands, face, space and fresh air are really there, because we will not get to that July date to find that suddenly the baddie has been killed and it is the end of the film—roll credits. We will still be living with covid for some time, but we want to ensure that the social distancing measures can melt away, in order to allow capacity to increase in the personal care sector and others.
Seema Malhotra
May I probe the Minister a bit further? He will know that quarterly rents, for example, are due today and that other support measures, such as furlough, are being reduced from next week. From 1 July the level of grant will be reduced and businesses will have to pay a contribution to those wages. Those decisions were made assuming that lockdown measures would be lifted on 21 June. That has not happened, yet there has not been a corresponding change to the economic measures. Nothing that he has said so far has answered that question, which is a matter of real concern to employers across my constituency. I am sure that employers across the country have raised the same concern with their MP.
Paul Scully
I talked about the fact that the Chancellor went long and was overly generous—well, not overly generous. He erred on the side of generosity in the Budget to cope with the possibility of an extension. On the grant scheme, I have written, along with the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), to local authorities to ensure that the additional restrictions grant can be widened. We have offered £425 million more to top up the additional restrictions grant, but that will be given to councils only if they have spent their original allocation. There are two ways that they can do that: they can either give businesses to which they are already paying grants more money or widen the number of businesses to include some of those that have fallen between the cracks, of which we know there are many.
Interestingly, different sectors are saying different things about furlough. It is a drag on bringing people back into work for some sectors, such as in some parts of the hospitality sector, but others, such as the personal care sector, are saying that they want to extend it. That is why it is really important that the Chancellor looks at it in a holistic way, right across the economy. Although these debates are so important to highlight the pleas and plight of a particular sector, the Chancellor has to take a macro view, while understanding that there is a human cost within all of this. When I say a macro view, it is not all about spreadsheets; it is about personal loss in terms of people’s jobs and businesses. That is why we have had to wrap our arms around the economy so much.
A number of contributors to the debate talked about VAT. It is interesting to note that the majority of businesses within the personal care sector are not registered for VAT in the first place, so it was considered by the Chancellor as probably not the best way of getting support directly out to a number of the small businesses affected. VAT is one of the larger and more costly measures for the Treasury, so the Chancellor again has to take a holistic view. From memory, the cost of the VAT cut to the hospitality sector was something like £27 billion, contrasted with about £12 billion for the business rates sector. That was a figure from around January, so it may be slightly out of date, but not by much.
Turning to jobs and skills, it is really good that the sector is accessible and flexible, and that it benefits young people and women, including those who have to balance work with looking after their children. In 2018, 65,000 qualifications were achieved in hair and beauty, and the hair profession specifically saw approximately 10,000 new apprenticeships—the hon. Member for Strangford (Jim Shannon) raised this issue—being taken up in England, but I recognise how the deeply challenging restrictions caused by the pandemic have affected employers’ ability to hire new staff, especially apprentices, due to capacity restrictions and financial hardship.
Jim Shannon
Is it the Government’s intention to help hair and beauty salons to employ apprentices in order to have in place, as I said earlier, the next generation of those who can do the job?
Paul Scully
The hon. Gentleman, as ever, predicts the next few paragraphs of my speech. Yes, we want to encourage and work with the sector, and incentivise it to take on more apprentices. I am aware of how highly skilled and valued practitioners are, but they are tempted to start careers in different industries because they have lost confidence in the sector’s future viability. That is why it is important that we talk about it, support the sector and demonstrate how viable and flexible it is, and how it very much has a key role in the high street ecosystem that I talked about earlier.
Caroline Nokes
My hon. Friend was quick to respond that he wishes to support apprenticeships and demonstrate how important they are in the sector. Can he outline what specific work he is doing with the Department for Education to make sure that it, too, promotes them?
Paul Scully
I can indeed, and I will come to that in a second. We also have to examine why apprenticeships were in decline before the pandemic began. We can look at it holistically across Government with the Department for Education, the Department for Work and Pensions and BEIS.
We have provided a range of support for the beauty and wellbeing sector. For example, the sector is eligible for the kickstart scheme, which provides a fully funded six-month job for 16 to 24-year-olds on universal credit and at risk of long-term unemployment. I am pleased to say that 600 high quality industry-designed apprenticeship standards are now available. I want to work with the sector to increase the number of small and medium-sized beauty businesses offering apprenticeships.
The Government have recently increased the cash incentive to £3,000 for every apprentice that a business hires, and that helps to maintain and attract the sector’s future workforce. It is good to see sector initiatives aimed at upskilling the workforce. For example, I commend L’Oréal on its education platform, Access, which I am told 54,000 hair professionals have used. We will continue to work with the sector to advance the reputation of beauty and wellbeing as an invaluable, skilled and highly rewarding career path.
I have talked about some of the issues that the hon. Member for Swansea East raised in her speech. I was pleased that she was forthright in mentioning the benefit of holistic treatment to the menopause. It is important that we do not shy from talking in this place about a treatment that can be of so much benefit to so many women across the country. It is great to see that issue highlighted.
My right hon. Friend the Member for Romsey and Southampton North talked about the entrepreneurial spirit, as did the hon. Member for Strangford. My right hon. Friend is absolutely right that we should not talk about just beauty therapists and just the beauty sector. As we have heard, the hospitality sector, for example, has a low bar to entry, but that does not make it a low-skilled sector. The hair and beauty sector does not have a particularly high bar to entry, but someone cannot just pick up a pair of scissors and expect to walk into a hairdresser’s and say, “Can I start work, please?” It is really important to demonstrate the skills required in the sector.
The hon. Member for Bradford South talked about regulation, and we are working with the Department of Health and Social Care to look at regulation and what needs to be done for particular treatments. We will continue to make sure that we can work with the Department, the APPG and the sector to ensure the safety of customers. They need to see not just a certificate on the wall, as she said, but that there are skills behind it. We have to be really careful in those areas.
The hon. Member for Strangford talked about people—specifically, women—setting up businesses. We have talked about the fact that this is largely a female-led-business sector. He is absolutely right when he talks about female entrepreneurs. This fits into a wider piece of work that we are doing in my Department. What are the barriers to female entrepreneurs? They include access to finance, peer-to-peer networking and mentoring. The issue there is not just having the big beasts—the Deborah Meadens, the Richard Bransons and all those people. It is how you get mentors for people who have perhaps just opened their first salon, having been a mobile worker for a number of years; perhaps they have just taken on their first employee—it is about all those kinds of things. That is the kind of example that women want to see—someone in their mould, speaking to them about their issues. It is a question of getting consistency across the country, but also, as I have said, access to finance.
Alison Rose, the chief executive of NatWest, led the Rose review a few years ago. I chair the Rose Review Board with her—we have a meeting next week—and we talk about access to finance. We have 100 signatories to the “Investing in Women Code”, which involves a number of venture capitalists as well as lenders. We are trying to get them to change their teams so that they can get diversity of thought in their investment decisions. That will lead to having diversity in their investments and ensure that they are investing in more women, and that has to be brilliant for the UK economy.
We also have the start-up loans, available for anybody to set up a new business, of up to £25,000, alongside free mentoring. That is run by the British Business Bank and has been since 2012, and 40% of those loans are going to women. That is clearly far lower than the percentage of women in the population, but compared with some other lenders, it is going in the right direction. We still need to do more, so I am pleased to be able to encourage that. The Budget in March from my right hon. Friend the Chancellor of the Exchequer was focused on helping those most affected by the pandemic, including small businesses and vulnerable groups such as young people, women and those from disadvantaged groups in our communities. It is really important that we continue to do that.
In conclusion, we will continue to listen to the sector to understand its views and concerns. As we move to step 4 on the road map, we will work together to address the key problems facing the beauty and wellbeing workforce, discussed in the debate today. We will keep on reviewing the data; we will keep on making an assessment against the four tests at least a week in advance and will announce whether we proceed to step 4 on the new date of no later than 12 July. I want the sector to fully open as soon as that is safe, so that it can bounce back and recover from the restrictions and the financial pressures caused by the pandemic. That will help to address the issues relating to jobs and the skills gap. There is clearly more to do, after we reopen, to address the longer term challenges for the sector, but we need to keep making the point that the beauty and wellbeing sector is a fantastic industry to work in because of the people and the skills that they bring.